A.6345/S.1470 – Limiting Copays for PT Services

This legislation, A.6345/S.1470, would limit the imposition of co-payments for physical therapy services to no more than a copayment for a primary care visit. The New York Health Plan Association (HPA) opposes this legislation because it interferes with health insurance plans’ processes for contracting with their providers.  This bill is also unnecessary in light of existing state and federal restrictions on permissible cost-sharing measures, and it will take away flexibility from health plans and employers in designing and managing affordable coverage options.

Health care networks are the foundation of health plans. Providing coverage through a network increases quality, enhances medical competency, and encourages greater coordination and collaboration by providers. In developing their networks, health plans make sure they have the variety of primary care doctors, specialists, hospitals, and other providers that consumers need and can access in an array of locations and settings. Health plans reimburse their contracted providers based on a negotiated fee schedule, with the patient’s cost-sharing responsibility — the amount of the copayment or coinsurance — factored into the fee schedule. Setting a limit on the amount of cost-sharing will affect the reimbursement calculations.

Physical therapy services aim to relieve a patient’s pain and help them rehab from injuries, and is often viewed as a means to avoid surgeries. Many plans classify PT providers as specialists, but they also strive to keep copayments and coinsurance for in-network providers reasonable — generally in the $25-$50 range. While the cost-sharing may be higher in some plan designs (i.e., “Bronze” and “High Deductible Health Plans”), the higher copayments are coupled with lower monthly premiums. Further, state and federal law require that all health insurance products offered to individuals and small businesses fit into narrow actuarial value ranges, meaning that the ratio of consumer costs to insurer costs is heavily regulated. The amount of out-of-pocket expenses a member may be subjected to depends on the metallic tier into which the particular member’s health plan falls.  Restrictions to the cost sharing can make a product’s benefits to the member richer, increasing the plan’s actuarial value and bringing it into a higher metallic tier, ultimately raising the premium cost for the consumer.

It is important to note that the premiums and all cost-sharing arrangements in individual and small group products are also reviewed and approved by the Department of Financial Services. Moreover, the Affordable Care Act and New York law have set annual maximum out-of-pocket costs. Once a consumer has met their out-of-pocket payment limit for a policy year, the plan is responsible for providing coverage for 100% of the “allowed amount” for covered in-network services for the remainder of that plan year.

Sponsors of the legislation say the bill is a consumer protection issue. In reality, this legislation is a provider protection bill that does little to help patients.

For these reasons, HPA opposes A.6345/S.1470.