Governor Cuomo’s Budget Includes Legislative Amendments to Urgent Care

February 10, 2014 | Health Services

Governor Cuomo recently announced his 2014-15 executive budget for New York State. The new budget contains some relevant legislative changes for healthcare within the State, including a pilot program for private business to partner with academic medical centers to own or operate hospitals, an expansion of office-based surgery (“OBS”), and expansion of urgent care services. 

This year’s executive budget contains noteworthy changes to healthcare statutes which will provide the opportunity to expand not just types of practices, but who can participate in them. For example, the bill proposes the creation of a pilot program in which business corporations can partner with academic medical centers to own or operate a hospital.  The corporations must be privately traded and have no more than 35 shareholders. Corporations that participate in this pilot program would also be allowed to own or operate a home health agency or hospice along with the hospital.  Approval must be given by the Department of Health in conjunction with the Public Health and Health Planning Council for corporations to participate in this program.  The pilot program will be evaluated by the Department of Health and reported to the governor and legislature after two years from the first established corporation.

Also included within the budget bills is an expansion of OBS which will both expand the number of procedures that fall under the umbrella of OBS as well as increase the regulatory requirements for it.  The proposed legislation would include in the definition of OBS procedures that require the use of neuraxial anesthesia and/or “major upper or lower extremity regional nerve blocks.”  The legislation also introduces “office-based anesthesia,” which it defines as the use of general anesthesia, neuraxial anesthesia, major upper or lower extremity regional nerve bocks, or moderate or deep sedation which is administered somewhere other than an Article 28 hospital. Any locations that provide either OBS or office-based anesthesia must now, in addition to receiving accreditation as previously required, register the practice with the Department of Health.

The Article VII Bill also enacts the legislative changes discussed in the Public Health and Health Planning Council report on urgent care finalized earlier this year.  To see our earlier alerts on the report, please click here.  Specifically, the legislation creates limited services clinics (aka “Retail Clinics”), which are small clinics placed in retail centers and pharmacies and provide limited physical evaluations and vaccinations.  Limited services clinics would exist as a subclass of diagnostic and treatment centers in the Public Health Law, and would be unique in their exemption from the corporate practice of medicine doctrine.  The legislation is written so as to specifically allow non-physicians to own and operate such clinics.  Practically, this would allow corporations like CVS or Walmart to own and operate the clinics in their own space.  Also from the report, urgent care clinics would receive a specific definition under the Public Health Law, and entities not fitting that description and receiving accreditation would be prohibited from using the term “urgent care” in their name or signage.

The introduction of these bills is just a step in the budget process.  Crafting the budget is a year-round activity for the state government.  The process begins with agencies creating their budget requests based on their current allotment and proposed programs. In early fall, the agencies submit their budget requests to the Division of Budget Review, which then reviews them and makes them into preliminary budget requests. By December, the Division of Budget Review presents projected revenues, expenditures, and budgets to the Governor; by January the Governor submits the final executive budget to the Legislature.  The Governor submits a number of documents, but most importantly he submits “Article VII Bills” (so named for the article of the state constitution that requires a balanced executive budget) which contain proposed legislative changes along with the budget requests. The 2014-15 fiscal year budget is currently at this stage.

After the executive budget is submitted, it goes to the Senate Finance Committee and the Assembly Ways and Means Committee for consideration, deliberation, and hearings. Over the next few months, the Committees work in conference, as well as with the Governor, to amend and finalize the budget bills. The budget then passes through the Legislature and is signed into the law by the Governor (or vetoed by him, which can be overridden by the Legislature) before the beginning of the State’s fiscal year begins on April 1st.  Between the original submission of the executive budget in January and the enactment of the final budget in the Spring, the legislation can change significantly, just as any law may be amended or stalled in legislative deliberation.

The proposed budget legislation still has some legislative hurdles to clear before it is passed into law, and the specifics of the various programs described here may change before it is finalized.  Additionally, the proposed statutes discussed above also call for regulations to be promulgated, so the precise nature of the programs and entities discussed remains to be completely seen until the regulations are issued.  As more information becomes available through this process, additional updates will follow.

Related Publications

Get legal updates and news delivered to your inbox