senate Bill S3540

Relates to coverage for certain benefits under comprehensive motor vehicle insurance

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Sponsor

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

Relates to coverage for certain benefits under comprehensive motor vehicle insurance; prohibits assignment of benefits to durable medical equipment providers unless approved.

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Bill Details

Versions:
S3540
Legislative Cycle:
2013-2014
Current Committee:
Senate Insurance
Law Section:
Insurance Law
Laws Affected:
Amd §5102, add §5110, Ins L
Versions Introduced in 2011-2012 Legislative Cycle:
S5064A

Sponsor Memo

BILL NUMBER:S3540

TITLE OF BILL: An act to amend the insurance law, in relation to cover-
age for certain benefits under comprehensive motor vehicle insurance

PURPOSE: The purpose of this legislation is to eliminate the assignment
of benefits for durable medical equipment in the no-fault system

SUMMARY OF PROVISIONS: Section 1 adds a new subsection (n) to section
5102 of the insurance law to define "health service provider."

Section 2 adds a new section 5110 to the insurance law to prohibit the
assignment of benefits for durable medical equipment to a health service
provider unless the health service provider has been approved by the
National Supplier Clearinghouse as an authorized Medicare supplier of
durable medical equipment, prosthetics, orthotics and supplies Durable
equipment includes, but is not limited to, durable medical equipment and
supplies, medical/surgical supplies, orthopedic footwear and orthotic
and prosthetic appliances.

JUSTIFICATION: In recent years an increasing portion of the no-fault
fraud has been observed in the area of durable medical equipment (DME).
In many instances the DME wholesaler is involved in the scam and the
provider is committing fraud in conjunction with the medical supply
companies Many of these DME frauds occur in the following manner.

Many items are subject to the fee schedule Items not subject to the fee
schedule ate billed at a rate of 50% over cost. However, the wholesaler
will often fabricate a price, and then add on the 50% profit. For exam-
ple, TENS & EMS machines (which emit electrical impulses) perform nearly
the same functions. Until last year TENS machines were not subject to
the fee schedule, so TENS and EMS billing was relatively equal. However,
last year TENS machines were put on the fee schedule. it is no coinci-
dence that no-fault fraudsters are reducing TENS billings and EMS bill-
ings have dramatically increased so that these fraudsters can fabricate
a price and then add in the 50% profit on top.

As is readily seen by these cases, this area of no-fault fraud is ramp-
ant and growing at a tremendous rate producing the fastest and most cash
profit of any fraud. Since Jan 1, 2009, there have been 739 new DME
providers registered in NYS. There were 340 new facilities registered in
Brooklyn alone but only 10 in Buffalo In one especially egregious case.
one patient's DME billing included 16 different items totaling otter
$6,000 including a luxury turbo bath spa, an infrared heat wand, a wand
massager, two different post-op knee braces. a back support seat, a TENS
belt and others The patient reports that they never used any of the
items which were billed for.

This legislation is not unique in prohibiting assignment of benefits for
a lawful no-fault expense Assignment of benefits for transportation
expenses was originally allowed but the no-fault system quickly saw an

explosive rise in those expenses. 1 he Department of Financial Services
amended the no-fault regulations to prohibit assignment of benefits for
transportation and the expenses fell very quickly Prohibiting assignment
of benefits to health providers for DME should see the same outcome
while still allowing the no-fault claimant to directly receive payment
for their legitimate DME needs.

LEGISLATIVE HISTORY: S.5064-A of 2011-12

FISCAL IMPLICATIONS: None to State.

EFFECTIVE DATE: Immediately

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

                                  3540

                       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 coverage  for  certain
  benefits under comprehensive motor vehicle insurance

  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 OR DURABLE
MEDICAL EQUIPMENT SUPPLIER THAT SUBMITS A BILL FOR PAYMENT  UNDER  BENE-
FITS 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 OR EQUIPMENT;
  (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. The insurance law is amended by adding a new section 5110 to read
as follows:
  S 5110. CHARGES FOR DURABLE MEDICAL EQUIPMENT. (A)  A  COVERED  PERSON
SHALL  NOT  ASSIGN  CLAIMS  FOR MEDICAL EXPENSES UNDER THIS ARTICLE TO A
HEALTH SERVICE PROVIDER FOR DURABLE MEDICAL EQUIPMENT UNLESS THE  HEALTH
SERVICE  PROVIDER  HAS  BEEN APPROVED BY THE NATIONAL SUPPLIER CLEARING-
HOUSE AS AN AUTHORIZED MEDICARE SUPPLIER OF DURABLE  MEDICAL  EQUIPMENT,
PROSTHETICS,  ORTHOTICS  AND  SUPPLIES.    FOR PURPOSES OF THIS SECTION,
DURABLE MEDICAL EQUIPMENT INCLUDES,  BUT  IS  NOT  LIMITED  TO,  DURABLE

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD08138-01-3

S. 3540                             2

MEDICAL  EQUIPMENT  AND  SUPPLIES, MEDICAL/SURGICAL SUPPLIES, ORTHOPEDIC
FOOTWEAR AND ORTHOTIC AND PROSTHETIC APPLIANCES.
  (B)  NO HEALTH SERVICE PROVIDER SHALL BE ELIGIBLE TO DEMAND OR REQUEST
PAYMENT FROM AN INSURER FOR DURABLE MEDICAL EQUIPMENT  UNLESS  THE  MAKE
AND  MODEL  NUMBER  OF THE EQUIPMENT IS SET FORTH ON THE INVOICE FOR THE
EQUIPMENT.
  S 3. This act shall take effect immediately.

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