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In early June, legislation was introduced in the New York Senate
(S7615) that would permit independent health care providers in some
New York counties to negotiate collectively with insurers over the
terms and conditions (including fees) of their provider contracts.
Absent such a statute, joint negotiation of fees by independent
providers would constitute unlawful collective action that violates
Section 1 of the Sherman Act.
The proposed New York legislation would permit healthcare
providers in a limited number of northeastern New York counties
(those in and around Albany) to engage in such conduct as part of a
"demonstration" project that would be carefully monitored
by the State for possible expansion in the future. Under the
proposal, the right to negotiate collectively on fees would be
permitted only where the health care plan has a "substantial
market share," but that term is defined so broadly as to sweep
in a large number of insurers. Specifically, joint negotiation
would be permitted with any health insurer that covers in excess of
ten percent of the total covered lives in the service area or over
twenty five thousand lives (regardless of market share) or, in the
alternative, whenever the Insurance Commissioner has otherwise
determined that the bargaining power of the insurer
"significantly exceeds" that of the providers acting
individually.
The New York legislation is only the most recent of several
"physician collective negotiation" bills that have been
recently introduced at both the federal and state levels. See,
e.g., the "Quality Healthcare Coalition Act of 2011,"
H.R. 1409 (federal bill authorizing joint fee negotiation by
independent physicians); Connecticut House Bill 6343 (2011) and
Texas Senate Bill 8 (2011) (similar state law proposals). All such
legislation has been consistently opposed by the Federal Trade
Commission, which has taken the position that the enactment of such
legislation at either a federal or state level would have
anticompetitive effects and, rather than "balancing the
playing field" between providers and insurers, would result in
increased healthcare costs for consumers. See, e.g., FTC
letter to Connecticut State Senators Coleman and Kissel regarding
Connecticut House Bill 6343, June 8, 2011, available at
http://www. ftc.gov/os/2011/06/110608chc.pdf (encouraging the
Connecticut legislature not to enact legislation permitting
providers to negotiate collectively). Despite such opposition,
legislation permitting providers to negotiate collectively with
insurers has been enacted in a few states, and is currently in
effect in Alaska and Washington. Similar legislation was previously
enacted in Texas and New Jersey over ten years ago, but more
recently was permitted to "sunset" by the state
legislatures in those states.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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