Lawsuit: Hochul Admin Cut Access to Medical Care of 1.2M N.Y. Workers, Retirees

A lawsuit alleges that New York Gov. Kathy Hochul's administration secretly slashed access to specialty doctors as well as potentially life-saving medical care for 1.2 million government workers and retirees, the New York Post reported.

Claims of the case laid out in the Albany Supreme Court accuse Hochul's administration of illegally bypassing state law when making changes to the Empire Health Plan, which serves local and state government employees.

The suit maintains that Acting Commissioner Rebecca Corso, as well as the state Department of Civil Service, who oversee the health insurance program for government workers, have cut reimbursement rates that "out of network" doctors can receive for providing services.

In an affidavit filed in the case, Wayne Joseph, President of the Bridge and Tunnel Officers' Benevolent Association, said that "some of my members, their families and millions of Empire Plan enrollees may be prevented from seeing physicians that they have treated with for years."

Joseph, who is named as one of the plaintiffs in the case, as well as 18 out-of-network doctors and medical practices, argued that the "unilateral action" was an illegal "life changing event" that was "never communicated" to the 1.2 million enrollees.

While the suit accuses Hochul officials of setting lower reimbursement rates for out-of-network doctors, the state officials argue they are complying with the law and are imposing cost controls to protect taxpayers and prevent doctors from price-gouging the program.

"The Empire Plan unilaterally determined itself no longer subject to New York insurance law or Department of Financial Services' regulation. Consequently, the Empire Plan considers itself no longer obligated to reimburse out-of-network physicians at the long-standing UCR [Usual, Customary and Reasonable] rates used in New York," said the plaintiffs' lawyer, Roy Breitenbach of Harris Beach.

"As a result, starting in 2022, Empire Plan unilaterally cut reimbursement to out-of-network physicians by more than 80%," the lawsuit states.

The suit claims that doctors can no longer file a complaint about a payment dispute or an appeal with state regulators.

"If these actions do not immediately cease," the suit adds, "thousands of high-quality, well-respected out of network physician practices that provide medically necessary surgical and specialty medical services to Plan enrollees will go out of business or drastically curtail their services.

"The current accessibility of quality medical care available to Empire Plan's 1.2 million enrollees will be severely impacted, and irreparably so for those patients that require such care now."

The suit goes on to add the cut in payments will impact emergency care at hospitals and "will cause Plan enrollees, and patients in this state as a whole, to lose access to life-saving emergency treatment."

The surprising change to the government health workers has left patients recently informed of it terrified about losing access to life-saving care.

"This will have a huge impact on me," Empire Health Plan member Kathleen Makridakis, 56, of Rockville Centre, said. "I had spinal cord surgery twice."

"They were only doctors out of network who could do the surgery," she added. "If I have to worry about these doctors getting paid, that screws me up. I can't afford owing a doctor a $100,000."

Despite some who are concerned the resulting changes to their healthcare plan could leave them out to dry, state officials argue that their actions are legal and reasonable.

Daniel Yanulavich, who works for the Department of Civil Services' Employee Benefits Division, says that the Empire Plan provides adequate patient protection and claims the real conflict is over out-of-network doctors wanting more money.

Yanulavich says out-of-network providers were getting an average of 540% of what Medicare pays doctors, and anesthesiologists were charging 3,000% more than what Medicare pays. He goes on to argue that it was time for the state to rein in the costs.

The state, Yanulavich says, must manage the Empire Plan "in a fiscally responsible manner" and "not be made to continue to subsidize these physician practices ... As a self-funded health plan, it is within the right of the Empire Plan to determine a reasonable reimbursement rate to out-of-network providers in the case of surprise bills."