Relates to health care payment amounts

• Democratic8

◆ The sponsor's argument

Why Andrew Gounardes says this is needed

Our anti-trust and anti-monopoly laws are designed to foster competition and fairness in the marketplace. We only allow monopolies, such as util- ities, to exist under specific circumstances and with strict regu- lations. There are some companies which may not be technically a monopoly, but act in the same way as a monopoly and conduct their business in a way that will drive out competition and hurt consumers. This often happens when there is vertical integration by a large entity. Vertical inte- gration exists when a company controls its own supply chain in its industry. Vertical integration occurs in the medical insurance industry when an insurance company owns a health care provider, or a health care provider owns an insurance company. This bill would prohibit an insurance company from giving preferential treatment to health care providers which they own. It would also prohib- it an insurance company, which is owned by a health care provider, from giving preference to the health care provider which owns it. Specifically, this bill provides that an insurance company, which owns a health care provider, must pay any health provider it does not own an amount that is no less than the amount that it pays a health provider which it does own for a comparable service. Also, any insurance company, which is owned by a health care provider, may not pay any health care provider, which does not own the insurance company, an amount that is less than the amount it pays a health provid- er which it does own for a comparable service. There are reports from health care providers that insurance conglomerate United Health Care, which owns Optum, is engaging in such activities by paying health care providers which it owns a higher amount than it pays to other health care providers that it does not own. Optum is a large health care provider in the Hudson Valley having taken over two large health care providers, Crystal Run Health Care and Caremount Health Care. If competing health care providers are not paid on an equal basis, the health care provider, which is owned by the insurance company or owns an insurance company, has an unfair advantage which would likely lead to competing health care providers going out of business giving consumers (patients) even fewer choices in the marketplace. This lack of choice will eventually lead to higher prices paid by consumers, reduction in quality and availability of health care over time.

This is the sponsor's own case for the bill, quoted from their memorandum. It is not Agora's description of what the bill does.