senate Bill S3538

Enacts provisions relating to comprehensive motor vehicle reparations; including limited assignment of benefits; preclusion lift and mandatory arbitration

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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

  • 05 / Feb / 2013
    • REFERRED TO INSURANCE
  • 08 / Jan / 2014
    • REFERRED TO INSURANCE

Summary

Enacts provisions relating to comprehensive motor vehicle reparations; provides for limited assignment of benefits; preclusion lift; burden of proof shift; mandatory arbitration; provider decertification; and treatment guidelines.

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Bill Details

Versions:
S3538
Legislative Cycle:
2013-2014
Current Committee:
Senate Insurance
Law Section:
Insurance Law
Laws Affected:
Amd §§5102, 5106, 5109, 5108 & 3425, add §5110, Ins L
Versions Introduced in 2011-2012 Legislative Cycle:
S2816A

Sponsor Memo

BILL NUMBER:S3538

TITLE OF BILL: An act to amend the insurance law, in relation to
comprehensive motor vehicle reparations

PURPOSE: To enact comprehensive reforms to reduce fraud, abuse and the
associated costs in the New York no-fault system

SUMMARY OF PROVISIONS: Section 1 of the bill amends section 5102 of the
insurance law to define "health service provider".

Section 2 of the bill amends section 5106(a) of the insurance law to
clarify that preclusion of defenses to a claim is not the penalty for
late paid or denied claims and would make burden of proof requirements
more equitable.

Current law provides that claims for benefits must be paid or denied
within 30 days of receipt and provides for substantial interest (2% per
month) as a penalty for the failure of an insurer to meet that standard
This provision is intended to ensure the insurers' prompt payment of
meritorious claims Case law has added an additional penalty, i.e., that
the insurer is precluded from denying a non-meritorious claim, or
asserting any defense if it has violated the "30-day rule," thereby
mandating the payment of excessive and even fraudulent claims. This
section would ensure that insurers are not forced to pay non-metitorious
claims by providing that interest would be the exclusive remedy when an
insurer fails to issue a timely payment or denial of claim and that
insurers' defenses, such as a lack coverage or fraud, would not be
precluded.

This section would also make burden of proof requirements in no-fault
disputes more equitable. Our civil legal system places the burden on the
plaintiff to prove the basic elements of their case in order to prevail.
Over the years, no-fault case law in New York has shifted that burden of
proof entirely to the insurer to the point whereby a medical provider
(as an "assignee" under an "assignment of benefits") needs only to
provide a bill to establish a claim for benefits. The burden is on the
insurer to request information to "verify" that the services billed for
are medically necessary and in accordance with the no-fault law.
Frequently, a lengthy exchange of paperwork ensues. This section would
make burden of proof requirements in the no-fault context more equitable
by requiring the medical provider to present information that the
services billed are medically necessary and billed in accordance with
the applicable fee schedule

Section 3 of the bill amends section 5106(b) of the insurance law to
require mandatory arbitration of no-fault disputes Over 400,000 no-fault
cased are filed annually in the New York City courts. The court system
is not equipped to handle the pending caseload. It currently takes
between eighteen and thirty-six months to adjudicate a no-fault case
Obviously, this protracted delay was not contemplated by the legislature

when they originally enacted the no-fault system which was intended to
ensure prompt payment for medical costs resulting from auto accidents
Mandating arbitration for no-fault claims would provide for the expe-
ditious and streamlined resolution of no-fault disputes and would reduce
the excessive litigation which is currently clogging courts in New York
City. Unlike the court system, it currently takes only four to six
months for a no-fault dispute to be handled through arbitration Mandat-
ing arbitration would also greatly reduce litigation expenses for insur-
ers and would significantly reduce costs in the no-fault system.

Section 4 of the bill adds a new section 5110 to the insurance law to
provide assignment of benefit rules for no-fault which are similar to
assignment of benefit rules applicable to other types of medical claims.
Assignment of benefits is common in all types of medical claims. In such
a document, the patient/claimant authorizes the medical provider to
submit charges for payment to an insurer, provide information to support
the claim and receive benefits directly from the insurer on behalf of
the patient The provider does not receive a right to sue any third party
independently; that right remains with the patient/claimant.

The assignment used in New York no-fault claims differs from those
commonly used, in that it assigns "all rights and privileges and reme-
dies" to the provider to pursue benefits under the no-fault law This
allows the provider "assignee" the right to contest all issues, includ-
ing "policy" issues such as coverage eligibility and the
patient/clamant/assignor's duties to comply with policy conditions, such
as attending independent medical examinations or examinations under oath
The result is a huge amount of litigation, instigated by the
providers/assignees with little or no involvement from the injured party
This section would address this problem by providing that the right to
contest denials of claims involving policy issues would belong to the
claimant only -and the assignment would not be valid when coverage or
compliance with policy terms is in dispute.

Section 5 of the bill amends section 5109 of the insurance law to revise
current provisions authorizing the decertification of medical providers
who engage in fraud and certain other practices from receiving payment
under no-fault so as to allow for the implementation of these
provisions. The existing law authorizing the decertification of medical
providers who engage in fraud and certain other practices from receiving
payment under the no-fault system has not been implemented due to the
cumbersome nature of the current statute. This statute should be amended
so that the Insurance Department is authorized to review and decertify
unscrupulous medical providers from billing and collecting no-fault
benefits.

Sections 6 and 7 of the bill amend sections 5108 and 5106 of the insur-
ance law, respectively, to provide for the use of treatment guidelines
in the no-fault system. Treatment guidelines have been adopted in New
York for the workers compensation system and are a valuable tool in
preventing the fraudulent over utilization of unnecessary medical treat-
ments. This section would also prohibit insurers from paying any charge

which exceeds the applicable fee schedule or which is not provided for
under the fee schedule or compensable under Medicare.

Section 8 of the bill amends section 3425(b) of the insurance law to
allow insurers to rescind or cancel a policy within the first 60 days
back to the inception of the policy where there is nonpayment of the
initial premium or initial installment or where it is discovered that
the payment proceeds or identity of the policyholder were stolen. It is
common for those engaging in fraud to take out a policy without paying
the premium and with the sole purpose of engaging in insurance fraud.
They will then quickly stage an accident and bill the insurer for frau-
dulent treatments. Under current law, the insurer may be on the hook for
those treatments. When a policy is taken out fraudulently, an insurer
should not be required to provide benefits under that policy This
section would address this issue and deter this type of no-fault fraud.

Section 9 of the bill is the effective date.

JUSTIFICATION: New York's no fault system is plagued by fraud and abuse
which is adding significant costs to auto premiums in New York and a
major contributing factor making New Yorkers pay among the highest auto
insurance premiums in the nation. in fact, a recent Insurance Research
Council study found that in the New York City area, about one in every
five no-fault auto insurance claims closed in 2010 appear to have
elements of fraud In addition, New York's no-fault claim costs have far
outpaced that of other no-fault states and the overall cost of medical
care From 2004 through the 2nd Quarter of 2010, the average PIP claim
cost rose 60 4 percent in New York, nearly 42 points faster than the 18
6 percent growth rate in the Consumer Price Index cost of medical goods
and services found in the region The cost of no-fault personal injury
protection (PIP) coverage has also soared. New York's average no-fault
PIP claim cost $9,007 is the third highest in the nation as of 2nd quar-
ter 2010.

In order to address this rampant fraud and abuse problem and reduce
no-fault costs, comprehensive reform is necessary This bill includes a
number of important reforms that will give insurers the tools that they
need to fight fraud and abuse and reduce no-fault costs Honest New York
drivers should not have to pay the price for those that are gaming the
system and this bill will make the necessary changes to the law to get
tough on no-fault fraud and abuse.

LEGISLATIVE HISTORY: S 2816-A of 2011-12

FISCAL IMPLICATIONS: None

EFFECTIVE DATE: This act shall take effect immediately and shall apply
to all actions and proceedings commenced on or after such date; and
shall also apply to any action or proceeding which was commenced prior
to such effective date where, as of such date, a trial of the issues has
not vet commenced

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

                                  3538

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                            February 5, 2013
                               ___________

Introduced  by  Sen.  SEWARD -- 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  comprehensive  motor
  vehicle reparations

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

  Section 1. Section 5102 of the insurance law is amended  by  adding  a
new subsection (n) to read as follows:
  (N)  "HEALTH SERVICE PROVIDER" MEANS ANY MEDICAL PROVIDER THAT SUBMITS
A BILL FOR PAYMENT UNDER BENEFITS DEFINED AND PROVIDED BY  THIS  SECTION
FOR ANY OF THE FOLLOWING:
  (1)  MEDICAL, HOSPITAL (INCLUDING SERVICES RENDERED IN COMPLIANCE WITH
ARTICLE FORTY-ONE OF THE PUBLIC HEALTH LAW, WHETHER OR NOT SUCH SERVICES
ARE RENDERED DIRECTLY BY A HOSPITAL), SURGICAL, NURSING,  DENTAL,  AMBU-
LANCE, X-RAY, PRESCRIPTION DRUG AND PROSTHETIC SERVICES;
  (2) PSYCHIATRIC, PHYSICAL THERAPY (PROVIDED THAT TREATMENT IS RENDERED
PURSUANT TO A REFERRAL) AND OCCUPATIONAL THERAPY AND REHABILITATION;
  (3)  ANY NONMEDICAL REMEDIAL CARE AND TREATMENT RENDERED IN ACCORDANCE
WITH A RELIGIOUS METHOD OF HEALING RECOGNIZED BY THE LAWS OF THIS STATE;
AND
  (4) ANY OTHER PROFESSIONAL HEALTH SERVICES.
  S 2. Subsection (a) of section 5106 of the insurance law is amended by
adding two new undesignated paragraphs to read as follows:
  PAYMENT OF THE INTEREST PENALTY AND  REASONABLE  ATTORNEY  FEES  TO  A
CLAIMANT WHEN PAYMENT OF A CLAIM IS OVERDUE SHALL BE THE EXCLUSIVE REME-
DY  WHEN  AN  INSURER  FAILS  TO  MAKE TIMELY PAYMENT. THE FAILURE OF AN
INSURER TO MAKE TIMELY PAYMENT OR ISSUE  A  DENIAL  WITHIN  THIRTY  DAYS
AFTER PROOF OF CLAIM HAS BEEN SUBMITTED TO AN INSURER SHALL NOT PRECLUDE
SUCH  INSURER  FROM  ISSUING  A  DENIAL OR ASSERTING A DEFENSE AFTER THE
THIRTY DAY PERIOD HAS ELAPSED.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD08119-01-3

S. 3538                             2

  THE CLAIMANT HAS THE BURDEN OF PROOF TO SHOW THE EXPENSES UNDER  PARA-
GRAPH  ONE OF SUBSECTION (A) OF SECTION FIVE THOUSAND ONE HUNDRED TWO OF
THIS ARTICLE WERE MEDICALLY NECESSARY AND IN ACCORDANCE WITH THE  APPLI-
CABLE FEE SCHEDULE. EVIDENCE OF MAILING A CLAIM FORM SHALL NOT BE SUFFI-
CIENT TO MEET THIS BURDEN.
  S  3.  Subsection (b) of section 5106 of the insurance law, as amended
by chapter 452 of the laws of 2005, is amended to read as follows:
  (b) [Every insurer shall provide a claimant with the option of submit-
ting any dispute] ALL DISPUTES 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 SHALL BE SUBMITTED 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) of this section. The expedited eligibility
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.
  S 4. The insurance law is amended by adding a new section 5110 to read
as follows:
  S 5110. ASSIGNMENT OF BENEFITS TO  HEALTH  SERVICE  PROVIDERS.  (A)  A
"COVERED  PERSON"  HAS  THE  RIGHT TO ASSIGN CLAIMS FOR MEDICAL EXPENSES
UNDER THIS ARTICLE TO A "HEALTH SERVICE PROVIDER", AND  SUCH  ASSIGNMENT
SHALL  AFFORD  THE  HEALTH SERVICE PROVIDER AS THE ASSIGNEE, THE RIGHTS,
PRIVILEGES, AND REMEDIES FOR PAYMENT TO WHICH A COVERED PERSON IS  ENTI-
TLED TO UNDER THIS ARTICLE. HOWEVER, SUCH ASSIGNMENT IS VALID ONLY WHERE
COVERAGE  AND COMPLIANCE WITH POLICY TERMS BY THE COVERED PERSON ARE NOT
IN DISPUTE.
  (B) THE COVERED PERSON SHALL HAVE THE SOLE RIGHT TO CONTEST ANY ISSUES
INVOLVING COVERAGE OR  COMPLIANCE  WITH  POLICY  TERMS  BY  THE  COVERED
PERSON.
  (C) THE HEALTH SERVICE PROVIDER SHALL HAVE A LIEN AGAINST ANY RECOVERY
BY THE COVERED PERSON FOR SERVICES PROVIDED.
  (D)  THE HEALTH SERVICE PROVIDER SHALL NOT PURSUE PAYMENT FOR THE COST
OF SERVICES ARISING OUT OF THE INJURIES THE COVERED PERSON SUSTAINED DUE
TO A MOTOR VEHICLE ACCIDENT UNLESS THERE IS A DETERMINATION THAT  COVER-
AGE DOES NOT EXIST.
  S 5. 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 super-
intendent, in consultation with  the  commissioner  of  health  and  the
commissioner 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
notice and opportunity to be heard, as those afforded physicians  inves-
tigated  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  regulations]
AS  USED  IN  THIS  SECTION, "HEALTH SERVICES" MEANS SERVICES, SUPPLIES,

S. 3538                             3

THERAPIES OR OTHER TREATMENTS 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]  THE  SUPERINTENDENT  MAY  PROHIBIT  A
provider  of  health  services  FROM DEMANDING OR REQUESTING PAYMENT FOR
HEALTH SERVICES RENDERED UNDER THIS ARTICLE, FOR A PERIOD NOT  EXCEEDING
THREE  YEARS, IF THE SUPERINTENDENT DETERMINES, AFTER NOTICE AND A HEAR-
ING, 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  PERSON  to  solicit  for
[himself  or  herself]  THE PROVIDER OF HEALTH SERVICES or [for] another
PERSON OR ENTITY, professional treatment, examination  or  care  of  [an
injured] A person in connection with any claim under this article; or
  [(4)]  (3)  has  refused to appear before, or [to] answer ANY QUESTION
upon request of, the [commissioner of health, the] superintendent[,]  or
any  duly  authorized officer of [the] THIS 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
  [(5)] (4) has engaged in [patterns] A PATTERN of billing for [services
which were not provided]:
  (I) HEALTH SERVICES ALLEGED TO HAVE BEEN RENDERED UNDER THIS  ARTICLE,
WHEN THE HEALTH SERVICES WERE NOT RENDERED; OR
  (II) UNNECESSARY HEALTH SERVICES; OR
  (5)  UTILIZED  UNLICENSED PERSONS TO RENDER HEALTH SERVICES UNDER THIS
ARTICLE, WHEN ONLY A PERSON LICENSED IN THIS STATE MAY RENDER THE HEALTH
SERVICES; OR
  (6) UTILIZED LICENSED PERSONS TO RENDER HEALTH SERVICES, WHEN  RENDER-
ING  THE  HEALTH SERVICES IS BEYOND THE AUTHORIZED SCOPE OF THE PERSON'S
LICENSE; OR
  (7) CEDED OWNERSHIP, OPERATION OR CONTROL OF A BUSINESS ENTITY AUTHOR-
IZED TO PROVIDE PROFESSIONAL HEALTH SERVICES IN  THIS  STATE,  INCLUDING
BUT NOT LIMITED TO A PROFESSIONAL SERVICE CORPORATION, LIMITED LIABILITY
COMPANY  OR  REGISTERED  LIMITED  LIABILITY PARTNERSHIP, TO A PERSON NOT
LICENSED TO RENDER THE HEALTH SERVICES FOR WHICH THE ENTITY  IS  LEGALLY
AUTHORIZED  TO  PROVIDE, EXCEPT WHERE THE UNLICENSED PERSON'S OWNERSHIP,
OPERATION OR CONTROL IS OTHERWISE PERMITTED BY LAW; OR
  (8) COMMITTED A FRAUDULENT INSURANCE ACT AS DEFINED IN SECTION  176.05
OF THE PENAL LAW; OR
  (9)  HAS  BEEN  CONVICTED OF A CRIME INVOLVING FRAUDULENT OR DISHONEST
PRACTICES; OR
  (10) VIOLATED ANY PROVISION OF THIS ARTICLE OR REGULATIONS PROMULGATED
THEREUNDER.

S. 3538                             4

  (c) [Providers] 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 HEALTH
SERVICES under this article [if such provider pursuant to  this  section
has been prohibited from demanding or requesting 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  PURSUANT  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 rendered at any time after such provider has been  prohibited
from  demanding or requesting payment for medical services in connection
with any claim under this article] SUCH HEALTH SERVICES.
  (d) The [commissioner of health and  the  commissioner  of  education]
SUPERINTENDENT shall maintain [and regularly update] a database contain-
ing  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 infor-
mation 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  A  PAYMENT  FOR  HEALTH
SERVICES  PURSUANT  TO SUBSECTION (B) OF THIS SECTION. ANY CIVIL PENALTY
IMPOSED 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,  OR  INSURER  to  investigate
instances  of misconduct by a [health care] provider [and, after a hear-
ing 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
APPROPRIATE  ACTION  PURSUANT  TO ANY OTHER PROVISION OF LAW. A DETERMI-
NATION OF THE SUPERINTENDENT PURSUANT TO SUBSECTION (B) OF THIS  SECTION
SHALL NOT BE BINDING UPON THE COMMISSIONER OF HEALTH OR THE COMMISSIONER
OF  EDUCATION  IN A PROFESSIONAL DISCIPLINARY PROCEEDING RELATING TO THE
SAME CONDUCT.
  S 6. Section 5108 of the insurance law is amended to read as follows:
  S 5108. Limit on charges by providers  of  health  services.  (a)  The
charges  for  services  specified  in paragraph one of subsection (a) of
section five thousand one hundred two of this article  and  any  further
health  service charges which are incurred as a result of the injury and
which are in excess of basic economic loss, shall not exceed the charges
permissible under the schedules prepared and established by the chairman
of the workers' compensation  board  for  industrial  accidents,  except
where  the  insurer  or arbitrator determines that unusual procedures or
unique circumstances justify the excess charge, AND SHALL BE SUBJECT  TO
THE  TREATMENT GUIDELINES ESTABLISHED PURSUANT TO SUBSECTION (D) OF THIS
SECTION.  AT NO TIME SHALL AN INSURER PAY ANY CHARGE  THAT  EXCEEDS  THE
CHARGES  PERMISSIBLE  UNDER THE SCHEDULE PREPARED AND ESTABLISHED BY THE
CHAIR OF THE WORKERS' COMPENSATION BOARD.
  (b) The superintendent, after consulting  with  the  chairman  of  the
workers'  compensation  board  and  the  commissioner  of  health, shall
promulgate rules  and  regulations  implementing  and  coordinating  the

S. 3538                             5

provisions  of  this  article  and  the  workers'  compensation law with
respect to charges for the professional  health  services  specified  in
paragraph one of subsection (a) of section five thousand one hundred two
of  this  article, including the establishment of schedules for all such
services for which schedules have not been prepared and  established  by
the  chairman  of  the  workers'  compensation board, INCLUDING, BUT NOT
LIMITED, TO DURABLE MEDICAL EQUIPMENT OR SUPPLIES.    ADDITIONALLY,  THE
SUPERINTENDENT,  AFTER CONSULTATION WITH THE WORKERS' COMPENSATION BOARD
AND THE COMMISSIONER OF HEALTH, SHALL  PROMULGATE  TREATMENT  GUIDELINES
WITH THE RESPECT OF TREATING COVERED PERSONS.  CHARGES FOR SERVICES THAT
ARE NOT SPECIFICALLY SCHEDULED BY THE SUPERINTENDENT OF INSURANCE OR THE
CHAIRMAN  OF  THE  WORKERS'  COMPENSATION  BOARD, OR ARE NOT COMPENSABLE
CHARGES UNDER MEDICARE ARE NOT COMPENSABLE HEALTH SERVICE CHARGES  UNDER
SUBSECTION (A) OF SECTION FIVE THOUSAND ONE HUNDRED TWO OF THIS ARTICLE.
  (c)  No  provider  of  health  services  specified in paragraph one of
subsection (a) of section five thousand one hundred two of this  article
may  demand or request any payment in addition to the charges authorized
pursuant to this section. NO SUCH PROVIDER MAY  BE  REIMBURSED  FOR  ANY
SERVICES  UNLESS  THE  PROVIDER  COMPLIES  WITH  SUBSECTION  (D) OF THIS
SECTION. Every insurer shall report to the commissioner  of  health  any
patterns  of overcharging, excessive treatment or other improper actions
by a health provider within thirty days after such insurer has knowledge
of such pattern.
  (D) NOTWITHSTANDING ANY OTHER PROVISION OF THE STATUTE, RULE OR  REGU-
LATION TO THE CONTRARY, THE FOLLOWING SHALL APPLY FOR ALL INDIVIDUALS OR
ENTITIES  THAT PROVIDE, TREAT, OR CHARGE FOR SERVICES SPECIFIED IN PARA-
GRAPH ONE OF SUBSECTION (A) OF SECTION FIVE THOUSAND ONE HUNDRED TWO  OF
THIS ARTICLE:
  (1) THE TREATING PROVIDER SHALL FOLLOW THE TREATMENT GUIDELINES ESTAB-
LISHED BY THE SUPERINTENDENT;
  (2)  DEVIATIONS  FROM  THE TREATMENT GUIDELINES MAY BE PERMITTED UNDER
THE FOLLOWING CONDITIONS:
  (I) PRIOR WRITTEN OR ELECTRONIC REQUEST IS GIVEN TO THE INSURER  PRIOR
TO COMMENCING TREATMENT. THE REQUEST SHALL CONTAIN JUSTIFICATION FOR THE
DEVIATION  FROM  THE  TREATMENT  GUIDELINES.  THE  BURDEN OF SHOWING THE
NECESSITY OF THE DEVIATION REMAINS  SOLELY  ON  THE  TREATING  PROVIDER.
FAILURE  TO PROVIDE THIS REQUEST SHALL RESULT IN A MAXIMUM REIMBURSEMENT
OF FIFTY PERCENT OF THE TREATMENT GUIDELINES.
  (II) THE INSURER SHALL NOT BE PRECLUDED FROM EVALUATING THE  DEVIATION
FOR  PAYMENT  DURING  THE  PENDENCY  OF THE REVIEW, AND MAY UTILIZE PEER
REVIEW FOR EVALUATION OF THE DEVIATION.
  (III) ANY DISPUTES SHALL BE RESOLVED THROUGH A PANEL  OF  EXPERTS  WHO
HAVE  BEEN  TRAINED OR CERTIFIED IN THE TREATMENT GUIDELINES PURSUANT TO
SUBSECTION (E) OF SECTION FIVE THOUSAND ONE HUNDRED SIX OF THIS ARTICLE.
  (3) AN INSURER MAY SCHEDULE AN INDEPENDENT MEDICAL EXAMINATION AT  ANY
TIME DURING THE COURSE OF TREATMENT.
  (4)  SERVICES  OR  SUPPLIES NOT COVERED BY THE TREATMENT GUIDELINES OR
THE WORKERS' COMPENSATION FEE SCHEDULE SHALL NOT BE COMPENSABLE.
  S 7. Section 5106 of the insurance law is  amended  by  adding  a  new
subsection (e) to read as follows:
  (E)  EVERY INSURER SHALL PROVIDE THE TREATING PROVIDER WITH THE OPTION
OF SUBMITTING A DISPUTE INVOLVING A  REQUEST  FOR  DEVIATIONS  FROM  THE
TREATMENT  GUIDELINES  UNDER SUBSECTION (D) OF SECTION FIVE THOUSAND ONE
HUNDRED EIGHT OF THIS ARTICLE  TO  ARBITRATION  PURSUANT  TO  SIMPLIFIED
PROCEDURES  PROMULGATED  OR APPROVED BY THE SUPERINTENDENT. SUCH SIMPLI-

S. 3538                             6

FIED PROCEDURES SHALL INCLUDE ARBITRATION THROUGH A PANEL OF EXPERTS WHO
HAVE BEEN TRAINED OR CERTIFIED IN THE TREATMENT GUIDELINES.
  S 8. Subsection (b) of section 3425 of the insurance law is amended by
adding a new undesignated paragraph to read as follows:
  NOTWITHSTANDING ANY RULE, LAW OR REGULATION TO THE CONTRARY, AN INSUR-
ER  MAY RESCIND, OR RETROACTIVELY CANCEL TO THE INCEPTION OF THE POLICY,
COVERAGE FOR PERSONAL INJURY PROTECTION UNDER ARTICLE FIFTY-ONE OF  THIS
CHAPTER  WHERE  THERE  IS  NONPAYMENT  OF THE INITIAL PREMIUM OR INITIAL
INSTALLMENT WITHIN THE FIRST SIXTY DAYS, OR WHERE IT IS DISCOVERED  THAT
THE  PAYMENT  PROCEEDS  OR  IDENTITY  OF THE PURPORTED POLICYHOLDER WERE
STOLEN. A PERSON WHO IS INJURED DURING THIS  PERIOD  MAY  HAVE  RECOURSE
UNDER  A PERSONAL POLICY OF INSURANCE OR TO THE MOTOR VEHICLE INDEMNIFI-
CATION CORPORATION PROVIDED SUCH PERSON DID NOT PARTICIPATE IN ANY FRAU-
DULENT ACTIVITY, INCLUDING BUT NOT LIMITED TO, A STAGED OR INTENTIONALLY
CAUSED ACCIDENT.
  S 9. This act shall take effect immediately and  shall  apply  to  all
actions  and proceedings commenced on or after such date; and shall also
apply to any action or proceeding which  was  commenced  prior  to  such
effective date where, as of such date, a trial of the issues has not yet
commenced.

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