Gov. Hochul is following the lead of predecessor Andrew Cuomo — siding with the powerful hospital lobby in a fight with health insurers and labor unions over medical billing payments.
Opponents — including United Federation of Teachers union president Mike Mulgrew — said the “pay and pursue” proposal backed by Hochul in her $227 billion spending plan would require health insurers to immediately pay hospital billing claims without reviewing whether the treatment was medically necessary.
The opponents argue the plan could hike costs and waste — and that it’s difficult to claw back a payout once the bills are paid if a procedure was considered unnecessary.
“What this proposal doesn’t take into account is the people who are paying the cost — and that’s us. That’s my members,” Mulgrew told The Post.
“The added costs are passed along to us. That is silly and that has got to stop.”
A group called the Protect Patient Coalition — which includes the health insurance industry and labor unions — is launching a TV ad attacking the plan and urging people to call Hochul’s office to stop it.
The six figure ad buy is largely bankrolled by the New York Public Health Plan Association and Blue Cross/Blue Shield.
But the coalition also includes other influential unions — including Local 32 BJ of the Services Employees International Union, the Teamsters , the New York State Business Council and National Federation of Independent Business.
“Hospital profits would increase — and so would the cost of your health care. Tell Gov. Hochul `pay and pursue’ is not for you,” declares the ad, which was obtained by The Post and includes the phone number for Hochul’s office.
The change in the billing law is included in Hochul’s spending plan; the final budget, to be negotiated with the legislature, is due April 1.
“The ‘Pay and Pursue’ proposal, which would require hospitals to be paid before submitting information to determine if the service is clinically appropriate and then force health plans to engage in a lengthy and cumbersome process to pursue refunds, will drive up costs for consumers, employers and taxpayers,” NY Health Plan Association president Eric Linzer said.
“Further, the proposal will make it more difficult to ensure that care is safe and effective for patients, and do nothing more than provide a financial windfall for hospitals.”
The legislature rejected Cuomo’s pro-hospital payment plan when he first proposed it in 2021. Hochul has revived it.
“The `Pay and Resolve’ bill included in the FY 24 Executive Budget will vastly increase administrative efficiency without resulting in any meaningful difference regarding payment of claims,” said state Health Department spokesman Cort Ruddy.
He said the legislation will require insurance plans to pay claims to hospitals for emergency admissions within a reasonable period of time after services are given. Insurers then have the right to challenge claims paid to the hospital that they believe were inappropriate because they weren’t medically necessary.
Ruddy said unions and self-insured plans are not included in the Pay and Resolve bill. Industry sources claimed union workers’ medical bills are covered.
The hospital industry applauded Hochul for taking its side and dismissed as overblown concerns raised by the insurers and unions.
“New York’s hospitals strongly support this commonsense provision and thank Governor Hochul for including it in her budget. There shouldn’t be anything controversial about paying hospitals on time for emergency services they’ve already provided, especially when these giant for-profit insurers are sitting on billions in profits,” said Brian Conway, spokesman for the Greater New York Hospital Association.
“And don’t be fooled by this misguided coalition’s ads. Health Insurers would still be able to challenge the medical necessity of any procedure and recoup costs if a challenge is found to have merit. This budget proposal does not change the outcome of good faith medical necessity disputes—it just ensures that hospitals are promptly paid for services already provided. Both the State Medicaid and Federal Medicare programs pay first and pursue medical necessity through audits after the fact—why not health insurance companies?”