senate Bill S6133

Relates to unauthorized providers of health services

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Sponsor

O'BRIEN

Bill Status


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

  • 08 / Jan / 2014
    • REFERRED TO INSURANCE

Summary

Relates to unauthorized providers of health services.

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Bill Details

Versions:
S6133
Legislative Cycle:
2013-2014
Current Committee:
Senate Insurance
Law Section:
Insurance Law
Laws Affected:
Amd §§5102 & 5109, Ins L
Versions Introduced in Previous Legislative Cycles:
2011-2012: A4704
2009-2010: A7128

Sponsor Memo

BILL NUMBER:S6133

TITLE OF BILL: An act to amend the insurance law, in relation to
unauthorized providers of health services

PURPOSE: This bill addresses certain abuses of the no-fault insurance
system by permitting the Superintendent of insurance (Superintendent)
to prohibit a provider of health services from demanding or requesting
payment for health services rendered under Article 51 of the Insurance
Law for a period not exceeding three years if the Superintendent
determines that the provider has engaged in certain activities.

SUMMARY OF PROVISIONS:

Section 1 of the bill amends the lead sentence of Insurance Law § 5102
to specify that the definitions set forth in that section apply only
to Article 51 and not the entire Insurance Law.

Section 1 also adds new Insurance Law § 5102(a) to specify that the
term "provider of health services" means "a person or entity who
renders health services."

Section 2 amends Insurance Law §§ 5109(a) to define "health services,"
for purposes of Insurance Law § 5109, as services, supplies, therapies
or other treatments as specified in Insurance Law § 5102(a)(1)(i),
(ii) or (iv).

Section 2 also amends Insurance Law § 5109(b) to permit the
Superintendent to prohibit a provider of health services from
demanding or requesting payment for health services rendered under
Article 51 of the Insurance Law, 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, as defined in the Education
Law, in connection with health services rendered under Article 51; (2)
solicited, or employed another person to solicit for the provider or
another person or entity, professional treatment, examination or care
of a person in connection with any claim under Article 51; (3) refused
to appear before, or answer any question upon request of, the
Superintendent or any duly authorized officer of New York State, or
refused to produce any relevant information concerning the provider's
conduct in connection with health services rendered under Article 51;
(4) engaged in a pattern of billing for health services alleged to
have been rendered under Article 51 which were not rendered or engaged
in a pattern of billing for unnecessary health services; (5) utilized
unlicensed persons to render health services under Article 51, when
only a person licensed in New York may render the health services; (6)
utilized licensed persons to render health services, when rendering
the health services is beyond the authorized scope of the person's
license; (7) ceded ownership, operation or control of a business
entity that provides health services, such as a professional service
corporation, a professional limited liability company or a registered
limited liability partnership, to a person not licensed to render the
health services for which the entity is legally authorized to provide,
unless otherwise permitted by law; (8) committed a fraudulent
insurance act as defined in Penal Law § 176.05; (9) has been convicted
of a crime involving fraudulent or dishonest practices: or (10)


violated any provision of Article 51 or regulations promulgated
thereunder.

Section 2 further amends Insurance Law § 5109(c) to state that a
provider of health services shall not demand or request payment for
any health services under Article 51 that are rendered during the term
of the prohibition ordered by the Superintendent pursuant to Insurance
Law § 5109(b). This provision prevents a provider of health services
from circumventing the prohibition by directly billing a patient or
the patient's health insurer for health services otherwise
eligible.for compensation by a no-fault insurer.

Section 2 also amends Insurance Law § 5109(d) to require 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.

Section 2 further reletters Insurance Law § 5109(e) as (t) and adds a
new subsection {e) to permit the Superintendent to 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 § 5109(b). However, any
civil penalty imposed for a fraudulent insurance act must be levied
pursuant to Article 4 of the Insurance Law.

Former Insurance Law § 5109(e), relettered as subsection (t), is
amended to state that nothing in Insurance Law § 5109 shall be
construed as limiting in any respect the powers and duties of the
Commissioners of Health and Education and the Superintendent to
investigate instances of misconduct by a provider of health services
and take appropriate action pursuant to any other provision of law.
Moreover, the bill provides that a determination rendered by the
Superintendent pursuant to Insurance Law § 5109(b) does not bind the
Commissioner of Health or the Commissioner of Education in a
professional discipline proceeding related to the same conduct.

Section 3 of the bill provides that it would take effect immediately.

EXISTING LAW: Insurance Law § 5102 defines, for purposes of the entire
Insurance Law, terms related to no-fault insurance. Insurance Law
5109 requires the Superintendent, in consultation with the
Commissioners of Health and Education, to promulgate a regulation that
establishes standards and procedures "for investigating and suspending
or removing the authorization for providers of health services to
demand or request payment for health services as specified in"
Insurance Law § 5102(a)(1). Insurance Law § 5109 also requires the
Commissioners of Health and Education to provide a list of the names
of all providers of health services who the Commissioners deem
unauthorized to demand or request any payment for medical services
because the provider has engaged in certain activities, including
soliciting or employing 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 Article 51, or engaging in
patterns of billing for services that were not provided.


Insurance Law § 5109 also prohibits a provider of health services from
subsequently treating, for remuneration, as a private patient, any
person seeking medical treatment under Article 51 of the Insurance
Law, and requires the Commissioners of Health and Education to
maintain a database containing a list of providers of health services
prohibited from demanding or requesting payment for health services.

LEGISLATIVE HISTORY:

S.3553 of 2009-2010 Referred to Insurance A.4704 of 2011-2012 Referred
to Insurance

STATEMENT IN SUPPORT: Under Article 51 of the Insurance Law, known as
the "Comprehensive Motor Vehicle Insurance Reparations Act" or more
commonly as the "no-fault insurance law," a person who sustains an
injury arising from the use or operation of a motor vehicle may
receive up to $50,000 in benefits for expenses incurred as a result of
that accident. An insured may purchase additional coverage, thereby
raising the limits. The purpose of the no-fault system is to ensure
prompt payment for necessary expenses incurred because of legitimate
injuries sustained in an accident regardless of responsibility. In
most instances, no-fault insurers directly reimburse providers of
health services, assuming that a licensed professional rendered the
treatment and that the treatment was medically necessary.

For years, certain owners and operators of professional service
corporations have abused the no-fault insurance system. These persons
are involved in activities that include intentionally staging
accidents and billing no-fault insurers for health services that were
unnecessary or never in fact rendered. This fraud costs no-fault
insurers tens if not hundreds of millions of dollars, which insurers
ultimately pass on to New York consumers in the form of higher
automobile premiums. According to the Insurance Information Institute,
New York consumers are paying $1.2 million a day because of no-fault
insurance fraud. Queens County District Attorney Richard Brown, in
statements made to the media concerning recent no-fault insurance
related indictments, reported that no-fault insurance fraud costs the
insurance industry $14 billion a year nationwide and New York
consumers $1 billion a year, which results in an additional 10% per
year increase in automobile premiums for each New York consumer.

In addition, of great concern to the public is the ownership, control
and ,daily operation of professional service corporations or other
similar business entities by individuals who are not licensed to
practice medicine. Ownership of professional service corporations by
unlicensed persons works as follows; unlicensed persons pay licensed
physicians to use the physicians' names, signatures and licenses for
the purpose of fraudulently billing no-fault insurers for services
that were never rendered, are of no diagnostic value or are medically
unnecessary. These physicians essentially sell their licenses, for a
fee, and become "paper owners" of the professional service
corporation, which in turn permits unlicensed and unqualified persons
to own, operate and control a professional service corporation,
although they are prohibited from having any financial interest in
such a corporation pursuant to Article 15 of the Business Corporation
Law. Schemes such as this, which could involve professional business
entities other than professional service corporations and health "Care


professionals other than physicians, severely compromise the safety
and integrity of the health care system in New York. As a result,
certain professional business entities have become unjustly enriched
through the ill-gotten proceeds of illegal activity, increasing the
cost of insurance premiums for the driving public. More importantly,
these abuses threaten the affordability of health care and the
public's health, safety and welfare.

The current version of Insurance Law 5109 attempted to curb abuses in
the no-fault insurance system by requiring the Department of Health
and the State Education Department to investigate providers of health
services who engage in certain misconduct, and suspend or remove their
authorization to seek payment for medical services pursuant to
standards and procedures developed by the Insurance Department.
However, responsibility for implementation of section 5109 is too
diffuse for the current law to be effective. Section 5109 requires the
Insurance Department to essentially set forth the procedures that the
Department of Health and State Education Department must follow.
Accordingly, this bill consolidates within the Insurance Department
responsibility for investigating such providers and prohibiting them
from seeking payment.

Specifically, this bill authorizes the Superintendent to prohibit a
provider of health services from demanding or requesting payment for
health services rendered under Article 51 for a period not exceeding
three years, if the Superintendent determines that the provider has
engaged in certain activities. Under the bill, a provider may not
circumvent the prohibition by billing a patient or the patient's
health insurer directly for health services otherwise eligible for
compensation by a no-fault insurer.

Moreover, while the Insurance Department currently interprets
"provider" to include an individual and an entity, such as a
professional service corporation, this bill makes explicit that the
term applies to both in a new definition of "provider of health
services" in Insurance Law § 5102.

Furthermore, this bill 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
from no-fault insurers, and to make this information publicly
available. In addition, the bill permits the Superintendent to 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. Making the information publicly available and
permitting the Superintendent to levy a civil penalty will deter
abusive no-fault insurance practices.

Finally, the revision of Insurance Law 5109(f) makes clear that the
Commissioners- of Health and Education and the Superintendent are not
precluded from taking appropriate action under any other provision of
law, such as bringing a disciplinary proceeding under the Education
Law, merely because the Superintendent prohibits a provider of health
services from demanding or requesting payment under Article 51 of the
Insurance Law.


BUDGET IMPLICATIONS: This bill will have no fiscal impact to the
State.

EFFECTIVE DATE: This bill takes effect immediately.

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

                                  6133

                            I N  S E N A T E

                               (PREFILED)

                             January 8, 2014
                               ___________

Introduced  by  Sen. O'BRIEN -- 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 unauthorized providers
  of health services

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

  Section  1. The opening paragraph of section 5102 of the insurance law
is amended and a new subsection (n) is added to read as follows:
  In this [chapter] ARTICLE:
  (N) "PROVIDER OF HEALTH SERVICES" MEANS A PERSON OR ENTITY WHO RENDERS
HEALTH SERVICES.
  S 2. 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,
THERAPIES  OR OTHER TREATMENTS 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

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD13143-02-4

S. 6133                             2

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 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)] (2) 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)  has]  (3)  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) has] (4) engaged in [patterns] A PATTERN of billing for:
  (A) HEALTH services [which] ALLEGED TO HAVE BEEN RENDERED  UNDER  THIS
ARTICLE, WHEN THE HEALTH SERVICES were not [provided.] RENDERED; OR
  (B) UNNECESSARY HEALTH SERVICES;
  (5)  UTILIZED  UNLICENSED PERSONS TO RENDER HEALTH SERVICES UNDER THIS
ARTICLE, WHEN ONLY A PERSON LICENSED IN THIS STATE MAY RENDER THE HEALTH
SERVICES;
  (6) UTILIZED LICENSED PERSONS TO RENDER HEALTH SERVICES, WHEN  RENDER-
ING  THE  HEALTH SERVICES IS BEYOND THE AUTHORIZED SCOPE OF THE PERSON'S
LICENSE;
  (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, PROFESSIONAL
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;
  (8)  COMMITTED A FRAUDULENT INSURANCE ACT AS DEFINED IN SECTION 176.05
OF THE PENAL LAW;
  (9) HAS BEEN CONVICTED OF A CRIME INVOLVING  FRAUDULENT  OR  DISHONEST
PRACTICES; OR
  (10) VIOLATED ANY PROVISION OF THIS ARTICLE OR REGULATIONS PROMULGATED
THEREUNDER.
  (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 ANY  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

S. 6133                             3

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 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.
  [(e)] (F) Nothing in this section shall be construed  as  limiting  in
any respect the powers and duties of the commissioner of health, commis-
sioner  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 3. This act shall take effect immediately.

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