Relates to standards for prompt, fair and equitable settlement of claims for health care and payments for health care services; prohibits insurers from seeking refunds after 24 months; provides for civil fines for a finding of a pattern or practice of prohibited acts relating to payment of claims.
STATE OF NEW YORK
________________________________________________________________________
3167--A
2009-2010 Regular Sessions
IN ASSEMBLY
January 23, 2009
___________
Introduced by M. of A. BRADLEY, DelMONTE, GUNTHER, BENEDETTO, GOTTFRIED,
COLTON, JAFFEE, FIELDS, MAISEL, SCHIMEL -- Multi-Sponsored by -- M. of
A. BOYLAND, BRENNAN, CYMBROWITZ, HYER-SPENCER, MARKEY, PHEFFER, REIL-
LY, ROBINSON, SWEENEY, TITONE, TOWNS, WEISENBERG -- read once and
referred to the Committee on Insurance -- committee discharged, bill
amended, ordered reprinted as amended and recommitted to said commit-
tee
AN ACT to amend the insurance law, in relation to 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. Subsections (a) and (b) of section 3224-a of the insurance
2 law, as amended by chapter 666 of the laws of 1997, are amended to read
3 as follows:
4 (a) Except in a case where the obligation of an insurer or an organ-
5 ization or corporation licensed or certified pursuant to article forty-
6 three of this chapter or article forty-four of the public health law to
7 pay a claim submitted by a policyholder or person covered under such
8 policy or make a payment to a health care provider is not reasonably
9 clear, or when there is a reasonable basis supported by specific infor-
10 mation available for review by the superintendent that such claim or
11 bill for health care services rendered was submitted fraudulently, such
12 insurer or organization or corporation shall pay the claim to a policy-
13 holder or covered person or make a payment to a health care provider
14 within [forty-five] fifteen days of receipt of a claim or bill for
15 services rendered which is transmitted electronically or within thirty
16 days of receipt of a claim or bill for services rendered which is
17 submitted by other means, such as paper or facsimile. The insurer,
18 organization or corporation shall not deny payment for a claim for
19 medically necessary covered services on the basis of an administrative
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD03354-02-9
A. 3167--A 2
1 or technical defect including a failure to obtain a referral; untimely
2 filing of the claim; late notification of a hospital admission or the
3 provision of services that the insurer, organization or corporation may
4 require; a failure to provide notification of a hospital admission or
5 provision of services that the insurer, organization or corporation may
6 require; a failure to provide proper registration of a hospital admis-
7 sion or provision of services that the insurer, organization or corpo-
8 ration may require; a failure to request proper authorization of a
9 hospital admission or provision of services that the insurer, organiza-
10 tion or corporation may require; or any other administrative or techni-
11 cal defect as the superintendent may specify in a regulation after
12 consultation with the commissioner of health. Nothing in this section
13 shall preclude a health care provider and a health plan from agreeing to
14 provisions different from those in this section; provided, however, that
15 any agreement that purports to waive, limit, disclaim, or in any way
16 diminish the rights of a health care provider set forth in this section
17 shall be void as contrary to public policy.
18 (b) In a case where the obligation of an insurer or an organization or
19 corporation licensed or certified pursuant to article forty-three of
20 this chapter or article forty-four of the public health law to pay a
21 claim or make a payment for health care services rendered is not reason-
22 ably clear due to a good faith dispute regarding the eligibility of a
23 person for coverage, the liability of another insurer or corporation or
24 organization for all or part of the claim, the amount of the claim, the
25 benefits covered under a contract or agreement, or the manner in which
26 services were accessed or provided, an insurer or organization or corpo-
27 ration shall pay any undisputed portion of the claim in accordance with
28 this subsection and notify the policyholder, covered person [or] and
29 health care provider in writing within fifteen calendar days of the
30 receipt of the claim transmitted electronically, or thirty calendar days
31 of the receipt of the claim submitted by other means, such as paper or
32 facsimile:
33 (1) that it is not obligated to pay the claim or make the medical
34 payment, stating the specific reasons why it is not liable; or
35 (2) to request [all] additional information needed to determine
36 liability to pay the claim or make the health care payment; provided,
37 however, in response to its receipt of a specific claim for services an
38 insurer, organization or corporation shall not generate and transmit a
39 questionnaire in order to determine whether the policyholder or covered
40 person is covered for all or part of the claim by another insurer,
41 corporation or organization. Nothing in this section shall otherwise
42 preclude an insurer, organization or corporation from sending a coordi-
43 nation of benefit questionnaire to a policyholder or covered person at
44 another time provided that in no event shall the insurer, organization
45 or corporation delay or deny payment of a claim when a policyholder or
46 covered person does not complete and return such coordination of bene-
47 fits questionnaire.
48 Upon receipt of the information requested in paragraph two of this
49 subsection or an appeal of a claim or bill for health care services
50 denied pursuant to paragraph one of this subsection, an insurer or
51 organization or corporation licensed or certified pursuant to article
52 forty-three of this chapter or article forty-four of the public health
53 law shall comply with subsection (a) of this section.
54 § 2. Subsection (b) of section 3224-b of the insurance law, as added
55 by chapter 551 of the laws of 2006, is amended to read as follows:
A. 3167--A 3
1 (b) Overpayments to [physicians] health care providers. (1) Other than
2 recovery for duplicate payments, a health plan shall provide [thirty
3 days] written notice to [physicians before engaging in additional over-
4 payment recovery efforts seeking] health care providers of its intention
5 to seek recovery of the overpayment of claims to such [physicians]
6 health care providers. Such notice shall state the patient name, service
7 date, payment amount, proposed adjustment, and a reasonably specific
8 explanation of the proposed adjustment. A health plan shall not seek
9 recovery from a health care provider unless: the health care provider
10 agrees to the recovery in writing; the health care provider fails to
11 send its written challenge of the health plan's overpayment recovery
12 within ninety days of receipt of the plan's notice of intent to seek
13 overpayment recovery; or the overpayment recovery has been upheld
14 according to procedures established by the parties in their contractual
15 agreement; or a third-party arbitrator upheld the overpayment recovery.
16 (2) A health plan shall limit overpayment recovery efforts to: billing
17 and coding errors; incorrect rate payments; ineligibility of a person
18 for coverage; or fraud. A health plan shall not initiate overpayment
19 recovery efforts for utilization review purposes as defined in article
20 forty-nine of this chapter or article forty-nine of the public health
21 law, if the services were already deemed medically necessary by the
22 health plan, or if the health plan previously approved the manner in
23 which services were accessed or provided.
24 (3) A health plan shall provide a health care provider with the oppor-
25 tunity to challenge the health plan's overpayment recovery determination
26 and shall establish written policies and procedures, in accordance with
27 this section, for health care providers to challenge an overpayment
28 recovery. These written policies and procedures shall include a
29 provision stating that a health care provider shall have no less than
30 ninety days from receipt of the health plan's written notice of intent
31 to seek recovery to provide documentation challenging the alleged over-
32 payments. Any challenge to an overpayment recovery that cannot be
33 resolved between the health plan and the health care provider within
34 thirty days from the health plan's receipt of the provider's documenta-
35 tion shall be resolved according to procedures established by the
36 parties in their contractual agreement or shall be submitted to a third-
37 party arbitrator for a determination.
38 (4) A health plan shall not initiate overpayment recovery efforts more
39 than twenty-four months after the original payment was received by a
40 [physician] health care provider. [Provided, however, that] However, no
41 such time limit shall apply to overpayment recovery efforts [which] that
42 are: (i) based on a reasonable belief of fraud or other intentional
43 misconduct, [or abusive billing,] (ii) required by, or initiated at the
44 request of, a self-insured plan, or (iii) required by a state or federal
45 government program. Notwithstanding the aforementioned time limitations,
46 in the event that a [physician] health care provider asserts that a
47 health plan has underpaid a claim or claims, the health plan may defend
48 or set off such assertion of underpayment based on overpayments going
49 back in time as far as the claimed underpayment. [For purposes of this
50 paragraph, "abusive billing" shall be defined as a billing practice
51 which results in the submission of claims that are not consistent with
52 sound fiscal, business, or medical practices and at such frequency and
53 for such a period of time as to reflect a consistent course of conduct.
54 (3)] (5) Nothing in this section shall be deemed to limit [an insur-
55 er's] a health plan's right to pursue recovery of overpayments that
56 occurred prior to the effective date of this section where the insurer
A. 3167--A 4
1 has provided the [physician] health care provider with notice of such
2 recovery efforts prior to the effective date of this section.
3 (6) A health plan shall not pursue overpayment recovery efforts
4 against an insured if the health plan is precluded from pursuing over-
5 payment recovery efforts against a health care provider pursuant to
6 paragraph two of this subsection.
7 (7) A health plan shall assure adherence to the requirements stated in
8 this section by all contractors, subcontractors, subvendors, agents and
9 employees affiliated by contract or otherwise with such licensed entity.
10 All contractors, subcontractors, subvendors, agents and employees affil-
11 iated by contract or otherwise with any health plan shall also adhere to
12 the requirements of this section.
13 (8) Nothing in this section shall preclude a health care provider and
14 a health plan from agreeing to provisions different from those in this
15 section; provided, however, that any agreement that purports to waive,
16 limit, disclaim, or in any way diminish the rights of a health care
17 provider set forth in this section shall be void as contrary to public
18 policy.
19 (9) Health care provider shall mean an entity licensed or certified
20 pursuant to article twenty-eight, thirty-six or forty of the public
21 health law, a facility licensed pursuant to article nineteen, twenty-
22 three or thirty-one of the mental hygiene law, and a health care profes-
23 sional licensed, registered or certified pursuant to title eight of the
24 education law.
25 § 3. The insurance law is amended by adding a new section 3240 to read
26 as follows:
27 § 3240. Coverage of services of participating providers. An insurer
28 licensed to write accident and health insurance, a corporation organized
29 pursuant to article forty-three of this chapter, health maintenance
30 organizations and other organizations certified pursuant to article
31 forty-four of the public health law or a municipal cooperative health
32 benefits plan certified pursuant to article forty-seven of this chapter
33 (collectively a "health plan") that utilizes a network of participating
34 providers in the delivery and provision of health insurance benefits
35 shall not deem a health care provider who is participating in the health
36 plan's provider network and rendering medical services to an insured,
37 subscriber or enrollee to be out-of-network because one or more other
38 health providers rendering services to the insured, subscriber or enrol-
39 lee for the same or related medical condition, illness or injury does
40 not participate in the health plan's provider network. The insured,
41 subscriber or enrollee shall only be subject to the in-network cost
42 sharing provisions of the policy or certificate for the services of such
43 participating provider or providers. Further, the health plan shall pay
44 a participating health care provider or providers the contracted rate
45 for services provided by such participating provider or providers
46 regardless of the network status of the other providers. Health care
47 provider shall mean an entity licensed or certified pursuant to article
48 twenty-eight, thirty-six or forty of the public health law, a facility
49 licensed pursuant to article nineteen, twenty-three or thirty-one of the
50 mental hygiene law, and a health care professional licensed, registered
51 or certified pursuant to title eight of the education law.
52 § 4. Section 2406 of the insurance law is amended by adding a new
53 subsection (a-1) to read as follows:
54 (a-1) (1) If, after completion of an investigation involving informa-
55 tion collected from a six month period, notice and hearing, the super-
56 intendent finds that the person complained of has engaged in a series of
A. 3167--A 5
1 acts prohibited by section three thousand two hundred twenty-four-a of
2 this chapter that, taken together, constitute a consistent pattern or
3 practice, the superintendent is authorized to levy a civil penalty
4 against such person in the following manner:
5 (A) For the first finding of a consistent pattern or practice, the
6 superintendent may levy a fine of not more than one hundred thousand
7 dollars.
8 (B) For a second finding of a consistent pattern or practice that
9 occurs on or earlier than two years from the first offense the super-
10 intendent may levy a fine of not more than three hundred thousand
11 dollars.
12 (C) For a third finding of a consistent pattern or practice that
13 occurs on or earlier than five years after a first offense, the super-
14 intendent may levy a fine of not more than one million dollars.
15 (2) In determining the amount of a fine to be levied within the speci-
16 fied limits, the superintendent shall consider the following factors:
17 (A) the extent and frequency of the violations;
18 (B) whether the violations were due to circumstances beyond the insur-
19 er, organization or corporation's control;
20 (C) any remedial actions taken by the insurer, organization or corpo-
21 ration to prevent future violations;
22 (D) the actual or potential harm to others resulting from the
23 violations;
24 (E) if the insurer, organization or corporation knowingly and willing-
25 ly committed the violations;
26 (F) the insurer, organization or corporation's financial condition;
27 and
28 (G) any other factors the superintendent considers appropriate.
29 § 5. This act shall take effect immediately.