senate Bill S7071B

Relates to denial of health insurance claims

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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

  • 27 / Apr / 2012
    • REFERRED TO HEALTH
  • 22 / May / 2012
    • REPORTED AND COMMITTED TO FINANCE
  • 13 / Jun / 2012
    • AMEND (T) AND RECOMMIT TO FINANCE
  • 13 / Jun / 2012
    • PRINT NUMBER 7071A
  • 18 / Jun / 2012
    • AMEND (T) AND RECOMMIT TO FINANCE
  • 18 / Jun / 2012
    • PRINT NUMBER 7071B
  • 21 / Jun / 2012
    • COMMITTEE DISCHARGED AND COMMITTED TO RULES
  • 21 / Jun / 2012
    • ORDERED TO THIRD READING CAL.1474
  • 21 / Jun / 2012
    • SUBSTITUTED BY A9946B

Summary

Relates to denial of health insurance claims.

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Bill Details

See Assembly Version of this Bill:
A9946B
Versions:
S7071
S7071A
S7071B
Legislative Cycle:
2011-2012
Law Section:
Insurance Law
Laws Affected:
Amd §§3217-b, 4325 & 3224-a, Ins L; amd §4406-c, Pub Health L
Versions Introduced in 2011-2012 Legislative Cycle:
A9946B, S7071, S7071A, A9946B, S7071, S7071A

Sponsor Memo

BILL NUMBER:S7071B

TITLE OF BILL:
An act
to amend the insurance law and the public health law, in
relation to denial of claims

PURPOSE:
This bill amends the insurance law and the public health law in order
to address certain health plan practices and the changing marketplace.

SUMMARY OF PROVISIONS:
Section 1 amends section 3217-b of the insurance law by adding a new
subsection (j); section 2 amends section 4325 of the insurance law by
adding a new subdivision (k); and section 3 of the bill amends
section 4406-c of the public health law by adding a new subdivision
8. These amendments prevent insurers and health plans from denying
payment to a general hospital for a claim for medically necessary
inpatient services resulting from an emergency admission solely on
the basis that the hospital did not timely notify the insurer or plan
that the services had been provided.

Section 4 amends section 3224-a of the insurance law by adding a new
subsection (i) to prevent unilateral coding adjustments.

JUSTIFICATION:
This bill is intended to address certain health plan practices that
result in unilateral reductions of payments and claims denials. This
bill strikes a balance, as it preserves all health plan rights to
review medical necessity, utilization of services, and claims payment
processing but in a manner that provides fairness to providers as well
as a remedy.

Sections 1 through 3 of the bill address technical denials to prevent
insurers and health plans from denying payment to a hospital for a
claim for medically necessary inpatient services
resulting from an emergency admission solely on the basis that the
hospital did not timely notify the insurer or plan that the services
had been provided. Under this proposal, plans would be barred from
denying medically necessary claims for inpatient services resulting
from an emergency admission solely from a failure to notify. However,
hospitals and plans could agree to reductions in payment for such
claims for failure to timely notify as long as the reduction did not
exceed the lesser of $2,000 or 12% of the payment amount otherwise due.

Section 4 of the bill prevents insurers and plans from down coding
claims without reviewing a medical record. This would ensure that
coding adjustment is not applied to a claim to a lower reimbursement
level without the benefit of reviewing a medical record to assess the
severity of services that were provided to a patient. Under this
proposal, if a plan unilaterally down codes a claim, a provider would
have the light to resubmit the claim within 30 days with the related
medical record, which must be reviewed by the plan. The plan would be
required to reprocess the claim based on the coding that is supported
by the medical record and, if that results in an increase in payment,
pay an interest penalty on the amount of any increase if the insurer


or plan failed to meet the prompt pay timeframes when reprocessing
the claim.

LEGISLATIVE HISTORY:
New bill.

FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
This act shall take effect on July first, two thousand thirteen.

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

                                 7071--B

                            I N  S E N A T E

                             April 27, 2012
                               ___________

Introduced  by  Sens.  HANNON, LARKIN -- read twice and ordered printed,
  and when printed to  be  committed  to  the  Committee  on  Health  --
  reported  favorably from said committee and committed to the Committee
  on Finance -- committee discharged, bill amended, ordered reprinted as
  amended and recommitted to said  committee  --  committee  discharged,
  bill  amended,  ordered  reprinted  as amended and recommitted to said
  committee

AN ACT to amend the insurance law and the public health law, in relation
  to denial of claims

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

  Section 1.  Section 3217-b of the insurance law is amended by adding a
new subsection (j) to read as follows:
  (J) (1) AN INSURER SHALL NOT DENY PAYMENT TO A GENERAL HOSPITAL CERTI-
FIED  PURSUANT  TO  ARTICLE  TWENTY-EIGHT OF THE PUBLIC HEALTH LAW FOR A
CLAIM FOR MEDICALLY NECESSARY INPATIENT SERVICES RESULTING FROM AN EMER-
GENCY ADMISSION PROVIDED BY A GENERAL HOSPITAL SOLELY ON THE BASIS  THAT
THE  GENERAL  HOSPITAL  DID  NOT  TIMELY  NOTIFY  SUCH  INSURER THAT THE
SERVICES HAD BEEN PROVIDED.
  (2) NOTHING IN THIS SUBSECTION SHALL PRECLUDE A GENERAL  HOSPITAL  AND
AN  INSURER  FROM  AGREEING TO REQUIREMENTS FOR TIMELY NOTIFICATION THAT
MEDICALLY NECESSARY  INPATIENT  SERVICES  RESULTING  FROM  AN  EMERGENCY
ADMISSION HAVE BEEN PROVIDED AND TO REDUCTIONS IN PAYMENT FOR FAILURE TO
TIMELY  NOTIFY;  PROVIDED,  HOWEVER THAT: (I) ANY REQUIREMENT FOR TIMELY
NOTIFICATION MUST PROVIDE FOR A REASONABLE EXTENSION OF  TIMEFRAMES  FOR
NOTIFICATION  FOR  EMERGENCY  SERVICES  PROVIDED  ON WEEKENDS OR FEDERAL
HOLIDAYS, (II) ANY AGREED TO REDUCTION IN PAYMENT FOR FAILURE TO  TIMELY
NOTIFY  SHALL  NOT  EXCEED  THE LESSER OF TWO THOUSAND DOLLARS OR TWELVE
PERCENT OF THE PAYMENT AMOUNT OTHERWISE DUE FOR THE  SERVICES  PROVIDED,
AND (III) ANY AGREED TO REDUCTION IN PAYMENT FOR FAILURE TO TIMELY NOTI-
FY SHALL NOT BE IMPOSED IF THE PATIENT'S INSURANCE COVERAGE COULD NOT BE
DETERMINED  BY  THE  HOSPITAL  AFTER  REASONABLE EFFORTS AT THE TIME THE
INPATIENT SERVICES WERE PROVIDED.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD15258-07-2

S. 7071--B                          2

  S 2. Section 4325 of the insurance law is  amended  by  adding  a  new
subsection (k) to read as follows:
  (K)  (1)  A  CORPORATION  ORGANIZED  UNDER THIS ARTICLE SHALL NOT DENY
PAYMENT TO A GENERAL HOSPITAL CERTIFIED PURSUANT TO ARTICLE TWENTY-EIGHT
OF THE PUBLIC HEALTH LAW FOR A CLAIM FOR MEDICALLY  NECESSARY  INPATIENT
SERVICES  RESULTING  FROM  AN  EMERGENCY ADMISSION PROVIDED BY A GENERAL
HOSPITAL SOLELY ON THE BASIS THAT THE GENERAL HOSPITAL  DID  NOT  TIMELY
NOTIFY SUCH INSURER THAT THE SERVICES HAD BEEN PROVIDED.
  (2) NOTHING IN THIS SUBSECTION SHALL PRECLUDE A GENERAL HOSPITAL AND A
CORPORATION  FROM  AGREEING TO REQUIREMENTS FOR TIMELY NOTIFICATION THAT
MEDICALLY NECESSARY  INPATIENT  SERVICES  RESULTING  FROM  AN  EMERGENCY
ADMISSION HAVE BEEN PROVIDED AND TO REDUCTIONS IN PAYMENT FOR FAILURE TO
TIMELY  NOTIFY;  PROVIDED,  HOWEVER THAT: (I) ANY REQUIREMENT FOR TIMELY
NOTIFICATION MUST PROVIDE FOR A REASONABLE EXTENSION OF  TIMEFRAMES  FOR
NOTIFICATION  FOR  EMERGENCY  SERVICES  PROVIDED  ON WEEKENDS OR FEDERAL
HOLIDAYS, (II) ANY AGREED TO REDUCTION IN PAYMENT FOR FAILURE TO  TIMELY
NOTIFY  SHALL  NOT  EXCEED  THE LESSER OF TWO THOUSAND DOLLARS OR TWELVE
PERCENT OF THE PAYMENT AMOUNT OTHERWISE DUE FOR THE  SERVICES  PROVIDED,
AND (III) ANY AGREED TO REDUCTION IN PAYMENT SHALL NOT BE IMPOSED IF THE
PATIENT'S  INSURANCE  COVERAGE  COULD  NOT BE DETERMINED BY THE HOSPITAL
AFTER REASONABLE  EFFORTS  AT  THE  TIME  THE  INPATIENT  SERVICES  WERE
PROVIDED.
  S  3.  Section  4406-c of the public health law is amended by adding a
new subdivision 8 to read as follows:
  8. (A) A HEALTH CARE PLAN SHALL NOT DENY PAYMENT TO A GENERAL HOSPITAL
CERTIFIED PURSUANT TO ARTICLE TWENTY-EIGHT OF THIS CHAPTER FOR  A  CLAIM
FOR  MEDICALLY  NECESSARY INPATIENT SERVICES RESULTING FROM AN EMERGENCY
ADMISSION PROVIDED BY A GENERAL HOSPITAL SOLELY ON THE  BASIS  THAT  THE
GENERAL  HOSPITAL  DID  NOT TIMELY NOTIFY SUCH HEALTH CARE PLAN THAT THE
SERVICES HAD BEEN PROVIDED.
  (B) NOTHING IN THIS SUBDIVISION SHALL PRECLUDE A GENERAL HOSPITAL  AND
A HEALTH CARE PLAN FROM AGREEING TO REQUIREMENTS FOR TIMELY NOTIFICATION
THAT  MEDICALLY NECESSARY INPATIENT SERVICES RESULTING FROM AN EMERGENCY
ADMISSION HAVE BEEN PROVIDED AND TO REDUCTIONS IN PAYMENT FOR FAILURE TO
TIMELY NOTIFY; PROVIDED, HOWEVER THAT: (I) ANY  REQUIREMENT  FOR  TIMELY
NOTIFICATION  MUST  PROVIDE FOR A REASONABLE EXTENSION OF TIMEFRAMES FOR
NOTIFICATION FOR EMERGENCY SERVICES  PROVIDED  ON  WEEKENDS  OR  FEDERAL
HOLIDAYS,  (II) ANY AGREED TO REDUCTION IN PAYMENT FOR FAILURE TO TIMELY
NOTIFY SHALL NOT EXCEED THE LESSER OF TWO  THOUSAND  DOLLARS  OR  TWELVE
PERCENT  OF  THE  PAYMENT AMOUNT OTHERWISE DUE FOR THE SERVICE PROVIDED,
AND (III) ANY AGREED TO REDUCTION IN PAYMENT SHALL NOT BE IMPOSED IF THE
PATIENT'S COVERAGE COULD NOT BE DETERMINED BY THE HOSPITAL AFTER REASON-
ABLE EFFORTS AT THE TIME THE INPATIENT SERVICES WERE PROVIDED.
  S 4. Section 3224-a of the insurance law is amended by  adding  a  new
subsection (i) to read as follows:
  (I)  EXCEPT  WHERE  THE  PARTIES HAVE DEVELOPED A MUTUALLY AGREED UPON
PROCESS FOR THE RECONCILIATION OF CODING DISPUTES THAT INCLUDES A REVIEW
OF SUBMITTED  MEDICAL  RECORDS  TO  ASCERTAIN  THE  CORRECT  CODING  FOR
PAYMENT,  A  GENERAL HOSPITAL CERTIFIED PURSUANT TO ARTICLE TWENTY-EIGHT
OF THE PUBLIC HEALTH LAW SHALL, UPON RECEIPT OF PAYMENT OF A  CLAIM  FOR
WHICH  PAYMENT  HAS  BEEN  ADJUSTED  BASED  ON  A PARTICULAR CODING TO A
PATIENT INCLUDING THE ASSIGNMENT OF DIAGNOSIS AND  PROCEDURE,  HAVE  THE
OPPORTUNITY TO SUBMIT THE AFFECTED CLAIM WITH MEDICAL RECORDS SUPPORTING
THE HOSPITAL'S INITIAL CODING OF THE CLAIM WITHIN THIRTY DAYS OF RECEIPT
OF  PAYMENT.    UPON  RECEIPT  OF SUCH MEDICAL RECORDS, AN INSURER OR AN
ORGANIZATION OR CORPORATION LICENSED OR CERTIFIED  PURSUANT  TO  ARTICLE

S. 7071--B                          3

FORTY-THREE  OR FORTY-SEVEN OF THIS CHAPTER OR ARTICLE FORTY-FOUR OF THE
PUBLIC HEALTH LAW SHALL REVIEW SUCH INFORMATION TO ASCERTAIN THE CORRECT
CODING FOR PAYMENT AND PROCESS THE CLAIM IN ACCORDANCE  WITH  THE  TIME-
FRAMES  SET  FORTH  IN  SUBSECTION (A) OF THIS SECTION. IN THE EVENT THE
INSURER, ORGANIZATION, OR CORPORATION  PROCESSES  THE  CLAIM  CONSISTENT
WITH  ITS INITIAL DETERMINATION, SUCH DECISION SHALL BE ACCOMPANIED BY A
STATEMENT OF THE INSURER, ORGANIZATION OR CORPORATION SETTING FORTH  THE
SPECIFIC  REASONS WHY THE INITIAL ADJUSTMENT WAS APPROPRIATE.  AN INSUR-
ER, ORGANIZATION, OR CORPORATION THAT INCREASES THE PAYMENT BASED ON THE
INFORMATION SUBMITTED BY THE GENERAL HOSPITAL, BUT FAILS  TO  DO  SO  IN
ACCORDANCE  WITH  THE  TIMEFRAMES  SET  FORTH  IN SUBSECTION (A) OF THIS
SECTION, SHALL PAY TO THE GENERAL HOSPITAL INTEREST  ON  THE  AMOUNT  OF
SUCH  INCREASE  AT  THE  RATE  SET  BY  THE COMMISSIONER OF TAXATION AND
FINANCE FOR CORPORATE TAXES PURSUANT TO PARAGRAPH ONE OF SUBDIVISION (E)
OF SECTION ONE THOUSAND NINETY-SIX OF THE TAX LAW, TO BE  COMPUTED  FROM
THE  END  OF  THE  FORTY-FIVE DAY PERIOD AFTER RESUBMISSION OF THE ADDI-
TIONAL MEDICAL RECORD INFORMATION. PROVIDED, HOWEVER, A FAILURE TO REMIT
TIMELY PAYMENT SHALL NOT CONSTITUTE A VIOLATION OF THIS SECTION. NEITHER
THE INITIAL OR SUBSEQUENT PROCESSING OF THE CLAIM BY THE INSURER, ORGAN-
IZATION, OR CORPORATION SHALL BE  DEEMED  AN  ADVERSE  DETERMINATION  AS
DEFINED  IN  SECTION FOUR THOUSAND NINE HUNDRED OF THIS CHAPTER IF BASED
SOLELY ON A CODING DETERMINATION. NOTHING IN THIS SUBSECTION SHALL APPLY
TO THOSE INSTANCES IN WHICH THE INSURER OR ORGANIZATION, OR  CORPORATION
HAS A REASONABLE SUSPICION OF FRAUD OR ABUSE.
  S 5. This act shall take effect July 1, 2013.

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