Authorizes the imposition of penalties on subcontractors for failure to adhere to the standards for prompt, fair and equitable settlement of claims for health care and payments for health care services.
STATE OF NEW YORK
________________________________________________________________________
5323
2025-2026 Regular Sessions
IN SENATE
February 20, 2025
___________
Introduced by Sen. BAILEY -- read twice and ordered printed, and when
printed to be committed to the Committee on Insurance
AN ACT to amend the insurance law, in relation to penalties imposed on
subcontractors for failure to adhere to the standards for prompt, fair
and equitable settlement of claims for health care and payments for
health care services
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Paragraph 1 of subsection (c) of section 3224-a of the
2 insurance law, as amended by chapter 237 of the laws of 2009, is amended
3 to read as follows:
4 (1) Except as provided in paragraph two of this subsection, each claim
5 or bill for health care services processed in violation of this section
6 shall constitute a separate violation. In addition to the penalties
7 provided in this chapter, any insurer or organization or corporation
8 that fails to adhere to the standards contained in this section shall be
9 obligated to pay to the health care provider or person submitting the
10 claim, in full settlement of the claim or bill for health care services,
11 the amount of the claim or health care payment plus interest on the
12 amount of such claim or health care payment of the greater of the rate
13 equal to the rate set by the commissioner of taxation and finance for
14 corporate taxes pursuant to paragraph one of subsection (e) of section
15 one thousand ninety-six of the tax law or twelve percent per annum, to
16 be computed from the date the claim or health care payment was required
17 to be made. The superintendent shall be authorized to impose penalties
18 on subcontractors of an insurer or organization or corporation in addi-
19 tion to penalties imposed on the insurer or organization where it can be
20 reasonably demonstrated that the subcontractor was responsible for a
21 failure to adhere to the standards contained in this section. Further-
22 more, the superintendent shall be authorized to double the penalties
23 authorized under this chapter where it is demonstrated that the insurer
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD09811-01-5
S. 5323 2
1 or organization or corporation engaged in a pattern of failing to adhere
2 to the standards contained in this section. When the amount of interest
3 due on such a claim is less then two dollars, and insurer or organiza-
4 tion or corporation shall not be required to pay interest on such claim.
5 § 2. This act shall take effect on the ninetieth day after it shall
6 have become a law, and apply to all health care claims submitted after
7 such date. Effective immediately, the addition, amendment and/or repeal
8 of any rule or regulation necessary for the implementation of this act
9 on its effective date are authorized to be made and completed on or
10 before such effective date.
