Includes permissible payment methods, advance consent for direct payments, and annually providing the updated rate schedule as required terms for certain insurance contracts.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A9019
SPONSOR: Woerner
 
TITLE OF BILL:
An act to amend the insurance law, in relation to required terms for
certain insurance contracts
 
PURPOSE OR GENERAL IDEA OF BILL:
This bill requires insurers to include basic provisions in their
contracts with health care providers that will offer providers more
clarity and reliability concerning reimbursement issues.
 
SUMMARY OF PROVISIONS:
Section one amends paragraph 3 of subsection (e) of section 3217-b of
the insurance law to clarify an insurer's obligation to describe records
or information relied upon to calculate payments and adjustments made to
health care providers, including to provide dates of service, patient
identification numbers, identification of the services for which
payments are being made, and the reimbursement paid for each such
service. Section one also adds new paragraphs (3-a), (3-b) and (3-c) to
identify the methods of payment insurers may use to reimburse health
care providers, require insurers to make payments in full without encum-
brances, costs, charges or fees being assessed to the provider, require
insurers to receive advance written consent from health care providers
concerning the method of payment to be used, and direct insurers to
notify providers annually of the updated payment rate schedule applica-
ble to such provider, as well as the median rate paid by the insurer for
comparable services within the provider's service area. § 2 establishes
the effective date.
 
JUSTIFICATION:
Medical and dental practices are small businesses. Like other small
businesses, they must track revenues and expenses to make crucial deci-
sions concerning personnel management and overhead costs. Under current
law, there is a frequent lack of clarity and reliability in
insurer/provider relations. Standard contracts are not required to
include provisions that obligate insurers to notify providers annually
of the applicable reimbursement rate schedule, do not require insurers
to provide information that connects a particular payment to particular
services rendered, and do not mandate insurers to bear the cost of tran-
saction fees and other charges associated with the payment method used
to reimburse a provider. Such contractual ambiguities, paired with the
position of strength from which insurers typically negotiate provider
contracts, hobble health care providers when seeking to effectively
manage their businesses. By requiring insurers to include certain basic
contract provisions that give network providers valuable information,
this bill will support these small businesses in caring for their
patients while also helping them to survive and thrive in the communi-
ties they serve.
 
PRIOR LEGISLATIVE HISTORY:
New bill.
 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
None.
 
EFFECTIVE DATE:
This act shall take effect on the thirtieth day after it shall have
become a law and shall apply to all contracts entered into, renewed,
modified or amended on or after such effective date.
STATE OF NEW YORK
________________________________________________________________________
9019
IN ASSEMBLY
February 5, 2024
___________
Introduced by M. of A. WOERNER, THIELE, GLICK -- read once and referred
to the Committee on Insurance
AN ACT to amend the insurance law, in relation to required terms for
certain insurance contracts
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Paragraph 3 of subsection (e) of section 3217-b of the
2 insurance law, as added by chapter 586 of the laws of 1998, is amended
3 and three new subparagraphs 3-a, 3-b and 3-c are added to read as
4 follows:
5 (3) a description of the records or information relied upon to calcu-
6 late any such payments and adjustments, including the date of service,
7 patient identification number, an identification of the service for
8 which the payment is made, the reimbursement paid by the insurer for the
9 service, and a description of how the provider can access a summary of
10 such calculations and adjustments;
11 (3-a) the permissible payment methods as cash, check, direct deposit,
12 debit or credit card or online payment system, provided the health care
13 provider can access his or her payment in full, without encumbrances,
14 costs, charges, or fees, including a fee for replacement of a lost or
15 stolen check;
16 (3-b) the advance written consent of a provider to the insurer for the
17 method of payment and to directly pay or deposit payments in a bank or
18 other financial institution of the provider's choosing;
19 (3-c) the insurer's annual obligation, beginning on the effective date
20 of this paragraph and continuing every first of January thereafter, to
21 provide the health care provider with an updated payment rate schedule,
22 including a description of any services bundled within a single rate,
23 and the median rate paid by the insurer for comparable services within
24 the provider's service area;
25 § 2. This act shall take effect on the thirtieth day after it shall
26 have become a law and shall apply to all contracts entered into,
27 renewed, modified or amended on or after such effective date.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD14217-01-4