June 23, 2021

Union kicks off statewide fight against secret health insurance contracts

ALBANY — When the 32BJ union health fund crunched the numbers on how much its…

ALBANY — When the 32BJ union health fund crunched the numbers on how much its members were paying for colonoscopies, knee replacements and baby deliveries, it was stunned to learn they were paying 358 percent more at New York Presbyterian hospital than those on Medicare policies.

Sara Rothstein is the director of the 32BJ health fund, which provides health insurance for 190,000 members and family members of the Service Employees International Union, Local 32BJ. Rothstein said the health fund analyzed costs for its members for some of the most common surgeries, finding that costs were exorbitantly inflated.

“That was sort of step one. We realized from the data that there was a problem,” she said.

That problem, the health fund came to believe, was anti-competitive language included in the secret contract agreements between New York Presbyterian and Empire Blue Cross Blue Shield, the insurance company that acts as an administrative middleman in 32BJ’s policy. The 32BJ health fund last week removed New York Presbyterian from its coverage network, a significant step against one of the most prestigious hospitals in the city.

New York Presbyterian did not immediately respond to an emailed request for comment Sunday. 

Because the confidential contracts between insurance companies and hospitals are just that — confidential — it’s impossible to know how widespread the practice is of adding anti-competitive language to drive up prices, so 32BJ’s findings could be an early indicator of a broader problem. But Rothstein and union leadership have come to believe that the health fund’s experience with New York Presbyterian could be a canary in the coal mine. 

“What we’re seeking to do in Albany is to prohibit the contract clauses that give hospitals an unfair negotiating advantage,” Rothstein said, which affects more than just 32BJ, but also other unions, private businesses and public employees. She noted that Empire Bluecross Blue Shield — 32BJ’s insurance administrator — is also the insurer of public employees for both the city and state. 

So the union is now pushing the Hospital Equity and Accountability Law, or HEAL Act. The bill was unveiled in a New York City press conference Sunday afternoon.

Because of the confidential deals, it’s unknown exactly how pervasive the anticompetitive language in the contracts is, Rothstein said, “but the best way to tell that they don’t (have it) is to pass the legislation we’re proposing.”

With less than a week remaining in the 2021 Legislative Session, advocates say the bill’s unveiling is only the start of a long fight to get the bill passed into law that is likely to extend into next year’s session. 

“Contracts can be very complicated, but let me make this simple: This is about who has the power, and it is not you right now. It is not the worker, it is not the union. It is the hospital and the insurance company,” Assemblywoman Catalina Cruz, a Queens Democrat, said at the event. 

The bill would bring increased accountability into the negotiations between hospitals and the insurance middlemen, with the goal of ending what advocates say are anti-competitive practices that drive up prices and ensure less services are available overall. The goal of the bill can be summed up with those pasted on a sign at the press conference: “It shouldn’t cost an arm and a leg to fix an arm and a leg.” 

“The problem is out of control hospital pricing by hospital systems that are providing services to New Yorkers, and obviously I’m talking on behalf of my members, we are laden with these high hospital costs,” said Kyle Bragg, the union president. “We don’t know how they’ve arrived at these prices. As they negotiate these contracts with the third party providers, with Blue Cross, we have no inclusion in that process. We’re not represented in the bargaining.”