senate Bill S1151

Enacts the automobile fraud prevention act of 2013

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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

  • 09 / Jan / 2013
    • REFERRED TO INSURANCE
  • 08 / Jan / 2014
    • REFERRED TO INSURANCE

Summary

Enacts the automobile fraud prevention act of 2013.

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Bill Details

Versions:
S1151
Legislative Cycle:
2013-2014
Current Committee:
Senate Insurance
Law Section:
Insurance Law
Laws Affected:
Amd §§5106, 5109, 5103, 5102, 3420 & 5202, Ins L
Versions Introduced in Previous Legislative Cycles:
2011-2012: S3444
2009-2010: S8414

Sponsor Memo

BILL NUMBER:S1151

TITLE OF BILL:

An act
to amend the insurance law, in relation to enacting the "automobile
insurance fraud prevention act of 2013"

PURPOSE OR GENERAL IDEA OF BILL:

To reform the automobile no-fault insurance system.

SUMMARY OF PROVISIONS:

Section 1. This act shall be known and may be cited as the
"automobile insurance fraud prevention act of 2013."

Section 2. Fair claims settlement. (2) The failure of an insurer to
issue a denial within 30 days of it becoming overdue shall not
preclude the insurer or self-insurer from presenting evidence to
establish that (A) the services or items billed for in a claim were
not provided; (B) certain portions of the charges for the charges for
services in a claim exceed, by more than ten percent, the charges
permissible under the fee schedules prepared and established pursuant
to subsections (a) and (b) of section five thousand one hundred eight
of this article, or (c) the event from which the claim arose was
based upon an intent to defraud an insurer or self-insurer Nothing
contained in this paragraph shall preclude an insurer from contesting
the existence of applicable insurance coverage for the loss claimed.

(3) An insurer may deny a claim on the basis of lack of medical
necessity not later than sixty days after the date upon which the
claim became overdue. However any denial of a claim which is based on
lack of medical necessity shall be based upon review by a licensed
provider who typically provides the health care service or treatment
under review. Copies of all reports prepared by a health care
provider who examines a claimant must provide the claimant with
copies of those reports within thirty days.

(c) (2) The commencement of a court proceeding or the submission of a
dispute to arbitration shall not preclude a claimant from electing to
submit other disputes arising from the same instance of use of
operation of a motor vehicle to the alternate forum.

(3) Requires arbitrators to follow and apply substantive law. A
master arbitrator, after having modified or vacated an award by an
arbitrator, shall offer the parties to opportunity to submit written
briefs. The
grounds for vacating or modifying an arbitrator's award by a master
arbitrator shall also include factual, legal and procedural errors.
(c) with respect to an action for serious personal injury, the award
of an arbitrator or master arbitrator, other than an award
pertaining to the existence of insurance coverage, shall not
constitute collateral estoppels of the issues arbitrated


(d) With respect to an arbitration or an action commenced in court
initiated to obtain payment for an overdue claim for medical benefits
prima facie entitlement to benefits shall be established by a
verification by the claimant setting forth that: (1) the claimant was
licensed to render the services or that the items were provided; (2)
the services were rendered or items supplied by the claimant. (3) the
services were medically necessary or for services or supplies
provided pursuant to a prescription, were properly supported by a
prescription: (4) the claimant received an assignment of benefits
from the injured party or the guardian or parent of the injured
party; (5) the claimant authorized the particular attorney or law
firm to commence the suit.

(e) With respect to an action commenced in court to obtain benefits
pursuant to this article: (1) a rebuttable presumption of
admissibility attaches to claims forms, denial of claim forms,
verification r'equests and responses, when such are accompanied by an
affidavit when such forms are business records according to rule
forty-five hundred eighteen of the CPLR.

(2) A rebuttable evidentiary presumption shall attach to the documents
referenced in paragraph one that such are valid.

(3) A rebuttable evidentiary presumption shall attach to the documents
referenced in paragraph one that were mailed to the address contained
thereon, on the date contained thereon.

(4) A rebuttable evidentiary presumption shall attach to proofs of
payment that such payments were made by the insurer and received by
the plaintiff.

(5) In matters where the insurer's denial is based upon an alleged
lack of medical necessity, a rebuttable presumption of admissibility
attaches to medical reports of the claimant's treating providers"

(6) Nothing in this section shall preclude a party from offering
evidence at trial to rebut any of the aforementioned prescriptions
nor will an insurer be precluded from offering evidence at trial on
any meritorious, non-precluded defense to payment of the benefits,

(7) The deposition of any person may be used by any party without the
necessity of showing unavailability or special circumstances, subject
to the right of any party pursuant to section 3103 of the CPLR to
prevent abuse, provided that the party against whom the evidence is
offered had been afforded the opportunity to participate and
questions the witness at the deposition.

§3. section 5109 of the insurance law, as added by chapter 423 of the
laws of 2005 is amended.

§5109. Unauthorized providers of health services The superintendent of
insurance shall be regulation, promulgate standards and procedures for
investigating and suspending or removing the authorization for
providers of health services to demand or request payment as
specified in paragraph one of subsection (a) of section 5102 of this
article. As used in this section "health services" means services,
supplies, therapies or other treatment specified in subparagraph (i),


(ii) or (iv) of paragraph one of subsection (a) of section 5102 of
this article.

(b) Following a hearing conducted pursuant to the procedure and
regulation promulgated puxsuant to this section, the superintendent
may prohibit a provider of health services from demanding or
requesting payment for health services under this article for a
period not exceeding three years if the superintendent determines,
after notice and hearing that the provider of health services: (1)
has admitted to or been found guilty of professional misconduct in
connection with health services rendered under Article 51; (2) has
exceeded the limits of his or her professional competence in
rendering medical care nnder this article or has knowingly made a
false statement or representation as to the material fact in any
medical report, (3) solicited or employed another person to solicit
for the provider or another person or entity, professional treatment,
examination or care of a person in coonection with any claim under
Article 51, (4) refused to appear before, or answer ony question upon
request of the superintendent, or refused to produce any relevant
information conceming the proVider's conduct in connection with
health services rendered under Article 51, (5) engaged in a pattern
of billing for, health services alleged to bave been re
ndered under Article 51 when the health services were not rendered,
provided that this shall not be construed to applY to good faith
disputes regarding the appropriateness of a particular coding to
describe a health care service, (6) utilized unlicensed person to
render health services under Article 51, (7) utilized licensed
persons to render health services, when rendering the health
services is beyond the authorized scope of a person's license, (8)
unlawfully ceded ownership, operation or control of a business
entity that provides health services to a person not licensed to
render the health services for which the entity is legally authorized
to provide, unless otherwise permitted by law, (9) committed a
fraudulent insurance act as defined in penal Law § 176.05, (10) has
been convicted of a crime involving fraudulent or dishonest
practices, (11) has, after waming by the superintendent, engaged in a
paerem of unlawfully attempting to collect payment directly hom tbe
patient or eligible person for services rendered under this article
when such attempts violate the terms of an enforceable assigument of
benefits.

(c) The superintendsnt shall by regulation develop due process
procedures to assure a health provider accused under this section has
appropriate notice, an opportunity for a fair hearing and appeal prior
to a determination that the health provider may not bill for services
under this section. A provider of health services shall not demand or
request payment for any health service under this article that are
rendered during the term of the prohibition ordered by the
superintendent pursuant to subsection (b) of this section The
prohibition ordered by the superintendent may be a defense in any
action by the provider of health services for payment for health
services rendered pursuant to this article at any time after such
provider has been prohibited from demanding or requesting payment for
such health services in connection with any claim under this article.

(d) Requires the Superintendent to maintain a database containing a
list of providers of health services that the Superintendent has


prohibited from demanding or requesting payment for health services
rendered under Article 51, and to make this information available to
the public.

(e) The Superintendent may levy a civil penalty not exceeding $50,000
on any provider of health services that the Superintendent prohibits
from demanding or requesting payment for health services pursuant to
Insurance Law §5(b) However, any civil penalty imposed for a
fraudulent insurance act must be levied pursuant to Article 4 of the
Insurance law" A determination of the Superintendent pursuant to
subsection (b) of this section shall not be binding upon the
commissioner of health or the commission of education in a
professional discipline proceeding relating to the same conduct.

§4. Subsection (d) of section 5102 of the insurance law, as amended by
chapter 955 of the laws of 19B4 is amended to add to the definition
of "serious injury" a complete tear or rupture of a nerve, tendon,
ligament, cartilage or muscle; a tear, rupture or impingement of a
nerve, tendon, ligament, cartilage or muscle which results in a
significant impairment of a body organ, member, function or system"

§5. Subsection (j) of section 3420 of the insurance law is amended by
adding a new paragraph 4.

(4) The term "covered person" as used in this article shall mean a
pedestrian injured through the use or operation of, or any owner,
operator or occupant of, a motor vehicle which has in effect the
financial security required by article six or eight of the vehicle
and traffic law or which is referred to in subdivision two of section
three hundred twenty-one of such law; or any other person entitled to
first party benefits, For the purpose of this article, "covered
person" shall also include any person injured as the result of a
staged, planned or intentional accident, provided that such person is
not a perpetrator of or a knowing participant in the staging or
planning of the accident.

§6. Section 5202 of the insurance law is amended by adding a new
subsection (m)

(m) The term "covered person" as used in this article shall mean a
pedestrian injured through the use or operation of, or any owner,
operator or' occupant of ,a motor vehicle which has in effect the
financial security required by article six or eight of the vehicle
and traffic law or which is referred to in subdivision two of section
three hundred twenty-one of such law; or any other person entitled
to first party benefits For the purpose of this article, "covered
person" shall also include any person injured as the result of a
staged, planned or intentional accident, provided that such person is
not a perpetrator of or a knowing participant in the staging or
planning of the accident.

§7. Effective Date.

JUSTIFICATION:

In the 1970's, it appeared as though no-fault automobile insurance was
a genuinely superior policy innovation that would displace convention


tort-based automobile insurance regimes. The central idea of a
no-fault system is that, rather than seek recovery against another
driver under conventional principles of tort law, an insured
automobile-accident victim could simply recover the costs of the
accident from his or her own insurance company. More than 30 years
later, no fault had lost much of its popularity among insurers and
consumer groups.

The State Insurance Department's Fraud Bureau has seen an increase in
the number of referrals alleging no-fault insurance fraud of
approximately ten percent each year since 2006. In 2009 alone, the
number of no-fault referrals accounted for 54 percent of all
referrals received by the Frauds Bureau and there is little doubt
that this trend will continue well into 2013. There is absolute
correlation between instances of fraud and increased automobile
insurance premiums and healthcare costs forced on consumers. These
abuses cost insurers tens to hundreds of millions of dollars, which
ultimately result in substantially increased premiums for New York I
s consumers.

This piece of legislation will combat fraud with two significant
changes to current law;

First, it will amend the Insurance Law with respect to preclusion of
insurance company defenses. Currently, an insurer that does not deny
a claim within 30-days is precluded from asserting a defense to
payment based on lack of medical necessity or other grounds,
including fraud, and must pay that claim. This encourages
unscrupulous individuals and providers to flood the system with
multiple claims, knowing claims not denied within 30-days will have
to be paid Investigations into fraud cases take much longer than
3D-days and often require additional time to determine the
appropriate course of action. Therefore, this legislation permits
the insurer to issue a denial and assert a defense after the 30-day
period.

Secondly, this bill would provide the Superintendent of Insurance
with the authority to terminate no-fault payments to deceitful
providers of medical care." For years, some professional service
corporations have abused the no-fault system by intentionally-staging
accidents and billing insurers for health services that were
unnecessary or never rendered. In some instances, individuals have
been known to actually purchase the names, signatures and licenses of
currently-licensed physicians in order to fraudulently bill the
insurers. Current law attempts to curb such abuses by requiring the
Department of Health and the State Education Department to
investigate providers who engage in misconduct. However,
implementation of this specific section is deemed to be too diffuse
to be effective, thus, in an effort to rein in this form of fraud,
this legislation would authorize the Superintendent of Insurance to
prohibit a provider from demanding or requesting payment for services
rendered under Article 51 for a period not exceeding 3-years if a
hearing determines that provider participated in illicit behavior.
This bill would not preclude the Commissioners of Health or
Education from taking appropriate action under any other provision of
law. Moreover, the Superintendent will maintain a database of these
individuals which will be publicly available.


Additionally, the process by which no-fault claims are tried civilly
results in exorbitant costs to taxpayers in the State of New York and
is cumbersome to claimants. This legislation would promote the use of
arbitration
in no-fault cases and require arbitrators to apply substantive
law, and would offer parties to arbitration the opportunity to submit
written briefs. In personal injury cases other than an award
pertaining to the issue of the existence of insurance coverage, the
arbitrator's award shall not constitute collateral estoppel of the
issue.

PRIOR LEGISLATIVE HISTORY:

2011/2012 - A.3787/S.3444 Remained in Senate and Assembly
Committees on Insurance
2009/2010 - A.11596 Referred to Insurance

FISCAL IMPLICATIONS:

None.

EFFECTIVE DATE:

This act shall take effect immediately; provided that: (a) section two
of this act shall apply to benefits initiated on or after the one
hundred eightieth day after this act shall have become a law (b)
sections three, six and seven of this act shall take effect on the
one hundred eightieth day after it shall become a law provided that
the superintendent of insurance shall immediately promulgate rules
and regulations pursuant to section 5109 of the insurance law as
amended by section three of this act and sections six and seven of
this act shall apply to all new policies and policies that are
renewed or modified after such one hundred eightieth day.

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

                                  1151

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 9, 2013
                               ___________

Introduced  by  Sen. BRESLIN -- 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 enacting the  "automo-
  bile insurance fraud prevention act of 2013"

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

  Section 1. This act shall be known and may be cited as the "automobile
insurance fraud prevention act of 2013".
  S 2. Section 5106 of the insurance law, subsection (b) as amended  and
subsection  (d)  as added by chapter 452 of the laws of 2005, is amended
to read as follows:
  S 5106. Fair claims settlement. (a) (1) Payments of first party  bene-
fits  and  additional  first party benefits shall be made as the loss is
incurred.  Such benefits are overdue if  not  paid  within  thirty  days
after  the  claimant  supplies  proof  of  the  fact  and amount of loss
sustained. If proof is not supplied as to the entire claim,  the  amount
which  is  supported  by proof is overdue if not paid within thirty days
after such proof is supplied. All overdue payments shall  bear  interest
at  the  rate  of two percent per month. If a valid claim or portion was
overdue, the claimant shall also be entitled to recover  his  attorney's
reasonable  fee,  for  services necessarily performed in connection with
securing payment of the overdue claim, subject to limitations promulgat-
ed by the superintendent in regulations.
  (2) THE FAILURE TO ISSUE A DENIAL OF A CLAIM WITHIN THIRTY DAYS  SHALL
NOT  PRECLUDE  THE  INSURER  OR SELF-INSURER FROM PRESENTING EVIDENCE TO
ESTABLISH THAT (A) THE SERVICES OR ITEMS BILLED FOR IN A CLAIM WERE  NOT
PROVIDED;  (B)  CERTAIN  PORTIONS OF THE CHARGES FOR SERVICES IN A CLAIM
EXCEED, BY MORE THAN TEN PERCENT, THE CHARGES PERMISSIBLE  UNDER  SCHED-
ULES  PREPARED  AND  ESTABLISHED  PURSUANT TO SUBSECTIONS (A) AND (B) OF
SECTION FIVE THOUSAND ONE HUNDRED EIGHT OF  THIS  ARTICLE,  OR  (C)  THE

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD01960-01-3

S. 1151                             2

EVENT  FROM WHICH THE CLAIM AROSE WAS BASED UPON AN INTENT TO DEFRAUD AN
INSURER OR SELF-INSURER.  NOTHING  CONTAINED  IN  THIS  PARAGRAPH  SHALL
PRECLUDE  AN  INSURER FROM CONTESTING THE EXISTENCE OF APPLICABLE INSUR-
ANCE COVERAGE FOR THE LOSS CLAIMED.
  (3) AN INSURER MAY DENY A CLAIM ON THE BASIS OF LACK OF MEDICAL NECES-
SITY  NOT  LATER  THAN  SIXTY  DAYS  AFTER THE DATE UPON WHICH THE CLAIM
BECAME OVERDUE. ANY DENIAL OF A CLAIM WHICH IS  BASED  UPON  A  LACK  OF
MEDICAL  NECESSITY SHALL BE BASED UPON REVIEW BY A LICENSED PROVIDER WHO
TYPICALLY DIAGNOSES AND  PROVIDES  TREATMENT  FOR  THE  CONDITION  UNDER
REVIEW, OR TYPICALLY PROVIDES THE HEALTH CARE SERVICE OR TREATMENT UNDER
REVIEW.  COPIES  OF  ALL  REPORTS PREPARED BY A HEALTH CARE PROVIDER WHO
EXAMINES A CLAIMANT AT THE REQUEST OF AN INSURER OR REVIEWS A CLAIM  FOR
MEDICAL  BENEFITS  AT THE REQUEST OF AN INSURER SHALL BE PROVIDED TO THE
CLAIMANT, THE CLAIMANT'S ATTORNEY AND  THE  CLAIMANT'S  TREATING  HEALTH
CARE PROVIDER WITHIN THIRTY BUSINESS DAYS OF SUCH EXAMINATION OR REVIEW.
  (b)  [Every  insurer shall provide a] (1) A claimant [with] SHALL HAVE
the option of submitting any dispute involving the  insurer's  liability
to  pay  first  party  benefits, or additional first party benefits, the
amount  thereof  or  any  other  matter  which  may  arise  pursuant  to
subsection  (a)  of  this  section to arbitration pursuant to simplified
procedures to be promulgated or approved  by  the  superintendent.  Such
simplified  procedures  shall  include  an expedited eligibility hearing
option, when required, to designate the insurer for first party benefits
pursuant to subsection [(d)] (F) of this section. The  expedited  eligi-
bility  hearing  option  shall be a forum for eligibility disputes only,
and shall not include the submission of any particular bill, payment  or
claim  for  any specific benefit for adjudication, nor shall it consider
any other defense to payment.
  [(c)] (2) THE COMMENCEMENT OF A COURT PROCEEDING OR THE SUBMISSION  OF
A  DISPUTE TO ARBITRATION SHALL NOT PRECLUDE A CLAIMANT FROM ELECTING TO
SUBMIT OTHER DISPUTES ARISING FROM THE SAME INSTANCE OF USE OR OPERATION
OF A MOTOR VEHICLE TO THE ALTERNATE FORUM. HOWEVER, WITH  THE  EXCEPTION
OF  A  PROCEEDING  BROUGHT PURSUANT TO ARTICLE SEVENTY-FIVE OF THE CIVIL
PRACTICE LAW AND RULES, A CLAIMANT MAY NOT SUBMIT  A  DISPUTE  REGARDING
THE SAME DENIAL TO MULTIPLE FORUMS.
  (3)  ARBITRATORS  ARE REQUIRED TO FOLLOW AND APPLY SUBSTANTIVE LAW. An
award by an arbitrator shall be binding except where vacated or modified
by a master arbitrator in accordance with simplified  procedures  to  be
promulgated  or  approved  by  the superintendent, WHICH SHALL OFFER THE
PARTIES THE OPPORTUNITY TO SUBMIT WRITTEN BRIEFS. The grounds for vacat-
ing or modifying an arbitrator's award by a master arbitrator shall  not
be limited to those grounds for review set forth in article seventy-five
of the civil practice law and rules AND SHALL INCLUDE FACTUAL, LEGAL AND
PROCEDURAL  ERRORS.    The award of a master arbitrator shall be binding
except for the grounds for review set forth in article  seventy-five  of
the  civil  practice  law and rules, and provided further that where the
amount of such master arbitrator's award is  five  thousand  dollars  or
greater,  exclusive  of interest and attorney's fees, the insurer or the
claimant may institute a court action to adjudicate the dispute de novo.
  [(d)] (C) WITH RESPECT TO AN ACTION FOR SERIOUS PERSONAL INJURY PURSU-
ANT TO SECTION FIVE THOUSAND ONE HUNDRED FOUR OF THIS ARTICLE, THE AWARD
OF AN ARBITRATOR OR MASTER ARBITRATOR RENDERED IN A  PROCEEDING  BROUGHT
PURSUANT TO THIS ARTICLE, OTHER THAN AN AWARD PERTAINING TO THE ISSUE OF
THE  EXISTENCE  OF  INSURANCE  COVERAGE, SHALL NOT CONSTITUTE COLLATERAL
ESTOPPEL OF THE ISSUES ARBITRATED.

S. 1151                             3

  (D) WITH RESPECT TO AN ARBITRATION OR AN ACTION COMMENCED IN  A  COURT
OF  COMPETENT  JURISDICTION  INITIATED  TO  OBTAIN PAYMENT OF AN OVERDUE
CLAIM FOR THE PAYMENT OF MEDICAL BENEFITS  PRIMA  FACIE  ENTITLEMENT  TO
BENEFITS  SHALL  BE ESTABLISHED BY FILING A VERIFICATION BY THE CLAIMANT
WITH THE ARBITRATION DEMAND OR COMPLAINT, SETTING FORTH THAT:
  (1)  THE  CLAIMANT  WAS  LICENSED  TO RENDER THE SERVICES OR THE ITEMS
PROVIDED AT THE TIME THEY WERE PROVIDED;
  (2) THE SERVICES WERE RENDERED OR ITEMS SUPPLIED BY THE CLAIMANT;
  (3) THE SERVICES OR ITEMS WERE MEDICALLY NECESSARY, OR,  FOR  SERVICES
OR  SUPPLIES  PROVIDED PURSUANT TO PRESCRIPTION, THAT SUCH WERE PROPERLY
SUPPORTED BY A PRESCRIPTION;
  (4) THE CLAIMANT RECEIVED AN ASSIGNMENT OF BENEFITS FROM  THE  INJURED
PARTY OR THE GUARDIAN OR PARENT OF THE INJURED PARTY; AND
  (5)  THE  CLAIMANT  AUTHORIZED  THE PARTICULAR ATTORNEY OR LAW FIRM TO
COMMENCE THE SUIT.
  (E) WITH RESPECT TO AN ACTION COMMENCED IN A COURT OF COMPETENT JURIS-
DICTION TO OBTAIN BENEFITS PURSUANT TO THIS ARTICLE:
  (1) A REBUTTABLE  PRESUMPTION  OF  ADMISSIBILITY  ATTACHES  TO  CLAIMS
FORMS, DENIAL OF CLAIMS FORMS, VERIFICATION REQUESTS AND RESPONSES THER-
ETO,  WHEN  SUCH  ARE ACCOMPANIED BY AN AFFIDAVIT ESTABLISHING THAT SUCH
FORMS ARE BUSINESS RECORDS PURSUANT TO RULE FORTY-FIVE HUNDRED  EIGHTEEN
OF THE CIVIL PRACTICE LAW AND RULES.
  (2)  A  REBUTTABLE  EVIDENTIARY PRESUMPTION SHALL ATTACH TO SUCH DOCU-
MENTS REFERENCED IN PARAGRAPH ONE  OF  THIS  SUBSECTION  THAT  SUCH  ARE
VALID.
  (3)  A  REBUTTABLE  EVIDENTIARY PRESUMPTION SHALL ATTACH TO SUCH DOCU-
MENTS REFERENCED IN PARAGRAPH ONE OF  THIS  SUBSECTION  THAT  SUCH  WERE
MAILED TO THE ADDRESS CONTAINED THEREON, ON THE DATE CONTAINED THEREON.
  (4)  A  REBUTTABLE  EVIDENTIARY  PRESUMPTION SHALL ATTACH TO PROOFS OF
PAYMENT THAT SUCH PAYMENTS WERE MADE BY THE INSURER AND RECEIVED BY  THE
PLAINTIFF.
  (5)  IN  MATTERS  WHERE  THE INSURER'S DENIAL IS BASED UPON AN ALLEGED
LACK OF MEDICAL NECESSITY, A  REBUTTABLE  PRESUMPTION  OF  ADMISSIBILITY
ATTACHES TO MEDICAL REPORTS OF THE CLAIMANT'S TREATING PROVIDERS.
  (6)  NOTHING  CONTAINED IN THIS SUBSECTION SHALL PRECLUDE A PARTY FROM
OFFERING EVIDENCE AT TRIAL TO REBUT ANY PRESUMPTION IN THIS  SUBSECTION,
NOR  TO PRECLUDE AN INSURER FROM OFFERING EVIDENCE AT TRIAL ON ANY MERI-
TORIOUS, NON-PRECLUDED DEFENSE TO PAYMENT OF THE BENEFITS.
  (7) THE DEPOSITION OF ANY PERSON MAY BE USED BY ANY PARTY WITHOUT  THE
NECESSITY OF SHOWING UNAVAILABILITY OR SPECIAL CIRCUMSTANCES, SUBJECT TO
THE  RIGHT  OF  ANY PARTY TO MOVE PURSUANT TO SECTION THIRTY-ONE HUNDRED
THREE OF THE CIVIL PRACTICE LAW AND RULES  TO  PREVENT  ABUSE,  PROVIDED
THAT THE PARTY AGAINST WHOM THE EVIDENCE IS OFFERED HAD BEEN AFFORDED AN
OPPORTUNITY TO PARTICIPATE AND QUESTION THE WITNESS AT THE DEPOSITION.
  (F)  Where  there  is reasonable belief more than one insurer would be
the source of first party benefits, the insurers may agree  among  them-
selves, if there is a valid basis therefor, that one of them will accept
and  pay  the  claim  initially. If there is no such agreement, then the
first insurer to whom notice of claim is given shall be responsible  for
payment. Any such dispute shall be resolved in accordance with the arbi-
tration  procedures  established  pursuant  to section five thousand one
hundred five of this article and regulation as promulgated by the super-
intendent, and any insurer paying first-party benefits  shall  be  reim-
bursed  by  other insurers for their proportionate share of the costs of
the claim and the allocated expenses of processing the claim, in accord-
ance with the provisions entitled "other coverage"  contained  in  regu-

S. 1151                             4

lation  and  the provisions entitled "other sources of first-party bene-
fits" contained in regulation. If there is no such insurer and the motor
vehicle accident occurs in this state, then an applicant who is a quali-
fied person as defined in article fifty-two of this chapter shall insti-
tute  the  claim  against  motor vehicle accident indemnification corpo-
ration.
  S 3. Section 5109 of the insurance law, as added by chapter 423 of the
laws of 2005, is amended to read as follows:
  S 5109. Unauthorized providers of health services. (a) The superinten-
dent[, in consultation with the commissioner of health and  the  commis-
sioner  of  education,]  shall  by  regulation, promulgate standards and
procedures for investigating and suspending  or  removing  the  authori-
zation for providers of health services to demand or request payment for
health  services  as  specified  in  paragraph  one of subsection (a) of
section five thousand one hundred two  of  this  article  upon  findings
reached  after  investigation pursuant to this section. Such regulations
shall ensure the same or greater due process provisions, [including] AND
INCLUDE notice and opportunity to be heard, as those afforded physicians
investigated under article two of  the  workers'  compensation  law  and
shall  include  provision for notice to all providers of health services
of the provisions of this section and regulations promulgated thereunder
at least ninety days in advance of the  effective  date  of  such  regu-
lations.    AS  USED  IN THIS SECTION, "HEALTH SERVICES" MEANS SERVICES,
SUPPLIES, THERAPIES OR OTHER TREATMENT AS SPECIFIED IN SUBPARAGRAPH (I),
(II) OR (IV) OF PARAGRAPH ONE OF SUBSECTION (A) OF SECTION FIVE THOUSAND
ONE HUNDRED TWO OF THIS ARTICLE.
  (b) [The commissioner of health  and  the  commissioner  of  education
shall  provide  a  list of the names of all providers of health services
who the commissioner of health and the commissioner of  education  shall
deem,  after  reasonable  investigation,  not  authorized  to  demand or
request any payment for medical services in connection  with  any  claim
under  this article because such] FOLLOWING THE HEARING CONDUCTED PURSU-
ANT TO THE  PROCEDURES  AND  REGULATION  PROMULGATED  PURSUANT  TO  THIS
SECTION,  THE  SUPERINTENDENT MAY PROHIBIT A PROVIDER OF HEALTH SERVICES
FROM DEMANDING OR REQUESTING PAYMENT FOR  HEALTH  SERVICES  SUBSEQUENTLY
RENDERED  UNDER THIS ARTICLE, FOR A PERIOD NOT EXCEEDING THREE YEARS, IF
THE SUPERINTENDENT  DETERMINES,  AFTER  NOTICE  AND  HEARING,  THAT  THE
provider of health services:
  (1)  has ADMITTED TO, OR been FOUND guilty of, professional [or other]
misconduct [or incompetency],  AS  DEFINED  IN  THE  EDUCATION  LAW,  in
connection  with  [medical] HEALTH services rendered under this article;
or
  (2) has exceeded the limits of his or her professional  competence  in
rendering  medical care under this article or has knowingly made a false
statement or representation as to a material fact in any medical  report
made in connection with any claim under this article; or
  (3)  solicited,  or  has  employed  another  to solicit for himself or
herself or for another, professional treatment, examination or  care  of
an injured person in connection with any claim under this article; or
  (4)  has  refused  to appear before, or to answer upon request of, the
[commissioner of health, the] superintendent[,] or any  duly  authorized
officer  of  the  state,  any  legal question, or REFUSED to produce any
relevant information concerning [his or her] THE conduct OF THE PROVIDER
OF  HEALTH  SERVICES  in  connection  with  [rendering  medical]  HEALTH
services RENDERED under this article; or

S. 1151                             5

  (5)  has  engaged  in  [patterns]  A  PATTERN  of  billing for: HEALTH
services [which were not provided.] ALLEGED TO HAVE BEEN RENDERED  UNDER
THIS  ARTICLE, WHEN THE HEALTH SERVICES WERE NOT RENDERED, PROVIDED THAT
THIS SHALL NOT BE CONSTRUED TO APPLY TO GOOD  FAITH  DISPUTES  REGARDING
THE  APPROPRIATENESS  OF  A  PARTICULAR CODING TO DESCRIBE A HEALTH CARE
SERVICE; OR
  (6) UTILIZED UNLICENSED PERSONS TO RENDER HEALTH SERVICES  UNDER  THIS
ARTICLE, WHEN ONLY A PERSON LICENSED IN THIS STATE MAY RENDER THE HEALTH
SERVICES; OR
  (7)  UTILIZED  LICENSED  PERSONS  TO RENDER HEALTH SERVICES UNDER THIS
ARTICLE, WHEN RENDERING THE HEALTH SERVICES  IS  BEYOND  THE  AUTHORIZED
SCOPE OF THE LICENSE OF SUCH PERSON; OR
  (8)  UNLAWFULLY  CEDED  OWNERSHIP,  OPERATION OR CONTROL OF A BUSINESS
ENTITY AUTHORIZED TO PROVIDE PROFESSIONAL HEALTH SERVICES IN THIS STATE,
INCLUDING BUT NOT LIMITED TO A PROFESSIONAL SERVICE CORPORATION, PROFES-
SIONAL LIMITED LIABILITY COMPANY OR REGISTERED LIMITED  LIABILITY  PART-
NERSHIP,  TO  A  PERSON NOT LICENSED TO RENDER THE HEALTH SERVICES WHICH
THE ENTITY IS LEGALLY AUTHORIZED TO PROVIDE; OR
  (9) COMMITTED A FRAUDULENT INSURANCE ACT AS DEFINED IN SECTION  176.05
OF THE PENAL LAW; OR
  (10)  HAS  BEEN CONVICTED OF A CRIME INVOLVING FRAUDULENT OR DISHONEST
PRACTICES; OR
  (11) HAS, AFTER WARNING BY THE SUPERINTENDENT, ENGAGED IN A PATTERN OF
UNLAWFULLY ATTEMPTING TO COLLECT PAYMENT DIRECTLY FROM  THE  PATIENT  OR
ELIGIBLE  PERSON  FOR  SERVICES  RENDERED  UNDER  THIS ARTICLE WHEN SUCH
ATTEMPTS VIOLATE THE TERMS OF AN ENFORCEABLE ASSIGNMENT OF BENEFITS.
  (c) [Providers] THE SUPERINTENDENT SHALL  BY  REGULATION  DEVELOP  DUE
PROCESS  PROCEDURES  TO  ASSURE  A  HEALTH  PROVIDER  ACCUSED UNDER THIS
SECTION HAS APPROPRIATE NOTICE, AN OPPORTUNITY FOR A  FAIR  HEARING  AND
APPEAL  PRIOR  TO  A DETERMINATION THAT THE HEALTH PROVIDER MAY NOT BILL
FOR SERVICES UNDER THIS SECTION. A PROVIDER  of  health  services  shall
[refrain  from  subsequently  treating  for  remuneration,  as a private
patient, any person seeking medical treatment]  NOT  DEMAND  OR  REQUEST
PAYMENT  FOR  ANY  HEALTH  SERVICES under this article [if such provider
pursuant to this section has been prohibited from demanding or  request-
ing  any  payment  for  medical  services under this article. An injured
claimant so treated or examined may raise this  as]  THAT  ARE  RENDERED
DURING  THE TERM OF THE PROHIBITION ORDERED BY THE SUPERINTENDENT PURSU-
ANT TO SUBSECTION (B) OF THIS SECTION. THE PROHIBITION  ORDERED  BY  THE
SUPERINTENDENT  MAY BE a defense in any action by [such] THE provider OF
HEALTH SERVICES for payment for  [treatment]  HEALTH  SERVICES  rendered
PURSUANT  TO  THIS  ARTICLE  at  any  time  after such provider has been
prohibited from demanding  or  requesting  payment  for  [medical]  SUCH
HEALTH services in connection with any claim under this article.
  (d)  The  [commissioner  of  health and the commissioner of education]
SUPERINTENDENT shall maintain and regularly update a database containing
a list of providers of health services prohibited by this  section  from
demanding  or requesting any payment [for health services connected to a
claim] RENDERED under this article and shall make [such] THE information
available to the public [by means of  a  website  and  by  a  toll  free
number].
  (e)  THE  SUPERINTENDENT  MAY LEVY A CIVIL PENALTY NOT EXCEEDING FIFTY
THOUSAND DOLLARS ON ANY PROVIDER OF HEALTH SERVICES THAT THE SUPERINTEN-
DENT PROHIBITS FROM DEMANDING OR REQUESTING PAYMENT FOR HEALTH  SERVICES
PURSUANT  TO  SUBSECTION  (B) OF THIS SECTION. ANY CIVIL PENALTY IMPOSED

S. 1151                             6

FOR A FRAUDULENT INSURANCE ACT, AS DEFINED  IN  SECTION  176.05  OF  THE
PENAL LAW, SHALL BE LEVIED PURSUANT TO ARTICLE FOUR OF THIS CHAPTER.
  (F)  Nothing  in  this  section  shall be construed as limiting in any
respect the powers and duties of the commissioner of health, commission-
er of education  or  the  superintendent  to  investigate  instances  of
misconduct  by  a  [health care] provider [and, after a hearing and upon
written notice to the provider, to temporarily prohibit  a  provider  of
health  services  under  such investigation from demanding or requesting
any payment for medical services under this article  for  up  to  ninety
days from the date of such notice] OF HEALTH SERVICES AND TAKE APPROPRI-
ATE  ACTION  PURSUANT  TO ANY OTHER PROVISION OF LAW. A DETERMINATION OF
THE SUPERINTENDENT PURSUANT TO SUBSECTION (B) OF THIS SECTION SHALL  NOT
BE BINDING UPON THE COMMISSIONER OF HEALTH OR THE COMMISSIONER OF EDUCA-
TION  IN  A  PROFESSIONAL  DISCIPLINE  PROCEEDING  RELATING  TO THE SAME
CONDUCT.
  S 4. Subsection (d) of section 5102 of the insurance law,  as  amended
by chapter 955 of the laws of 1984, is amended to read as follows:
  (d) "Serious  injury"  means a personal injury which results in death;
dismemberment; significant disfigurement; a fracture; loss of a fetus; A
COMPLETE TEAR OR RUPTURE OF A  NERVE,  TENDON,  LIGAMENT,  CARTILAGE  OR
MUSCLE;  A  TEAR,  RUPTURE  OR IMPINGEMENT OF A NERVE, TENDON, LIGAMENT,
CARTILAGE OR MUSCLE WHICH RESULTS IN A SIGNIFICANT IMPAIRMENT OF A  BODY
ORGAN,  MEMBER,  FUNCTION  OR  SYSTEM;  permanent  loss of use of a body
organ, member, function or system; permanent consequential limitation of
use of a body organ or member; significant limitation of use of  a  body
function  or system; or a medically determined injury or impairment of a
non-permanent nature which prevents the injured person  from  performing
substantially  all  of  the material acts which constitute such person's
usual and customary daily activities  for  not  less  than  ninety  days
during  the one hundred eighty days immediately following the occurrence
of the injury or impairment.
  S 5. Subsection (j) of section 3420 of the insurance law is amended by
adding a new paragraph 4 to read as follows:
  (4) THE TERM "COVERED PERSON" AS USED IN THIS ARTICLE SHALL  MEAN  ANY
PEDESTRIAN INJURED THROUGH THE USE OR OPERATION OF, OR ANY OWNER, OPERA-
TOR  OR  OCCUPANT  OF, A MOTOR VEHICLE WHICH HAS IN EFFECT THE FINANCIAL
SECURITY REQUIRED BY ARTICLE SIX OR EIGHT OF THE VEHICLE AND TRAFFIC LAW
OR WHICH IS REFERRED TO IN SUBDIVISION  TWO  OF  SECTION  THREE  HUNDRED
TWENTY-ONE  OF  SUCH  LAW;  OR  ANY OTHER PERSON ENTITLED TO FIRST PARTY
BENEFITS. FOR THE PURPOSES OF THIS ARTICLE, "COVERED PERSON" SHALL  ALSO
INCLUDE  ANY PERSON INJURED AS THE RESULT OF A STAGED, PLANNED OR INTEN-
TIONAL ACCIDENT, PROVIDED THAT SUCH PERSON IS NOT A PERPETRATOR OF OR  A
KNOWING PARTICIPANT IN THE STAGING OR PLANNING OF THE ACCIDENT.
  S  6.  Section  5202  of  the insurance law is amended by adding a new
subsection (m) to read as follows:
  (M) "COVERED PERSON" MEANS ANY PEDESTRIAN INJURED THROUGH THE  USE  OR
OPERATION  OF,  OR  ANY  OWNER, OPERATOR OR OCCUPANT OF, A MOTOR VEHICLE
WHICH HAS IN EFFECT THE FINANCIAL SECURITY REQUIRED BY  ARTICLE  SIX  OR
EIGHT OF THE VEHICLE AND TRAFFIC LAW OR WHICH IS REFERRED TO IN SUBDIVI-
SION  TWO  OF SECTION THREE HUNDRED TWENTY-ONE OF SUCH LAW; OR ANY OTHER
PERSON ENTITLED TO FIRST PARTY BENEFITS. FOR THE PURPOSES OF THIS  ARTI-
CLE,  "COVERED  PERSON"  SHALL  ALSO  INCLUDE  ANY PERSON INJURED AS THE
RESULT OF A STAGED, PLANNED OR INTENTIONAL ACCIDENT, PROVIDED THAT  SUCH
PERSON  IS  NOT A PERPETRATOR OF OR A KNOWING PARTICIPANT IN THE STAGING
OR PLANNING OF THE ACCIDENT.
  S 7. This act shall take effect immediately; provided that:

S. 1151                             7

  (a) section two of this act shall apply to benefits  initiated  on  or
after  the  one hundred eightieth day after this act shall have become a
law; and
  (b)  sections three, five and six of this act shall take effect on the
one hundred eightieth day after it shall have become a law provided that
the superintendent of financial services  shall  immediately  promulgate
rules  and  regulations pursuant to section 5109 of the insurance law as
amended by section three of this act and sections five and six  of  this
act  shall  apply  to  all new policies and policies that are renewed or
modified after such one hundred eightieth day.

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