New York is a leader in healthcare price transparency initiatives. The state passed legislation in 2011 that enables the creation of an all-payer claims database and has operated its all-payer database (APD) since 2016. The APD collects data from public and private insurance carriers, health plans, third-party administrators, and pharmacy benefit managers, as well as Medicaid and Medicare, with the goal to provide a data and analytical resource for policymakers and researchers.
New York provides comprehensive protections against surprise or balanced billing in both emergency and non-emergency situations, requiring insurers to cover services inadvertently received from out-of-network providers and ensure cost-sharing parity. The state also provides coverage parity and cost-sharing parity for covered telehealth services.
In healthcare provider markets, the state’s merger review authority mandates that any merger involving a not-for-profit hospital must provide notice and obtain approval with the court district in which the corporation is located or through the Attorney General. New York also requires a Certificate of Need for acquisition or change of ownership of health care facilities.
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.
Additionally, the Legislature has made attempts to address anticompetitive contract clauses in provider and insurer contracts. New York law provides that when a contract between a managed care organization and a provider includes either a most-favored nation or exclusivity clause, it must be approved by the insurance commissioner. In recent sessions, the legislature also proposed a stricter, comprehensive ban of most-favored nation, all-or-nothing, and anti-tiering and anti-steering provisions in provider contracts.
In recent sessions, the Legislature also considered legislation to address pharmaceutical pricing, including one that would prohibit drug tiers based on the expense of disease category and charging cost-sharing percentages for prescriptions. Another legislation requires pharmacy benefit managers (PBMs) to disclose information such as the aggregate amount in rebates they receive. In the 2020 State of the State, Governor Andrew M. Cuomo presented a three-part plan to combat rising prescription drug prices, which would 1) introduce legislation to cap co-payments for insulin, 2) empower the State Department of Financial Services to investigate skyrocketing prescription drug prices, and 3) establish Commission to study the feasibility and benefits of Canadian Drug Importation Program.
See below for an overview of existing New York state mandates. Click on citation tab for detailed information of specific statutes (click link to download statute text).
Current Legislative Session: 1/6/2021 - 1/5/2022 (2021-2022 term). *Current session bill updates are ongoing. Check back weekly for updates.
FY 2020 BUDGET
New 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 2020 Budget on March 31, 2019. The governor’s health care overview of the executive budget is available here.
New York’s FY 2020 budget codifies provisions of the Affordable Care Act into state law, including protections for people with pre-existing conditions, requirements for all insurers to cover the 10 essential health benefits, and prohibitions against discriminatory benefit designs. The budget also continues the FY 2018 Medicaid drug expenditure cap provision that allows the state Department of Health to set an annual projected spending target for prescription drugs, with some modifications.
- 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.
- 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.
- A suit against Alzheimer’s drug maker Forest Laboratories settled in 2015 after the AG claimed that the drug-maker engaged in a tactic called the “forced switch,” which involves switching patients from drugs whose patents are close to expiring to drugs with longer patent lives. The New York Times covered the initial case, and STAT reported on the settlement. The New York AG’s press releases and filings in the case are available here.
- The Attorney General (AG) and two generic pharmaceutical manufactures entered into a settlement in February 2014 that required both manufacturers to end an anticompetitive agreement. According to the AG press release, under the agreement the pharmaceutical manufactures “committed not to challenge certain regulatory exclusivities held by the other, served to protect each party’s market positions with respect to dozens of drugs, and reduced the risk that each would face greater competition for its generic drugs.” The settlement also required the manufacturers to agree to refrain from entering similar agreements in the future.
- In 2014, Attorney General Schneiderman announced an agreement with GHI, a subsidiary of EmblemHealth, Inc., New York’s largest health insurer, that requires improved plan disclosures for out-of-network provider benefits to those members who sign up for GHI’s Comprehensive Benefits Plan. The settlement also requires GHI establish a $3.5 million consumer assistance fund to provide financial relief to class members, most of whom were New York City employees.
- On December 11, 2013, AG Schneiderman announced a settlement with the two general acute care hospitals in the city of Utica, Faxton-St. Luke’s Healthcare and St. Elizabeth Medical Center. The settlement allowed the two financially troubled hospitals, to merge under certain conditions, including a prohibition on exclusionary conduct, temporary rate protection, and continued monitoring by the AG’s office. About the settlement, the AG said: “This settlement allows Utica’s two biggest hospitals to combine in order to survive in a challenging economic environment, while ensuring that the hospitals will fulfill their promise to use the partnership to improve patients’ access to quality health care and not to increase prices.”
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.
- In 2014, the New York legislature passed the Emergency Services and Balance Billing Law (“Surprise Billing” law). Five years post-enactment, a study assesses the implementation of the law and how its unique “baseball-style” arbitration approach to settling payment disputes is working for stakeholders.
- New York State Senate
- New York State Assembly
- New York Office of the Attorney General
- New York Department of Health
- New York Department of Financial Services
- New York All Payer Database
- Health Data NY