senate Bill S5068

Amended

Requires health plans with coverage of out of plan medical services to provide certain information to insureds, subscribers and enrollees

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 03 / May / 2011
    • REFERRED TO HEALTH
  • 04 / Jan / 2012
    • REFERRED TO HEALTH
  • 05 / Jan / 2012
    • AMEND (T) AND RECOMMIT TO HEALTH
  • 05 / Jan / 2012
    • PRINT NUMBER 5068A
  • 10 / Jan / 2012
    • REPORTED AND COMMITTED TO INSURANCE

Summary

Requires health plans providing coverage for out-of-network care to provide certain information to insureds, subscribers and enrollees.

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Bill Details

Versions:
S5068
S5068A
Legislative Cycle:
2011-2012
Current Committee:
Senate Insurance
Law Section:
Public Health Law
Laws Affected:
Amd §4406, Pub Health L; amd §4322, Ins L

Sponsor Memo

BILL NUMBER:S5068

TITLE OF BILL:
An act
to amend the public health law and the insurance law, in relation to
prohibiting the approval of a health care plan which does not provide
coverage of out of network care

PURPOSE: OR GENERAL IDEA OF THE BILL:
To provide greater transparency and standardized disclosure of health
insurance companies' out of network payment policies so that patients
and employers can better understand the extent of their coverage.

SUMMARY OF SPECIFIC PROVISIONS:
Section 1 of the bill amends Section 4406 of the Public Health Law to
empower the Commissioner of Health and Superintendent of Insurance to
disapprove issuance of a health insurance policy offering coverage for
out of network care that will not provide significant coverage of the
usual costs of receiving care out of the plan's network. This section
would also require a health insurance company to disclose to its
subscribers and enrollees a description of its methodology for
reimbursing health care treatment by physicians not participating in the
plan's network, which shall be expressed as a percentage of the usual
cost of care provided by physicians not participating in the health
plan's network of providers (as determined by a nonprofit benchmarking
database known as FAIR Health). Moreover, this section would also
require a health insurance company to disclose to their enrollees upon
request the anticipated out of pocket costs for specific health care
services received on an out of network basis, which shall be based upon
the difference between the estimated actual cost of the service (as
determined by FAIR Health) and the health insurance company's out of
network reimbursement methodology.

Section 2 of the bill makes corresponding changes to Section 4322 of the
Insurance Law.

Section 3 of the bill provides for an August 1, 2011 effective date,

JUSTIFICATION:
Some consumers and employers choose to have health insurance policies
that permit them to receive care from a non-participating physician
because it permits them to see the health care provider of their choice.
However, this system has been fraught with problems. As a condition of
settlements with the Attorney General in 2009, several health insurance
companies agreed to discontinue the use of the flawed database for
determining payments when patients receive care outside of a plan's
network of physicians. Money was contributed toward creating a new
database to be maintained by a new unaffiliated non-profit organization,
called FAIR Health, Inc. The purpose of the database is to assure that
patients, employers and health insurers have accurate information
concerning the true cost of out-of-network medical services. The new
database should be operational for reporting medical charge data by the
middle of 2011. This development was applauded by the consumer and
provider community.

In the meantime, however, a number of insurers have changed their
methodology for covering out-of-network care to methodologies that


appear at first blush to cover costs adequately, but, in fact, often
result in severely inadequate coverage for patients. It is the intention
of this legislation to ensure that the new database developed as a
result of the Attorney General's 2009 investigation and report is
utilized as intended.

This legislation empowers the Commissioner of Health and Superintendent
of Insurance to disapprove issuance of a health insurance policy
offering coverage for out of network care that will not provide
significant coverage of the usual costs of receiving care out of the
plan's network. It would also better assure that health insurance
companies are informing their enrollees how their coverage policies for
out of network care compare to the actual cost of services. Finally, It
would better protect employers and patients from purchasing policies
that purport to, but in fact fail to, provide adequate coverage for out
of network care.

LEGISLATIVE HISTORY: New Bill

FISCAL IMPLICATIONS: None to State.

EFFECTIVE DATE: This act shall take effect August 1,
2011.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  5068

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                               May 3, 2011
                               ___________

Introduced  by  Sen.  HANNON -- read twice and ordered printed, and when
  printed to be committed to the Committee on Health

AN ACT to amend the public health law and the insurance law, in relation
  to prohibiting the approval of a  health  care  plan  which  does  not
  provide coverage of out of network care

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Paragraph (a) of subdivision  2  of  section  4406  of  the
public  health  law,  as  amended by chapter 504 of the laws of 1995, is
amended and two new paragraphs (j) and (k) are added to read as follows:
  (a) Upon approval of the commissioner, an organization  may  implement
an  out-of-plan  benefits  system that allows enrollees to use providers
not participating in the plan pursuant  to  a  contract,  employment  or
other  association.  The  commissioner,  in consultation with the super-
intendent, shall not approve an organization to implement an out-of-plan
benefits system unless the organization demonstrates that:
  (i) the requirements of this article and any  regulations  promulgated
thereunder have been met and will continue to be met;
  (ii)  it  can  establish and maintain a contingent reserve fund of not
less than two percent of the entire net premium income for the  calendar
year  of  the  organization  in addition to any other contingent reserve
fund required by the commissioner in regulations subject to the approval
of the superintendent; [and]
  (iii) it has established mechanisms to ensure and  monitor  compliance
with the provisions of paragraph (b) of this subdivision[.];
  (IV) THE OUT OF PLAN BENEFITS SYSTEM WILL PROVIDE SIGNIFICANT COVERAGE
OF THE USUAL COSTS OF OUT-OF-PLAN HEALTH SERVICES.
  (J)  AN  ORGANIZATION OFFERING AN OUT-OF-PLAN BENEFITS SYSTEM PURSUANT
TO THIS SUBDIVISION SHALL PROVIDE TO THEIR SUBSCRIBERS AND  ENROLLEES  A
DESCRIPTION  OF  ITS  METHODOLOGY  FOR REIMBURSING OUT-OF-PLAN BENEFITS,
WHICH  SHALL  BE  EXPRESSED  AS  A  PERCENTAGE  OF  THE  USUAL  COST  OF

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10981-01-1

S. 5068                             2

OUT-OF-PLAN HEALTH CARE SERVICES. SUCH ORGANIZATION SHALL INCLUDE WITHIN
THIS  DESCRIPTION  EXAMPLES  OF  ANTICIPATED  OUT  OF  POCKET  COSTS FOR
FREQUENTLY BILLED OUT-OF-PLAN HEALTH CARE SERVICES PROVIDED  BY  VARIOUS
PHYSICIAN  SPECIALISTS.  UPON  REQUEST OF AN ENROLLEE, SUCH ORGANIZATION
SHALL PROVIDE INFORMATION TO SUCH ENROLLEE  IN  WRITING  OR  THROUGH  AN
INTERNET  WEBSITE  THAT REASONABLY PERMITS THE ENROLLEE TO DETERMINE THE
ANTICIPATED OUT OF POCKET COSTS FOR A SPECIFIC OUT-OF-PLAN  HEALTH  CARE
SERVICE BASED UPON THE DIFFERENCE BETWEEN THE ORGANIZATION'S METHODOLOGY
FOR  REIMBURSING  OUT-OF-PLAN HEALTH CARE SERVICES AND THE USUAL COST OF
OUT-OF-PLAN HEALTH CARE SERVICES.
  (K) FOR THE PURPOSES OF THIS SUBDIVISION, "USUAL COST  OF  OUT-OF-PLAN
HEALTH  CARE SERVICES" SHALL MEAN THE EIGHTIETH PERCENTILE OF THE ACTUAL
CHARGES FOR A HEALTH CARE  SERVICE  PROVIDED  IN  THE  SAME  COUNTY  AND
PERFORMED  BY AN OUT-OF-PLAN PHYSICIAN IN THE SAME OR SIMILAR SPECIALTY,
AS REPORTED IN A BENCHMARKING DATABASE MAINTAINED BY A NONPROFIT  ORGAN-
IZATION  WITHOUT  AFFILIATION  WITH AN ORGANIZATION CERTIFIED UNDER THIS
ARTICLE OR AN INSURER LICENSED UNDER THE INSURANCE  LAW,  CREATED  AS  A
RESULT  OF  SETTLEMENTS  ENTERED  INTO DURING THE YEAR TWO THOUSAND NINE
BETWEEN THE DEPARTMENT OF LAW AND INDIVIDUAL HEALTH INSURANCE  ORGANIZA-
TIONS.
  S  2.  Section  4322  of  the insurance law is amended by adding a new
subsection (g-1) to read as follows:
  (G-1) A HEALTH MAINTENANCE ORGANIZATION ISSUED A CERTIFICATE  PURSUANT
TO  ARTICLE FORTY-FOUR OF THE PUBLIC HEALTH LAW OR A CORPORATION SUBJECT
TO THE PROVISIONS OF  THIS  ARTICLE  OFFERING  AN  OUT-OF-PLAN  BENEFITS
SYSTEM  PURSUANT  TO  THIS  SECTION  SHALL  PROVIDE  TO AN ENROLLEE OF A
CONTRACT A DESCRIPTION OF ITS METHODOLOGY  FOR  REIMBURSING  OUT-OF-PLAN
BENEFITS,  WHICH SHALL BE EXPRESSED AS A PERCENTAGE OF THE USUAL COST OF
OUT-OF-PLAN HEALTH CARE SERVICES. SUCH ORGANIZATION OR CORPORATION SHALL
INCLUDE WITHIN THIS DESCRIPTION EXAMPLES OF ANTICIPATED  OUT  OF  POCKET
COSTS FOR FREQUENTLY BILLED OUT-OF-PLAN HEALTH CARE SERVICES PROVIDED BY
VARIOUS  PHYSICIAN  SPECIALISTS.  UPON  REQUEST OF AN ENROLLEE OF SUCH A
CONTRACT, SUCH ORGANIZATION OR CORPORATION SHALL PROVIDE INFORMATION  TO
SUCH PURCHASER IN WRITING OR THROUGH AN INTERNET WEBSITE THAT REASONABLY
PERMITS  THE  ENROLLEE  TO DETERMINE THE ANTICIPATED OUT OF POCKET COSTS
FOR A SPECIFIC OUT-OF-PLAN HEALTH CARE SERVICE BASED UPON THE DIFFERENCE
BETWEEN  THE  ORGANIZATION'S  METHODOLOGY  FOR  REIMBURSING  OUT-OF-PLAN
HEALTH  CARE  SERVICES  AND  THE  USUAL  COST OF OUT-OF-PLAN HEALTH CARE
SERVICES.  FOR  THE  PURPOSES  OF  THIS  SUBDIVISION,  "USUAL  COST   OF
OUT-OF-PLAN HEALTH CARE SERVICES" SHALL MEAN THE EIGHTIETH PERCENTILE OF
THE ACTUAL CHARGES FOR A HEALTH CARE SERVICE PROVIDED IN THE SAME COUNTY
AND  PERFORMED  BY  AN  OUT-OF-PLAN  PHYSICIAN  IN  THE  SAME OR SIMILAR
SPECIALITY, AS REPORTED IN  A  BENCHMARKING  DATABASE  MAINTAINED  BY  A
NONPROFIT  ORGANIZATION  WITHOUT AFFILIATION WITH AN ORGANIZATION CERTI-
FIED UNDER ARTICLE FORTY-FOUR OF THE PUBLIC HEALTH  LAW  OR  CORPORATION
LICENSED  PURSUANT  TO  THIS ARTICLE, CREATED AS A RESULT OF SETTLEMENTS
ENTERED INTO DURING THE YEAR TWO THOUSAND NINE BETWEEN THE DEPARTMENT OF
LAW AND INDIVIDUAL HEALTH INSURANCE ORGANIZATIONS.
  S 3. This act shall take effect August 1, 2011.

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