S1434-2011 Actions

• Jan 4, 2012: REFERRED TO INSURANCE
• Jan 7, 2011: REFERRED TO INSURANCE

S1434-2011 Memo

BILL NUMBER:S1434

TITLE OF BILL:
An act
to amend the insurance law and the public health law,
in relation to prohibiting accident and
health insurers from offering incentives to health care providers
to prescribe a specific drug or medical product

PURPOSE:
To prohibit insurers from offering incentives to health care providers
for issuing or changing prescriptions.

SUMMARY OF PROVISIONS:
Section 1 - Amends section 3217-b of the Insurance Law to add new
subsection (j), which prohibits an insurer from providing payment or
incentive to a health care provider to issue or change a prescription
for a specific drug or medical product.

Section 2 - Amends section 4325 of the Insurance Law to add new
subsection (k), which prohibits an insurer from providing payment or
incentive to a health care provider to issue or change a prescription
for specific drug or medical product.

Section 3 - Amends section 4406-c of the Public Health Law to add a new
subdivision 5-e, which prohibits a healthcare plan from providing
payment or incentive to a health care provider to issue or change a
prescription for a specific drug or medical product.

Section 4- Effective date is ninety days after becoming a law.

JUSTIFICATION:
It has been reported that some insurance companies are providing
financial incentives to doctors for switching patients' prescriptions
to less expensive drugs. Some health plans have offered as much as
$100 each time a physician switches a patient's prescription from a
brand name to a generic. An upstate New York health plan began a
pilot project with several medical groups in 2006 as part of a
campaign to boost generic drug use. In this pilot, physicians who
increased their ratio of generic drug prescriptions to brand-name
drugs by five percentage points, would receive a slightly higher
reimbursement for their patient office visits.

While lowering health care costs is an essential and necessary task if
we are to meet the goal of ensuring that every New Yorker has
affordable quality health care, insurance companies should not offer
incentives to influence medical decisions. Monetary rewards for
health care providers who switch patients' prescriptions from a
costlier drug to a less expensive one should not be an acceptable
practice. This legislation would prevent companies in New York from
providing "kickbacks" to participating practitioners for changing
prescriptions. Although many generics work as well as their
counterpart brand-name products, ethical medical practice requires
that a prescribers' independent clinical judgment not be compromised.
A patient's diagnosis, symptoms, risk of complications, medical
profile and prior clinical history should be taken into account prior


to changing or prescribing a prescription. The decision to prescribe
a particular medication should be made without concern for financial
gain.

LEGISLATIVE HISTORY:
2009-2010: S.3037- Referred to Insurance
2008:      S.7516 - Referred to Insurance

FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
Ninety days after becoming a law.

S1434-2011 Text

                      S T A T E   O F   N E W   Y O R K
  ________________________________________________________________________

                                    1434

                         2011-2012 Regular Sessions

                              I N  SENATE

                               January 7, 2011
                                 ___________

  Introduced  by  Sen.  SALAND -- read twice and ordered printed, and when
    printed to be committed to the Committee on Insurance

  AN ACT to amend the insurance law and the public health law, in relation
    to prohibiting accident and health insurers from  offering  incentives
    to health care providers to prescribe a specific drug or medical prod-
    uct

    THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
  BLY, DO ENACT AS FOLLOWS:


    Section 1. Section 3217-b of the insurance law is amended by adding  a
  new subsection (j) to read as follows:

    (J)  NO  INSURER  SUBJECT  TO THE PROVISIONS OF THIS ARTICLE SHALL, BY
  CONTRACT, WRITTEN POLICY OR PROCEDURE OR ANY  OTHER  AGREEMENT,  PROVIDE
  PAYMENT  OR  ANY  OTHER  INCENTIVE TO A HEALTH CARE PROVIDER TO ISSUE OR
  CHANGE A PRESCRIPTION FOR A SPECIFIC DRUG OR MEDICAL PRODUCT. VIOLATIONS
  OF THIS SUBSECTION SHALL  BE  PUNISHABLE  AS  PROVIDED  IN  SECTION  ONE
  HUNDRED NINE OF THIS CHAPTER.
    S  2.  Section  4325  of  the insurance law is amended by adding a new
  subsection (k) to read as follows:

    (K) NO INSURER SUBJECT TO THE PROVISIONS OF  THIS  ARTICLE  SHALL,  BY
  CONTRACT,  WRITTEN  POLICY  OR PROCEDURE OR ANY OTHER AGREEMENT, PROVIDE
  PAYMENT OR ANY OTHER INCENTIVE TO A HEALTH CARE  PROVIDER  TO  ISSUE  OR
  CHANGE   A   PRESCRIPTION  FOR  A  SPECIFIC  DRUG  OR  MEDICAL  PRODUCT.
  VIOLATIONS OF THIS SUBSECTION SHALL BE PUNISHABLE AS PROVIDED IN SECTION
  ONE HUNDRED NINE OF THIS CHAPTER.
    S 3. Section 4406-c of the public health law is amended  by  adding  a
  new subdivision 5-e to read as follows:

    5-E.  NO  HEALTH  CARE  PLAN SUBJECT TO THE PROVISIONS OF THIS ARTICLE
  SHALL, BY CONTRACT, WRITTEN POLICY OR PROCEDURE OR ANY OTHER  AGREEMENT,
  PROVIDE  PAYMENT  OR  ANY  OTHER  INCENTIVE TO A HEALTH CARE PROVIDER TO
  ISSUE OR CHANGE A PRESCRIPTION FOR A SPECIFIC DRUG OR MEDICAL PRODUCT.
    S 4. This act shall take effect on the ninetieth day  after  it  shall
  have become a law.

   EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                        [ ] is old law to be omitted.
                                                             LBD05597-01-1