Bill Text: NY A00882 | 2011-2012 | General Assembly | Introduced
Bill Title: Relates to the payment of medical malpractice insurance premiums and creates the health care access protection fund.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2012-01-04 - referred to insurance [A00882 Detail]
Download: New_York-2011-A00882-Introduced.html
S T A T E O F N E W Y O R K
________________________________________________________________________
882
2011-2012 Regular Sessions
I N A S S E M B L Y
(PREFILED)
January 5, 2011
___________
Introduced by M. of A. KELLNER -- read once and referred to the Commit-
tee on Codes
AN ACT to amend chapter 266 of the laws of 1986 amending the civil prac-
tice law and rules and other laws relating to malpractice and profes-
sional medical conduct; and to amend the state finance law, in
relation to creating the health care access protection fund; and to
amend the insurance law, in relation to the payment of medical malp-
ractice insurance premiums
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
1 Section 1. Legislative Intent. The legislature finds and declares that
2 access to quality health care is a critical element to achieving and
3 sustaining a high quality of life for all New Yorkers, and that assuring
4 an adequate supply of physicians in New York state is an essential
5 component to ensuring access to quality health care. As a result of
6 rapidly rising liability insurance premiums, physicians are being forced
7 to limit the scope of their practice, increase the number of patients
8 they have to see each day, leave New York, or leave the practice of
9 medicine entirely, thereby compromising patient access and/or the quali-
10 ty of medical care to New Yorkers. The legislature further finds that
11 the health insurance industry has generated enormous profits and
12 reserves far beyond that required by law. Since the payers exercise
13 absolute control over the revenue side of most physicians' practices, it
14 is only right and proper that some of those reserves and profits be used
15 to reduce the burden of physicians' medical liability premiums and to
16 ensure that reimbursement rates adequately reflect future annual
17 increases in medical malpractice premiums to be paid by physicians.
18 S 2. Paragraph (a) of subdivision 1 of section 18 of chapter 266 of
19 the laws of 1986, amending the civil practice law and rules and other
20 laws relating to malpractice and professional medical conduct, as
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD00587-01-1
A. 882 2
1 amended by section 23 of part B of chapter 58 of the laws of 2008, is
2 amended to read as follows:
3 (a) The superintendent of insurance and the commissioner of health or
4 their designee shall, from funds available in the hospital excess
5 liability pool created pursuant to subdivision (5) of this section,
6 purchase a policy or policies for excess insurance coverage, as author-
7 ized by paragraph (1) of subsection (e) of section 5502 of the insurance
8 law; or from an insurer, other than an insurer described in section 5502
9 of the insurance law, duly authorized to write such coverage and actual-
10 ly writing medical malpractice insurance in this state; or shall
11 purchase equivalent excess coverage in a form previously approved by the
12 superintendent of insurance for purposes of providing equivalent excess
13 coverage in accordance with section 19 of chapter 294 of the laws of
14 1985, for medical or dental malpractice occurrences between July 1, 1986
15 and June 30, 1987, between July 1, 1987 and June 30, 1988, between July
16 1, 1988 and June 30, 1989, between July 1, 1989 and June 30, 1990,
17 between July 1, 1990 and June 30, 1991, between July 1, 1991 and June
18 30, 1992, between July 1, 1992 and June 30, 1993, between July 1, 1993
19 and June 30, 1994, between July 1, 1994 and June 30, 1995, between July
20 1, 1995 and June 30, 1996, between July 1, 1996 and June 30, 1997,
21 between July 1, 1997 and June 30, 1998, between July 1, 1998 and June
22 30, 1999, between July 1, 1999 and June 30, 2000, between July 1, 2000
23 and June 30, 2001, between July 1, 2001 and June 30, 2002, between July
24 1, 2002 and June 30, 2003, between July 1, 2003 and June 30, 2004,
25 between July 1, 2004 and June 30, 2005, between July 1, 2005 and June
26 30, 2006, between July 1, 2006 and June 30, 2007, between July 1, 2007
27 and June 30, 2008, between July 1, 2008 and June 30, 2009, between July
28 1, 2009 and June 30, 2010, and between July 1, 2010 and June 30, 2011 or
29 reimburse the hospital where the hospital purchases equivalent excess
30 coverage as defined in subparagraph (i) of paragraph (a) of subdivision
31 (1-a) of this section for medical or dental malpractice occurrences
32 between July 1, 1987 and June 30, 1988, between July 1, 1988 and June
33 30, 1989, between July 1, 1989 and June 30, 1990, between July 1, 1990
34 and June 30, 1991, between July 1, 1991 and June 30, 1992, between July
35 1, 1992 and June 30, 1993, between July 1, 1993 and June 30, 1994,
36 between July 1, 1994 and June 30, 1995, between July 1, 1995 and June
37 30, 1996, between July 1, 1996 and June 30, 1997, between July 1, 1997
38 and June 30, 1998, between July 1, 1998 and June 30, 1999, between July
39 1, 1999 and June 30, 2000, between July 1, 2000 and June 30, 2001,
40 between July 1, 2001 and June 30, 2002, between July 1, 2002 and June
41 30, 2003, between July 1, 2003 and June 30, 2004, between July 1, 2004
42 and June 30, 2005, between July 1, 2005 and June 30, 2006, between July
43 1, 2006 and June 30, 2007, between July 1, 2007 and June 30, 2008,
44 between July 1, 2008 and June 30, 2009, between July 1, 2009 and June
45 30, 2010, and between July 1, 2010 and June 30, 2011 for physicians or
46 dentists certified as eligible for each such period or periods pursuant
47 to subdivision (2) of this section by a general hospital licensed pursu-
48 ant to article 28 of the public health law; provided that no single
49 insurer shall write more than fifty percent of the total excess premium
50 for a given policy year; and provided, however, that such eligible
51 physicians or dentists must have in force an individual policy, from an
52 insurer licensed in this state of primary malpractice insurance coverage
53 in amounts of no less than one million three hundred thousand dollars
54 for each claimant and three million nine hundred thousand dollars for
55 all claimants under that policy during the period of such excess cover-
56 age for such occurrences or be endorsed as additional insureds under a
A. 882 3
1 hospital professional liability policy which is offered through a volun-
2 tary attending physician ("channeling") program previously permitted by
3 the superintendent of insurance during the period of such excess cover-
4 age for such occurrences. During such period, such policy for excess
5 coverage or such equivalent excess coverage shall, when combined with
6 the physician's or dentist's primary malpractice insurance coverage or
7 coverage provided through a voluntary attending physician ("channeling")
8 program, total an aggregate level of two million three hundred thousand
9 dollars for each claimant and six million nine hundred thousand dollars
10 for all claimants from all such policies with respect to occurrences in
11 each of such years provided, however, if the cost of primary malpractice
12 insurance coverage in excess of one million dollars, but below the
13 excess medical malpractice insurance coverage provided pursuant to this
14 act, exceeds the rate of nine percent per annum, then the required level
15 of primary malpractice insurance coverage in excess of one million
16 dollars for each claimant shall be in an amount of not less than the
17 dollar amount of such coverage available at nine percent per annum; the
18 required level of such coverage for all claimants under that policy
19 shall be in an amount not less than three times the dollar amount of
20 coverage for each claimant; and excess coverage, when combined with such
21 primary malpractice insurance coverage, shall increase the aggregate
22 level for each claimant by one million dollars and three million dollars
23 for all claimants; and provided further, that, with respect to policies
24 of primary medical malpractice coverage that include occurrences between
25 April 1, 2002 and June 30, 2002, such requirement that coverage be in
26 amounts no less than one million three hundred thousand dollars for each
27 claimant and three million nine hundred thousand dollars for all claim-
28 ants for such occurrences shall be effective April 1, 2002. PROVIDED
29 FURTHER THAT, EFFECTIVE JULY 1, 2011, THE COST OF THE FIRST FIVE HUNDRED
30 FIFTY THOUSAND DOLLARS OF AN ELIGIBLE PHYSICIAN'S PRIMARY MEDICAL MALP-
31 RACTICE COVERAGE SHALL BE PAID THROUGH THE HEALTH CARE ACCESS PROTECTION
32 FUND CREATED PURSUANT TO SECTION 97-KKKK OF THE STATE FINANCE LAW.
33 S 3. The state finance law is amended by adding a new section 97-kkkk
34 to read as follows:
35 S 97-KKKK. HEALTH CARE ACCESS PROTECTION FUND. FUNDS ACCUMULATED,
36 INCLUDING INCOME FROM INVESTED FUNDS, FROM THE PAYMENTS SPECIFIED IN
37 SECTIONS THREE THOUSAND TWO HUNDRED FORTY AND FOUR THOUSAND THREE
38 HUNDRED TWENTY-EIGHT OF THE INSURANCE LAW SHALL BE DEPOSITED AND CREDIT-
39 ED TO A SPECIAL REVENUE FUND-OTHER FUND TO BE ESTABLISHED BY THE COMP-
40 TROLLER. TO THE EXTENT OF FUNDS APPROPRIATED THEREFOR, THE COMMISSIONER
41 SHALL PROVIDE FUNDING FOR THE PURPOSES OF COVERING THE COST OF THE FIRST
42 FIVE HUNDRED FIFTY THOUSAND DOLLARS OF PRIMARY MEDICAL MALPRACTICE
43 COVERAGE OF A PHYSICIAN WHO IS ELIGIBLE TO OBTAIN EXCESS COVERAGE, AS
44 SET FORTH PURSUANT TO PARAGRAPH (A) OF SUBDIVISION ONE OF SECTION EIGH-
45 TEEN OF CHAPTER TWO HUNDRED SIXTY-SIX OF THE LAWS OF NINETEEN HUNDRED
46 EIGHTY-SIX.
47 S 4. The insurance law is amended by adding a new section 3240 to read
48 as follows:
49 S 3240. LOSS RATIO PAYMENT. BEGINNING IN CALENDAR YEAR TWO THOUSAND
50 NINE, IF THE LOSS RATIO FOR AN INDIVIDUAL HEALTH INSURANCE POLICY FORM,
51 A SMALL GROUP HEALTH INSURANCE OR A LARGE GROUP HEALTH INSURANCE POLICY
52 FORM IS LESS THAN EIGHTY-SEVEN PERCENT, AN INSURER SHALL PAY TO THE
53 COMMISSIONER OF HEALTH OR SUCH COMMISSIONER'S DESIGNEE A PERCENT OF THE
54 AGGREGATE PREMIUM COLLECTED FOR THE POLICY FORM IN THE PREVIOUS YEAR
55 EQUAL TO THE DIFFERENCE BETWEEN THE MINIMUM LOSS RATIO FOR THE POLICY
56 FORM STARTED IN THIS SECTION AND THE ACTUAL LOSS RATIO; PROVIDED, HOWEV-
A. 882 4
1 ER, SUCH AMOUNTS SHALL BE OFFSET BY ANY AMOUNT REQUIRED TO BE RETURNED
2 TO POLICY HOLDERS IN ACCORDANCE WITH SECTION THREE THOUSAND TWO HUNDRED
3 THIRTY-ONE OF THIS ARTICLE. AMOUNTS DUE UNDER THIS SECTION SHALL BE PAID
4 BY MAY FIRST OF THE YEAR FOLLOWING THE CALENDAR YEAR IN WHICH A LOSS
5 RATIO REQUIREMENT WAS NOT SATISFIED. THE INSTRUCTIONS AND FORMAT FOR
6 CALCULATING AND REPORTING LOSS RATIOS SHALL BE THE SAME AS THOSE THAT
7 APPLY TO SECTION THREE THOUSAND TWO HUNDRED THIRTY-ONE OF THIS ARTICLE.
8 THE SUPERINTENDENT SHALL HAVE AUTHORITY TO AUDIT DATA, IMPOSE PENALTIES
9 FOR NONCOMPLIANCE WITH THIS SECTION CONSISTENT WITH AUTHORITY PROVIDED
10 TO THE SUPERINTENDENT IN OTHER PROVISIONS OF THIS CHAPTER, AND PROMUL-
11 GATE REGULATIONS TO IMPLEMENT THIS SECTION. SUCH SUMS SHALL BE DIRECTED
12 TO THE HEALTH CARE ACCESS PROTECTION FUND SET FORTH PURSUANT TO SECTION
13 NINETY-SEVEN-KKKK OF THE STATE FINANCE LAW. FOR THE PURPOSES OF THIS
14 SECTION, THE TERM "LOSS RATIO" SHALL MEAN ALL FUNDS EXPENDED DIRECTLY
15 FOR THE PURPOSES OF REIMBURSING MEDICAL CARE, INCLUDING CARE PROVIDED BY
16 PHYSICIANS AND OTHER HEALTH CARE PROFESSIONALS, HOSPITALS, NURSING
17 HOMES, HOME CARE, PRESCRIPTION DRUGS AND DURABLE MEDICAL EQUIPMENT,
18 PROVIDED TO INSUREDS COVERED UNDER AN INDIVIDUAL HEALTH INSURANCE POLICY
19 FORM, A SMALL GROUP HEALTH INSURANCE POLICY FORM OR A LARGE GROUP HEALTH
20 INSURANCE POLICY FORM, AS A PERCENTAGE OF REVENUE DERIVED BY SUCH INSUR-
21 ER FOR SUCH POLICY FORM.
22 S 5. The insurance law is amended by adding a new section 4328 to read
23 as follows:
24 S 4328. LOSS RATIO PAYMENT. BEGINNING IN CALENDAR YEAR TWO THOUSAND
25 NINE, IF THE LOSS RATIO FOR AN INDIVIDUAL DIRECT PAYMENT CONTRACT FORM,
26 A SMALL GROUP OR A SMALL GROUP REMITTANCE CONTRACT FORM OR A LARGE GROUP
27 CONTRACT FORM IS LESS THAN EIGHTY-SEVEN PERCENT, A CORPORATION SUBJECT
28 TO THE PROVISIONS OF THIS ARTICLE SHALL PAY TO THE COMMISSIONER OF
29 HEALTH OR SUCH COMMISSIONER'S DESIGNEE A PERCENT OF THE AGGREGATE PREMI-
30 UMS EARNED FOR THE CONTRACT FORM IN THE PREVIOUS CALENDAR YEAR EQUAL TO
31 THE DIFFERENCE BETWEEN THE MINIMUM LOSS RATIO FOR THE POLICY FORM AS
32 STATED IN THIS SECTION AND THE ACTUAL LOSS RATIO; PROVIDED, HOWEVER,
33 THAT SUCH AMOUNT SHALL BE OFFSET BY ANY AMOUNT REQUIRED TO BE RETURNED
34 TO CONTRACT HOLDERS IN ACCORDANCE WITH SECTION FOUR THOUSAND THREE
35 HUNDRED EIGHT OF THIS ARTICLE. AMOUNTS DUE UNDER THIS SECTION SHALL BE
36 PAID BY MAY FIRST OF THE YEAR FOLLOWING THE CALENDAR YEAR IN WHICH THE
37 LOSS RATIO REQUIREMENT WAS NOT SATISFIED. THE INSTRUCTIONS AND FORMAT
38 FOR CALCULATING AND REPORTING LOSS RATIOS SHALL BE THE SAME AS THOSE
39 THAT APPLY TO SECTION FOUR THOUSAND THREE HUNDRED EIGHT OF THIS ARTICLE.
40 THE SUPERINTENDENT SHALL HAVE AUTHORITY TO AUDIT DATA, IMPOSE PENALTIES
41 FOR NONCOMPLIANCE WITH THIS SECTION CONSISTENT WITH AUTHORITY PROVIDED
42 TO THE SUPERINTENDENT IN OTHER PROVISIONS OF THIS CHAPTER, AND PROMUL-
43 GATE REGULATIONS TO IMPLEMENT THIS SECTION. SUCH FUNDS SHALL BE DIRECTED
44 TO THE HEALTH CARE ACCESS PROTECTION FUND ESTABLISHED PURSUANT TO
45 SECTION NINETY-SEVEN-KKKK OF THE STATE FINANCE LAW. FOR THE PURPOSES OF
46 THIS SECTION, THE TERM "LOSS RATIO" SHALL MEAN ALL FUNDS EXPENDED
47 DIRECTLY FOR THE PURPOSES OF REIMBURSING MEDICAL CARE, INCLUDING CARE
48 PROVIDED BY PHYSICIANS AND OTHER HEALTH CARE PROFESSIONALS, HOSPITALS,
49 NURSING HOMES, HOME CARE, PRESCRIPTION DRUGS AND DURABLE MEDICAL EQUIP-
50 MENT, PROVIDED TO INSUREDS COVERED UNDER AN INDIVIDUAL DIRECT PAYMENT
51 CONTRACT FORM, A SMALL GROUP OR SMALL GROUP REMITTANCE CONTRACT FORM OR
52 A LARGE GROUP CONTRACT FORM, AS A PERCENTAGE OF REVENUE DERIVED BY SUCH
53 INSURER FOR SUCH POLICY FORM.
54 S 6. The insurance law is amended by adding a new section 3224-d to
55 read as follows:
A. 882 5
1 S 3224-D. PHYSICIAN REIMBURSEMENT. (A) IF THE SUPERINTENDENT APPROVES
2 AN INCREASE IN THE COST OF MEDICAL MALPRACTICE INSURANCE COVERAGE FOR
3 PHYSICIANS AND SURGEONS, BY SEPTEMBER FIRST OF EACH YEAR IN WHICH SUCH
4 INCREASE IS APPROVED, A HEALTH PLAN SHALL INCREASE ITS FEE SCHEDULE FOR
5 PHYSICIAN REIMBURSEMENT BY A PERCENTAGE EQUAL TO OR GREATER THAN A
6 PERCENTAGE AS DETERMINED BY THE SUPERINTENDENT TO BE THE INCREASE IN
7 PHYSICIAN OFFICE EXPENSE ALLOCABLE TO THE INCREASE IN THE COST OF A
8 MEDICAL MALPRACTICE INSURANCE POLICY APPROVED BY THE SUPERINTENDENT FOR
9 THE POLICY YEAR BEGINNING THE PREVIOUS JULY FIRST. THE SUPERINTENDENT
10 SHALL HAVE THE AUTHORITY TO ESTABLISH SEPARATE PERCENTAGES BASED UPON
11 REGION OR SPECIALTY OF PRACTICE.
12 (B) AN INSURER'S, ORGANIZATION'S OR CORPORATION'S PURPOSEFUL OR KNOW-
13 ING FAILURE TO INCLUDE SUCH INCREASE IN ITS FEE SCHEDULE FOR EACH PHYSI-
14 CIAN FOR THE CONTRACT CYCLE NEXT FOLLOWING OR FAILURE TO INCLUDE SUCH
15 INCREASE IN FUTURE REIMBURSEMENT FOR OUT OF NETWORK SERVICES WILL BE
16 ASSESSED A MONETARY PENALTY OF ONE MILLION DOLLARS FOR EACH AFFECTED
17 PHYSICIAN.
18 (C) NOTHING IN THIS SECTION SHALL BE CONSTRUED: (1) TO PREVENT A
19 HEALTH PLAN FROM INCREASING ITS FEE SCHEDULE IN A PERCENTAGE GREATER
20 THAN THE PERCENTAGE AS DETERMINED BY THE SUPERINTENDENT TO BE THE
21 INCREASE IN PHYSICIAN OFFICE EXPENSE ALLOCABLE TO THE INCREASE IN THE
22 COST OF A MEDICAL MALPRACTICE INSURANCE POLICY APPROVED BY THE SUPER-
23 INTENDENT FOR THE POLICY YEAR BEGINNING THE PREVIOUS JULY FIRST; OR
24 (2) TO REQUIRE THE IMPOSITION OF A DECREASE IN PHYSICIAN REIMBURSEMENT
25 AS A RESULT OF AN AVERAGE RATE DECREASE FOR MEDICAL MALPRACTICE INSUR-
26 ANCE COVERAGE APPROVED BY THE SUPERINTENDENT.
27 (D) FOR THE PURPOSES OF THIS SECTION, A "HEALTH PLAN" SHALL BE DEFINED
28 AS AN INSURER THAT IS LICENSED TO WRITE ACCIDENT AND HEALTH INSURANCE,
29 OR THAT IS LICENSED PURSUANT TO ARTICLE FORTY-THREE OF THIS CHAPTER OR
30 IS CERTIFIED PURSUANT TO ARTICLE FORTY-FOUR OF THE PUBLIC HEALTH LAW.
31 S 7. This act shall take effect immediately; provided that the amend-
32 ments to chapter 266 of the laws of 1986 made by section one of this act
33 shall apply to physician malpractice insurance policies issued on or
34 after July 1, 2011.
