Authorizes the Nassau health care corporation to enter into contracts and arrangements providing for the creation and operation of a health care delivery system network.
TITLE OF BILL: An act to amend the public authorities law, in relation to authorizing the Nassau health care corporation to enter into agreements for the creation and operation of a health care delivery system network
PURPOSE: To clarify that Nassau Health Care Corporation may exercise its general and special powers regardless of whether such exercise might have an impact on competition.
SUMMARY OF PROVISIONS:
Section one adds a new subsection three to § 3401 of the Public Authorities Law to provide further information regarding the legislative purpose and findings. This provision provides that as a free-standing public health care provider, the Nassau Health Care Corporation (NHCC) is at a competitive disadvantage in the emerging health care environment, which jeopardizes its ability to provide quality health care services to medically underserved populations. Thus, the state authorizes the corporation to engage in collaborative activities consistent with its health care purposes.
Section two adds a new subsection 10 to § 3405 of the Public Authorities Law to clarify that in carrying out its health care purposes, the NHCC may engage in arrangements, contracts, information sharing, and other collaborative activities with public or private entities and individuals including joint ventures and joint negotiations with physicians, hospitals and payors. Such negotiations may result in separate or combined agreements, leases and/or activities involving delivery system network creation and operation that may displace competition and might otherwise be considered violations of state or federal antitrust laws. This provision provides the necessary legislative declaration for the activities of the corporation and of the private entities and individuals with which it collaborates, to be immunized from liability under federal and state antitrust laws. The corporation and its collaborators shall remain subject to generally applicable provisions of the Public Health Law, notwithstanding any provisions herein. The corporation also must file an annual report with the Department of Health concerning the impact of the collaborations authorized under this section and concerning the impact on reimbursement to the corporation's facilities by managed care organizations. The Department shall then have 60 days to request that the corporation make changes to its policies to further the interests of the state.
Section two provides the act shall take effect immediately.
JUSTIFICATION: The NHCC, created under the Public Authorities Law, assumed responsibility for operation of Nassau University Medical Center (NUMC), a general hospital, in September of 1999. Likewise NUMC assumed responsibility for operation of the A. Holly Patterson Extended Care Facility (AHP), a skilled nursing facility and several Community Health Centers (CHCs). All such facilities had previously been operated by Nassau County. NHCC's facilities provide an extensive range of acute care, nursing home, and ambulatory services to an indigent population in Nassau County. NUMC provides more than 50% of
the Medicaid discharges in Nassau County and is the primary provider of ambulatory care to the County's Medicaid and indigent population. As a free-standing public healthcare entity, NHCC faces unique challenges as it seeks to carry out its mission as a safety-net facility. In particular, its ability to collaborate with private entities and individuals is clear in the general and special powers granted to it under Public Authorities Law §§ 3404 and 3405. However, in a recent Supreme Court decision FTC v. Phoebe Putney Health System, Inc, the Court held that in order for state action immunity to apply the state must clearly articulate and affirmative ly express a policy to displace competition. Therefore, NHCC seeks to clarify the state's intention that such collaborations may be carried out regardless of whether they displace competition and may otherwise be considered violations of state or federal antitrust laws.
LEGISLATIVE HISTORY: New bill.
FISCAL IMPLICATIONS: None.
EFFECTIVE DATE: Immediately.
STATE OF NEW YORK ________________________________________________________________________ 4624--A 2013-2014 Regular Sessions IN SENATE April 16, 2013 ___________Introduced by Sen. HANNON -- read twice and ordered printed, and when printed to be committed to the Committee on Corporations, Authorities and Commissions -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the public authorities law, in relation to authorizing the Nassau health care corporation to enter into agreements for the creation and operation of a health care delivery system network THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Section 3401 of the public authorities law is amended by adding a new subdivision 3 to read as follows: 3. AS A FREE-STANDING PUBLIC HEALTH CARE PROVIDER, THE CORPORATION IS AT A COMPETITIVE DISADVANTAGE IN THE CURRENT AND EMERGING HEALTH CARE ENVIRONMENT, YET IT CANNOT BECOME PART OF A LARGER SYSTEM OF CORPORATE ENTITIES WHILE MAINTAINING ITS PUBLIC STATUS. SIGNIFICANT INVESTMENTS IN THE PUBLIC ASSETS OF THE CORPORATION AND ITS EFFORTS TO PROVIDE HIGH QUALITY HEALTH CARE SERVICES TO MEDICALLY UNDERSERVED POPULATIONS ARE JEOPARDIZED BY THE CORPORATION'S INABILITY TO COMPETE ON ITS OWN AND BY POTENTIAL LIMITS ON ITS ABILITY TO COLLABORATE WITH OTHER PUBLIC AND PRIVATE PROVIDERS, ENTITIES AND INDIVIDUALS. THE STATE FINDS THAT THE BENEFITS OF COLLABORATION BY THE CORPORATION OUTWEIGH ANY ADVERSE IMPACT ON COMPETITION. THE BENEFITS OF THE CORPORATION'S COLLABORATIVE EFFORTS INCLUDE PRESERVING AND EXPANDING NEEDED HEALTH CARE SERVICES IN ITS PRIMARY SERVICE AREA; CONSOLIDATING UNNEEDED OR DUPLICATIVE HEALTH CARE SERVICES; ENHANCING THE QUALITY OF, AND EXPANDING ACCESS TO, HEALTH CARE DELIVERED TO MEDICALLY UNDERSERVED POPULATIONS; LOWERING COSTS AND IMPROVING THE EFFICIENCY OF THE HEALTH CARE SERVICES IT DELIVERS; AND ACHIEVING IMPROVED REIMBURSEMENT FROM NON-GOVERNMENTAL PAYORS. BASED ON THE FINDINGS CONTAINED IN THIS SECTION, THE STATE HEREBY AFFIRMATIVELY EXPRESSES A POLICY TO ALLOW THE CORPORATION TO ENGAGE IN COLLABORATIVE ACTIVITIES CONSISTENT WITH ITS HEALTH CARE PURPOSES, NOTWITHSTANDINGEXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD10327-03-3 S. 4624--A 2
THAT THOSE COLLABORATIONS MAY HAVE THE EFFECT OF DISPLACING COMPETITION IN THE PROVISION OF HOSPITAL, PHYSICIAN OR OTHER HEALTH CARE-RELATED SERVICES. WITH RESPECT TO THE COLLABORATIVE ACTIVITIES CONTEMPLATED IN THIS SECTION AND IN SUBDIVISION TEN OF SECTION THIRTY-FOUR HUNDRED FIVE OF THIS TITLE, THE CORPORATION AND THE PUBLIC OR PRIVATE ENTITIES AND INDIVIDUALS WITH WHICH IT COLLABORATES SHALL BE IMMUNIZED FROM LIABILITY UNDER THE FEDERAL AND STATE ANTITRUST LAWS. S 2. Section 3405 of the public authorities law is amended by adding a new subdivision 10 to read as follows: 10. (A) IN CARRYING OUT ITS HEALTH CARE PURPOSES THROUGH THE EXERCISE OF THE SPECIAL POWERS EXERCISED PURSUANT TO THIS SECTION AND THE GENERAL POWERS EXERCISED PURSUANT TO SECTION THIRTY-FOUR HUNDRED FOUR OF THIS TITLE, THE CORPORATION IS AUTHORIZED TO ENGAGE IN ARRANGEMENTS, CONTRACTS, INFORMATION SHARING AND OTHER COLLABORATIVE ACTIVITIES WITH PUBLIC OR PRIVATE ENTITIES AND INDIVIDUALS IRRESPECTIVE OF THE COMPET- ITIVE CONSEQUENCES OF THESE ACTIVITIES AND NOTWITHSTANDING THAT THESE ACTIVITIES MAY HAVE THE EFFECT OF DISPLACING COMPETITION IN THE PROVISION OF HOSPITAL, PHYSICIAN, OR OTHER HEALTH CARE-RELATED SERVICES. THESE COLLABORATIVE ACTIVITIES MAY INCLUDE WITHOUT LIMITATION: JOINT VENTURES; JOINT NEGOTIATIONS WITH PHYSICIANS, HOSPITALS AND PAYORS, WHETHER SUCH NEGOTIATIONS RESULT IN SEPARATE OR COMBINED AGREEMENTS; LEASES; AND/OR AGREEMENTS WHICH INVOLVE DELIVERY SYSTEM NETWORK CREATION AND OPERATION, PROVIDED THAT, THE CORPORATION SHALL EXERCISE STATE OVER- SIGHT BY DETERMINING WHETHER PARTICULAR COLLABORATIONS WITH PUBLIC OR PRIVATE ENTITIES AND INDIVIDUALS FURTHER THE INTERESTS OF THE STATE AS SET FORTH IN THIS SUBDIVISION AND IN SUBDIVISION THREE OF SECTION THIR- TY-FOUR HUNDRED ONE OF THIS TITLE. IN UNDERTAKING THESE COLLABORATIVE ACTIVITIES, THE CORPORATION AND THE PUBLIC OR PRIVATE ENTITIES AND INDI- VIDUALS WITH WHICH IT COLLABORATES SHALL BE IMMUNIZED FROM LIABILITY UNDER THE FEDERAL AND STATE ANTITRUST LAWS. (B) NOTWITHSTANDING THE PROVISIONS OF THIS SECTION, THE CORPORATION AND ITS COLLABORATORS SHALL REMAIN SUBJECT TO GENERALLY APPLICABLE PROVISIONS OF THE PUBLIC HEALTH LAW AND REGULATIONS THEREUNDER. IN ADDI- TION, THE CORPORATION SHALL FILE AN ANNUAL REPORT WITH THE STATE DEPART- MENT OF HEALTH, AS ADDITIONAL STATE OVERSIGHT, CONCERNING THE IMPACT OF THE COLLABORATIONS AUTHORIZED UNDER THIS SECTION ON THE ADVANTAGES AND DISADVANTAGES IDENTIFIED BY THE DEPARTMENT OF HEALTH IN ITS REQUEST FOR APPLICATIONS FOR HEAL NY PHASE 21, ENTITLED "RESTRUCTURING INITIATIVES IN MEDICAID REDESIGN," AND CONCERNING THE IMPACT ON REIMBURSEMENT TO THE CORPORATION'S FACILITIES BY MANAGED CARE ORGANIZATIONS WITH RESPECT TO COMMERCIAL PLAN MEMBERS, INCLUDING THE EXTENT TO WHICH RATES HAVE BEEN NEGOTIATED THAT MORE FAIRLY COMPENSATE THE CORPORATION'S FACILITIES FOR THE COST OF PROVIDING SERVICES TO COMMERCIAL ENROLLEES, WITHOUT CROSS-SUBSIDY FROM MEDICAID OR OTHER GOVERNMENTAL PROGRAMS. IN RESPONSE TO THE REPORT, THE DEPARTMENT OF HEALTH SHALL HAVE SIXTY DAYS AFTER THE REPORT HAS BEEN FILED TO REQUEST, IN WRITING, THAT THE CORPORATION MAKE CHANGES TO ITS POLICIES TO ENSURE THAT THE COLLABORATIONS AUTHORIZED UNDER THIS SECTION FURTHER THE INTERESTS OF THE STATE. S 3. This act shall take effect immediately.