Two pieces of closely watched healthcare legislation saw success in the state Legislature at the very end of the session.
They are an independent dispute-resolution bill for out-of-network emergency hospital charges and a bill to ban health plans from changing their drug formularies in the middle of a contract year.
Recent changes to the dispute-resolution bill marked its almost certain passage. It passed the Senate Wednesday and was awaiting a floor vote in the Assembly.
The legislation originally called for insurance companies to pay hospitals what they deem reasonable for out-of-network emergency bills or submit them to independent dispute-resolution.
But an amendment required insurers to make an initial payment to hospitals of at least 25% above the in-network rate for the service provided. The payment would not preclude either party from seeking independent dispute-resolution, including for any part of the initial payment deemed unreasonable, according to the amended bill memo.
Hospitals previously voiced their opposition to the bill, while insurers and others lobbied and lauded it.
"All stakeholders wanted a fair outcome," a spokesman for the Greater New York Hospital Association said in an email earlier this week after changes were made to the bill. "GNYHA's greatest concern with the original bill was its certain impact on a current, major incentive for insurers to reach contract agreements with hospitals—that if an insurer went out of network with a hospital, they would be billed 'charges' for emergency services."
An amendment also was made to legislation to prevent insurers from stopping coverage of drugs or increasing the amount of money patients pay for them out of pocket in the middle of a contract.
The amendment exempted labor unions because they wanted to maintain their leverage in negotiating drug prices. The bill passed the Legislature Wednesday.
The New York Health Plan Association voiced its dismay over the legislation leading up to the end of the legislative session and after its passage, stating it would contribute to higher health insurance premiums for employers and consumers.
"Rising costs remain the most pressing issue in healthcare facing employers and consumers," said Eric Linzer, president and CEO of the association, in a statement. "The exorbitant prices charged for prescription drugs is a major factor driving premium increases. Unfortunately, several legislative proposals removing tools to address those costs—including prohibiting midyear formulary changes, restrictions on drug substitutions and new obligations on PBMs—will translate into higher healthcare costs for employers and consumers."
Patient advocacy groups such as the AARP and Global Health Living Foundation have remained steadfast in their support of the formulary-change legislation.
"Dispute-resolution, formulary-change bills pass Legislature" originally appeared in Crain's New York Business.
