In 2017, Governor Andrew M. Cuomo presented a proposal to combat rising prescription drug prices. In sum, the Governor wants to 1) impose a price ceiling for certain high-cost prescription drugs reimbursed through Medicaid; 2) place a surcharge on high-priced drugs priced above certain benchmarks; and 3) require pharmacy benefit managers to register with the State, and be subject to new regulations.In addition, New York developed an all-payer claims database (APCD), and has recently released draft regulations that are open for public comment. The state passed legislation in 2011 that enables the creation of an all-payer database. The all-player database will integrate claims data from the APCD with clinical and quality data and public health repositories. Other current New York legislation is mostly aimed at pharmaceutical price transparency, patient fee advisement, and provider-insurance carrier contract provisions.
In other price transparency 2017 measures, New York legislation sought to require pharmaceutical companies to disclose historical information about a drug’s development if a drug exceeds a certain wholesale acquisition cost threshold. Another bill would require health care providers to advise patients of fees the patient will be charged for upcoming services. New York also proposed an interesting bill that aimed to educate New Yorkers on long-term care options, insurance, and insurance providers. In regard to cost containment, New York sought to prohibit health insurance plans and clauses that impose drug tiers based on expense or disease or that require a provider to acquiesce to a health insurance carrier reimbursing the provider at the lowest rate the provider has charged another person or entity for the same service.
The State Database
The Source tracks state activities impacting healthcare price and competition in both legislation and litigation in a searchable database to help stakeholders at the state level understand their legal and regulatory environment as they make efforts to improve access, quality, and efficiency, and reduce costs in healthcare. We currently cover bills from the 2017-2018 legislative term and key statutes from each state. Search the database for specific bills, statutes or cases by using keyword, key issue category, and/or jurisdiction.
LEGISLATIVE CALENDARNew York’s current legislative session runs from 1/3/2018 – 12/31/2018. Bills from the 2017 were carried over to 2018 for the 2017-2018 legislative term.
FY 2018 BUDGETNew York’s fiscal year begins April 1 and ends on March 31. However, the actual “budget cycle,” representing the time between early budget preparation and final disbursements, begins some nine months earlier and lasts approximately 27 months – until the expiration of the State Comptroller’s authority to honor vouchers against the previous fiscal year’s appropriations. New York passed its FY 2018 Budget on April 9, 2017. To view New York’s FY 2018 health spending plan, click here. New York’s Fiscal Year 2018 budget includes a Medicaid drug expenditure cap provision that allows the state Department of Health to set an annual projected spending target for prescription drugs. If spending exceeds the cap, the state and its Drug Utilization Review Board, the regulatory body that reviews prescribing practices in Medicaid, can negotiate supplemental rebates with drug manufacturers to lower spending to allowable amounts.
- New York’s Department of Health administers its Certificate of Need process, which governs establishment, construction, renovation and major medical equipment acquisitions of health care facilities, such as hospitals, nursing homes, home care agencies, and diagnostic and treatment centers. As explained by the DOH: “The objectives of the CON process are to promote delivery of high quality health care and ensure that services are aligned with community need. CON provides the Department of Health oversight in limiting investment in duplicate beds, services and medical equipment which, in turn, limits associated health care costs.”
- On April 24, 2015, the FTC announced that it had sent a letter to the state of New York, expressing its concerns that the state’s certificate of public advantage (COPA) laws, which purport to bestow antitrust immunity on certain healthcare collaborations, were unnecessary because federal antitrust enforcement already considers whether consolidation benefits consumers. The FTC further explained that it was concerned that the COPA laws would be used to immunize transactions with anticompetitive effects, and that this would result in higher health care prices for consumers.
- The Attorney General and UnitedHealth Group entered into a settlement in January 2016 following the AG’s investigation of the health care organization for unlawfully restraining competition related to insurance for elder and long-term-care homes. According to the AG press release, the settlement provides that “United may not require skilled nursing facilities seeking to participate in United’s broader insurance network to also contract with United for a separate service – United’s institutional special needs plan.” The investigation stemmed from complaints that United was requiring skilled nursing facilities to participate in the special needs plans to be included in the broader United network. By doing this, United allegedly was cutting off competition to other special needs plans.
RESEARCH & ARTICLES
- The New York State Health Foundation has developed a program area in Empowering Health Care Consumers. This program came out of the organization’s work examining hospital price variation, price transparency and what price information consumers want, and developing a consumer-facing healthcare price tool for New Yorkers.
- A 2016 report on encouraging value-based healthcare competition puts the spotlight on healthcare consolidation in New York.