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

                                  5143

                       2013-2014 Regular Sessions

                          I N  A S S E M B L Y

                            February 20, 2013
                               ___________

Introduced  by  M.  of  A. GOTTFRIED, JACOBS, GALEF, GUNTHER, ROSENTHAL,
  SCARBOROUGH, HEASTIE, KAVANAGH, COLTON, QUART -- Multi-Sponsored by --
  M. of A. ABBATE, BOYLAND, BRENNAN, CLARK,  COOK,  CUSICK,  CYMBROWITZ,
  DINOWITZ,   ENGLEBRIGHT,   GLICK,  HIKIND,  HOOPER,  KELLNER,  LIFTON,
  V. LOPEZ, MAGNARELLI, MARKEY, MILLMAN, ORTIZ, PAULIN, PERRY,  SWEENEY,
  TITUS -- read once and referred to the Committee on Judiciary

AN  ACT to amend the general obligations law, the civil practice law and
  rules and the public health law, in relation to  holding  health  care
  organizations accountable for the consequences of their decisions

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

  Section 1. Legislative findings. The legislature  finds  that  a  wide
variety  of  entities are integrating the functions of paying for health
care, determining what health care is paid for, and providing the  care.
This integration of functions is breaking down traditional distinctions.
Increasingly,   payor  determinations  are  governing  health  care  and
controlling decisions that in the past  were  the  exclusive  domain  of
health  care  professionals  and patients. The legislature further finds
that this integration of functions makes it imperative that health  care
organizations  be  held  fully responsible for the consequences of their
decisions, much as health care professionals have been held  accountable
for the consequences of their decisions.
  S 2. The general obligations law is amended by adding two new sections
11-108 and 11-109 to read as follows:
  S  11-108.  ACCOUNTABILITY  OF  HEALTH  CARE ORGANIZATIONS. 1.   DEFI-
NITIONS. FOR PURPOSES OF THIS SECTION AND SECTION 11-109 OF THIS  TITLE,
UNLESS THE CONTEXT CLEARLY REQUIRES OTHERWISE:
  (A)  "HEALTH  CARE  ORGANIZATION" MEANS AN ENTITY (OTHER THAN A HEALTH
CARE PROVIDER) THAT APPROVES, PROVIDES, ARRANGES FOR, OR PAYS FOR HEALTH
CARE SERVICES, INCLUDING BUT NOT LIMITED TO:

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD00940-01-3

              

A. 5143                             2

  (I) A HEALTH MAINTENANCE ORGANIZATION  LICENSED  PURSUANT  TO  ARTICLE
FORTY-THREE  OF  THE  INSURANCE  LAW  OR  CERTIFIED  PURSUANT TO ARTICLE
FORTY-FOUR OF THE PUBLIC HEALTH LAW,
  (II)  ANY  OTHER ORGANIZATION CERTIFIED PURSUANT TO ARTICLE FORTY-FOUR
OF THE PUBLIC HEALTH LAW, OR
  (III) AN INSURER OR CORPORATION SUBJECT TO THE INSURANCE LAW.
  NO ENTITY OR PERSON SHALL BE DEEMED TO BE A HEALTH  CARE  ORGANIZATION
BECAUSE  THE  ENTITY  OR  PERSON  PROCURES  OR  PAYS FOR HEALTH COVERAGE
THROUGH AN ENTITY ACTING UNDER THE INSURANCE LAW OR  ARTICLE  FORTY-FOUR
OF THE PUBLIC HEALTH LAW.
  (B) "HEALTH CARE PROVIDER" MEANS AN ENTITY LICENSED OR CERTIFIED UNDER
ARTICLE TWENTY-EIGHT OR THIRTY-SIX OF THE PUBLIC HEALTH LAW, A PREFERRED
PROVIDER  ORGANIZATION,  A  PARTICIPATING  ENTITY THROUGH WHICH A HEALTH
MAINTENANCE ORGANIZATION OFFERS HEALTH SERVICES UNDER ARTICLE FORTY-FOUR
OF THE PUBLIC HEALTH LAW, AN ENTITY LICENSED OR CERTIFIED UNDER  ARTICLE
SIXTEEN,  THIRTY-ONE  OR  THIRTY-TWO OF THE MENTAL HYGIENE LAW, A HEALTH
CARE PRACTITIONER LICENSED, REGISTERED OR CERTIFIED UNDER TITLE EIGHT OF
THE EDUCATION LAW, OR A PROVIDER OF PHARMACEUTICAL PRODUCTS OR  SERVICES
OR DURABLE MEDICAL EQUIPMENT.
  (C)  "HEALTH  CARE  SERVICE"  MEANS  HEALTH CARE SERVICES, TREATMENTS,
PRODUCTS OR EQUIPMENT PROVIDED BY A HEALTH CARE PROVIDER.
  2. (A) WHENEVER A HEALTH CARE ORGANIZATION DELAYS, FAILS OR REFUSES TO
APPROVE, PROVIDE, ARRANGE FOR, OR PAY  FOR,  IN  A  TIMELY  MANNER,  ANY
HEALTH  CARE  SERVICE  TO  A PERSON TO THE EXTENT IT IS CONTRACTUALLY OR
LEGALLY OBLIGATED TO DO SO, IT SHALL BE LIABLE FOR ANY PERSONAL  INJURY,
DEATH OR DAMAGES CAUSED BY THE DELAY, FAILURE OR REFUSAL.
  (B)  A  HEALTH  CARE  ORGANIZATION SHALL BE LIABLE UNDER THIS SECTION,
UNDER OTHERWISE APPLICABLE RULES OF TORT AND CONTRACT LIABILITY, INCLUD-
ING BUT NOT LIMITED TO RULES RELATING TO  AGENCY,  VICARIOUS  LIABILITY,
AND  JOINT  AND  SEVERAL LIABILITY, FOR ANY ACT BY AN AGENT, CONTRACTOR,
PARTICIPATING ENTITY, OR HEALTH CARE PROVIDER, FOR WHICH THE HEALTH CARE
ORGANIZATION WOULD BE LIABLE IF IT WERE COMMITTED  BY  THE  HEALTH  CARE
ORGANIZATION.
  3.  THE  FAILURE  OF  THE PERSON (OR OF ANY OTHER PERSON ACTING ON THE
PERSON'S BEHALF) TO SEEK AN ALTERNATIVE PROVIDER OF OR TO  PAY  FOR  THE
HEALTH  CARE  SERVICE  SHALL NOT DIMINISH THE HEALTH CARE ORGANIZATION'S
LIABILITY OR CONSTITUTE CULPABLE CONDUCT FOR  THE  PURPOSES  OF  SECTION
FOURTEEN HUNDRED ELEVEN OF THE CIVIL PRACTICE LAW AND RULES.
  4.  NOTHING  IN  THIS  SECTION  SHALL LIMIT ANY OTHER RIGHT, REMEDY OR
CAUSE OF ACTION THAT ANY PERSON MAY OTHERWISE HAVE.
  5. NO CONTRACT OR AGREEMENT BETWEEN A HEALTH CARE ORGANIZATION  AND  A
HEALTH CARE PROVIDER SHALL:
  (A) DIRECTLY OR INDIRECTLY REQUIRE A HEALTH CARE PROVIDER TO INDEMNIFY
OR  HOLD HARMLESS THE HEALTH CARE ORGANIZATION FOR ANY LIABILITY RESULT-
ING FROM THE HEALTH CARE ORGANIZATION'S ACTS OR OMISSIONS; OR
  (B) WAIVE, LIMIT, OR DELEGATE THE LIABILITY OF THE HEALTH CARE  ORGAN-
IZATION UNDER THIS SECTION TO ANY HEALTH CARE PROVIDER.
  6. NO CONTRACT OR AGREEMENT BETWEEN A HEALTH CARE ORGANIZATION AND ANY
PERSON  SHALL  WAIVE OR LIMIT ANY LIABILITY OF THE HEALTH CARE ORGANIZA-
TION UNDER THIS SECTION TO THE PERSON.
  7. IF THE TIME IN WHICH A PLAINTIFF COULD HAVE COMMENCED AN ACTION FOR
PROFESSIONAL MALPRACTICE FOR THE ACT, ERROR OR  OMISSION  COMPLAINED  OF
HAS  EXPIRED  PRIOR TO THE COMMENCEMENT OF AN ACTION BROUGHT PURSUANT TO
THIS SECTION AGAINST A HEALTH CARE ORGANIZATION, THE DEFENDANT  IN  SAID
ACTION  SHALL  BE  BARRED FROM COMMENCING A THIRD-PARTY ACTION AGAINST A
PERSON NOT A PARTY WHO IS OR MAY BE LIABLE TO THAT DEFENDANT FOR ALL  OR

A. 5143                             3

PART OF THE PLAINTIFF'S CLAIM AGAINST THE DEFENDANT AND AGAINST WHOM THE
PLAINTIFF CANNOT COMMENCE AN ACTION FOR PROFESSIONAL  MALPRACTICE DUE TO
THE  EXPIRATION  OF THE STATUTE OF LIMITATIONS PRIOR TO THE COMMENCEMENT
OF THE ACTION AGAINST THE DEFENDANT.
  8.  A  HEALTH  CARE  ORGANIZATION SHALL EXERCISE REASONABLE CARE:  (A)
WHEN MAKING DECISIONS WHICH AFFECT THE HEALTH CARE SERVICE OF AN  ENROL-
LEE;  AND  (B) IN SELECTING AND EXERCISING INFLUENCE OR CONTROL OVER ITS
EMPLOYEES, AGENTS, OSTENSIBLE AGENTS, OR REPRESENTATIVES WHO ARE  ACTING
ON  ITS BEHALF, RESPECTING DECISIONS WHICH MAY AFFECT THE QUALITY OF THE
HEALTH CARE SERVICE PROVIDED TO ITS ENROLLEES.
  9. THIS SECTION SHALL NOT BE CONSTRUED TO DIMINISH ANY CONTRACTUAL  OR
LEGAL OBLIGATION OF THE HEALTH CARE ORGANIZATION, NOR TO CREATE AN OBLI-
GATION ON THE PART OF THE HEALTH CARE ORGANIZATION TO PROVIDE ANY HEALTH
CARE SERVICE TO AN ENROLLEE THAT IS NOT A COVERED BENEFIT.
  S  11-109.  PROTECTION  OF  HEALTH  CARE  PROVIDERS. 1. NO HEALTH CARE
ORGANIZATION OR HEALTH CARE  PROVIDER  SHALL,  BY  CONTRACT,  POLICY  OR
PROCEDURE:
  (A)  PROHIBIT  OR  RESTRICT  ANY  HEALTH  CARE  PROVIDER FROM FILING A
COMPLAINT;
  (B) PROHIBIT OR RESTRICT ANY HEALTH CARE PROVIDER FROM MAKING A REPORT
OR COMMENTING TO THE APPROPRIATE GOVERNMENT AGENCY REGARDING  THE  POLI-
CIES  OR  PRACTICES  OF THE ORGANIZATION WHICH MAY NEGATIVELY AFFECT THE
QUALITY OF OR ACCESS TO HEALTH CARE SERVICES; OR
  (C) PROHIBIT OR RESTRICT ANY HEALTH CARE PROVIDER FROM  DISCLOSING  OR
COMMENTING  ON POLICIES OR PRACTICES OF THE ORGANIZATION WHICH MAY NEGA-
TIVELY AFFECT THE QUALITY OF OR ACCESS TO HEALTH CARE  SERVICES  TO  THE
PUBLIC.
  THIS  SUBDIVISION  SHALL  NOT  BE  CONSTRUED  TO  PERMIT A HEALTH CARE
PROVIDER TO DISCLOSE ANY INFORMATION REGARDING  A  PATIENT  WHICH  WOULD
OTHERWISE  BE  DEEMED CONFIDENTIAL OR PRIVILEGED, OR WHICH SHOULD NOT BE
DISCLOSED OR DISCUSSED ACCORDING TO LAW OR REASONABLE PROFESSIONAL STAN-
DARDS.
  2. NO HEALTH CARE ORGANIZATION OR HEALTH CARE PROVIDER SHALL TERMINATE
A CONTRACT OR EMPLOYMENT OF A HEALTH CARE PROVIDER, OR REFUSE  TO  RENEW
SUCH  A  CONTRACT, OR PENALIZE A HEALTH CARE PROVIDER OR REDUCE OR LIMIT
THE COMPENSATION OF A HEALTH CARE PROVIDER SOLELY BECAUSE A HEALTH  CARE
PROVIDER HAS:
  (A)  ADVOCATED  FOR,  RECOMMENDED OR PROVIDED A PARTICULAR HEALTH CARE
SERVICE TO A PATIENT, TO WHICH THE PATIENT WAS ENTITLED  BY CONTRACT  OR
LAW;
  (B) TAKEN ANY ACTION UNDER SUBDIVISION ONE OF THIS SECTION;
  (C)  APPEALED  OR  ASSISTED IN APPEALING A DECISION OF THE HEALTH CARE
ORGANIZATION; OR
  (D) REQUESTED A HEARING OR REVIEW TO WHICH THE PROVIDER WAS ENTITLED.
  3. NO HEALTH CARE ORGANIZATION OR HEALTH CARE PROVIDER SHALL APPLY ANY
INCENTIVE, WHETHER MONETARY OR OTHERWISE,  TO  A  HEALTH  CARE  PROVIDER
INTENDED  OR  HAVING  THE EFFECT OF INDUCING THE HEALTH CARE PROVIDER TO
DELAY, FAIL OR REFUSE TO PROVIDE ANY HEALTH  CARE  SERVICE  TO  WHICH  A
PATIENT IS ENTITLED BY CONTRACT OR LAW.
  S  3.  Section  1602 of the civil practice law and rules is amended by
adding a new subdivision 14 to read as follows:
  14. NOT APPLY TO AN ACTION AGAINST A HEALTH CARE ORGANIZATION  BROUGHT
PURSUANT TO SECTION 11-108 OF THE GENERAL OBLIGATIONS LAW.
  S  4. Subdivision 1 of section 4410 of the public health law, as added
by chapter 938 of the laws of 1976, is amended to read as follows:

A. 5143                             4

  1. The provision of comprehensive health services  directly  or  indi-
rectly,  by  a health maintenance organization through its comprehensive
health services plan shall not be considered the practice of the profes-
sion of medicine by such organization or plan.  [However,  each]  EXCEPT
THAT:
  (A) THIS SUBDIVISION SHALL NOT BE CONSTRUED TO LIMIT ANY LIABILITY THE
HEALTH  MAINTENANCE  ORGANIZATION  OR  ITS COMPREHENSIVE HEALTH SERVICES
PLAN WOULD OTHERWISE HAVE RELATING TO ANY PROFESSIONAL SERVICES RENDERED
BY, ON BEHALF OF, OR IN CONNECTION WITH THE ORGANIZATION OR PLAN.
  (B) EACH member, employee or agent of such organization or plan  shall
be  fully  and  personally  liable  and accountable for any negligent or
wrongful act or misconduct committed by him OR HER or any  person  under
his  OR  HER direct supervision and control while rendering professional
services on behalf of [such] THE organization or plan.
  (C) NO CONTRACT OR AGREEMENT BETWEEN A HEALTH MAINTENANCE ORGANIZATION
OR ITS COMPREHENSIVE HEALTH SERVICES PLAN AND ANY HEALTH  CARE  PROVIDER
SHALL  DELEGATE  THE LIABILITY OF THE HEALTH MAINTENANCE ORGANIZATION TO
ANY HEALTH CARE PROVIDER OR SHALL REQUIRE THE HEALTH  CARE  PROVIDER  TO
INDEMNIFY  OR  HOLD  HARMLESS THE ORGANIZATION OR PLAN FOR ANY LIABILITY
THE ORGANIZATION OR PLAN MAY INCUR.
  S 5. If any provision of this act or the application thereof shall  be
held to be invalid, such invalidity shall not affect other provisions or
other  applications  of  any  provision  of  this act which can be given
effect without the invalid provision or application, and  to  that  end,
the provisions and application of this act are severable.
  S 6. This act shall take effect immediately.