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Legislative Memo

Lev Ginsburg
T 518.465.7511
www.bcnys.org

BILL:

S.5810 (Hannon) / A.8188(Lavine)

Support

SUBJECT:

Office-based surgery facility fee

 

DATE:

May 9, 2016

 

The Business Council opposes S.5810 (Hannon)/ A.8188 (Lavine), which would require health plans to pay a facility fee, in addition to fees for physicians, for procedures performed in office-based surgery facilities. This is yet another unfunded -- and unnecessary -- mandate which will drive up overall health insurance premiums to pay for this facility fee.

The significant advancements in medicine (both in equipment and treatment protocols) have allowed many procedures which were once solely performed in hospitals to now be performed in alternative settings including ambulatory surgery centers and physician's offices. These advancements have also offered one potential way to help reduce overall costs, as treatment is delivered safely in facilities held to far less rigorous standards than a typical hospital.

There are numerous reasons for cost differentials among hospitals, ambulatory care facilities and office-based surgery facilities. Most significant are the more comprehensive regulations required of hospitals on staffing and facilities. Current law requires "Article 28" facilities (facilities authorized under Article 28 of the Public Health Law) to be approved by the Department of Health after having gone through a rigorous Certificate of Need process. Hospitals and ambulatory surgery facilities must meet higher standards of operation and the Department of Health has full authority over Article 28 facilities. Physician private practices are not governed by either the Department of Health or the State Education Department -- except through professional misconduct proceedings and requirements of the state's existing office-based surgery law.

All businesses incur direct and indirect costs; office-based surgery facilities are no different. A physician or practice choosing to locate in a facility enters into a business arrangement with the owner for that space. Mandating a specific and separate facility fee is akin to a municipality imposing an occupancy tax on a hotel room -- it is nothing more than a "tax" paid to offset that physician's cost of doing business. Ultimately this proposed facility fee would be built into insurance premiums which continue their upward climb as mandates like this continue to layer on while not improving quality or care for New Yorkers.

No data is provided that would indicate OBS facilities are closing or that New Yorkers face a dearth of locations to access certain treatments in other than hospital-based settings. New Yorkers would benefit from health care mandate relief, rather than the addition of new mandates on health plans -- which ultimately are paid for by employers, employees or individuals accessing coverage in the commercial market.

For these reasons, The Business Council opposes S.5810 (Hannon) / A.8188(Lavine).