S T A T E O F N E W Y O R K
________________________________________________________________________
3167--A
2009-2010 Regular Sessions
I N A S S E M B L Y
January 23, 2009
___________
Introduced by M. of A. BRADLEY, DelMONTE, GUNTHER, BENEDETTO, GOTTFRIED,
COLTON, JAFFEE, FIELDS, MAISEL, SCHIMEL -- Multi-Sponsored by -- M. of
A. BOYLAND, BRENNAN, CYMBROWITZ, HYER-SPENCER, MARKEY, PHEFFER, REIL-
LY, ROBINSON, SWEENEY, TITONE, TOWNS, WEISENBERG -- read once and
referred to the Committee on Insurance -- committee discharged, bill
amended, ordered reprinted as amended and recommitted to said commit-
tee
AN ACT to amend the insurance law, in relation to standards for prompt,
fair and equitable settlement of claims for health care and payments
for health care services
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Subsections (a) and (b) of section 3224-a of the insurance
law, as amended by chapter 666 of the laws of 1997, are amended to read
as follows:
(a) Except in a case where the obligation of an insurer or an organ-
ization or corporation licensed or certified pursuant to article forty-
three of this chapter or article forty-four of the public health law to
pay a claim submitted by a policyholder or person covered under such
policy or make a payment to a health care provider is not reasonably
clear, or when there is a reasonable basis supported by specific infor-
mation available for review by the superintendent that such claim or
bill for health care services rendered was submitted fraudulently, such
insurer or organization or corporation shall pay the claim to a policy-
holder or covered person or make a payment to a health care provider
within [forty-five] FIFTEEN DAYS OF RECEIPT OF A CLAIM OR BILL FOR
SERVICES RENDERED WHICH IS TRANSMITTED ELECTRONICALLY OR WITHIN THIRTY
days of receipt of a claim or bill for services rendered WHICH IS
SUBMITTED BY OTHER MEANS, SUCH AS PAPER OR FACSIMILE. THE INSURER,
ORGANIZATION OR CORPORATION SHALL NOT DENY PAYMENT FOR A CLAIM FOR
MEDICALLY NECESSARY COVERED SERVICES ON THE BASIS OF AN ADMINISTRATIVE
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD03354-02-9
A. 3167--A 2
OR TECHNICAL DEFECT INCLUDING A FAILURE TO OBTAIN A REFERRAL; UNTIMELY
FILING OF THE CLAIM; LATE NOTIFICATION OF A HOSPITAL ADMISSION OR THE
PROVISION OF SERVICES THAT THE INSURER, ORGANIZATION OR CORPORATION MAY
REQUIRE; A FAILURE TO PROVIDE NOTIFICATION OF A HOSPITAL ADMISSION OR
PROVISION OF SERVICES THAT THE INSURER, ORGANIZATION OR CORPORATION MAY
REQUIRE; A FAILURE TO PROVIDE PROPER REGISTRATION OF A HOSPITAL ADMIS-
SION OR PROVISION OF SERVICES THAT THE INSURER, ORGANIZATION OR CORPO-
RATION MAY REQUIRE; A FAILURE TO REQUEST PROPER AUTHORIZATION OF A
HOSPITAL ADMISSION OR PROVISION OF SERVICES THAT THE INSURER, ORGANIZA-
TION OR CORPORATION MAY REQUIRE; OR ANY OTHER ADMINISTRATIVE OR TECHNI-
CAL DEFECT AS THE SUPERINTENDENT MAY SPECIFY IN A REGULATION AFTER
CONSULTATION WITH THE COMMISSIONER OF HEALTH. NOTHING IN THIS SECTION
SHALL PRECLUDE A HEALTH CARE PROVIDER AND A HEALTH PLAN FROM AGREEING TO
PROVISIONS DIFFERENT FROM THOSE IN THIS SECTION; PROVIDED, HOWEVER, THAT
ANY AGREEMENT THAT PURPORTS TO WAIVE, LIMIT, DISCLAIM, OR IN ANY WAY
DIMINISH THE RIGHTS OF A HEALTH CARE PROVIDER SET FORTH IN THIS SECTION
SHALL BE VOID AS CONTRARY TO PUBLIC POLICY.
(b) In a case where the obligation of an insurer or an organization or
corporation licensed or certified pursuant to article forty-three of
this chapter or article forty-four of the public health law to pay a
claim or make a payment for health care services rendered is not reason-
ably clear due to a good faith dispute regarding the eligibility of a
person for coverage, the liability of another insurer or corporation or
organization for all or part of the claim, the amount of the claim, the
benefits covered under a contract or agreement, or the manner in which
services were accessed or provided, an insurer or organization or corpo-
ration shall pay any undisputed portion of the claim in accordance with
this subsection and notify the policyholder, covered person [or] AND
health care provider in writing within FIFTEEN CALENDAR DAYS OF THE
RECEIPT OF THE CLAIM TRANSMITTED ELECTRONICALLY, OR thirty calendar days
of the receipt of the claim SUBMITTED BY OTHER MEANS, SUCH AS PAPER OR
FACSIMILE:
(1) that it is not obligated to pay the claim or make the medical
payment, stating the specific reasons why it is not liable; or
(2) to request [all] additional information needed to determine
liability to pay the claim or make the health care payment; PROVIDED,
HOWEVER, IN RESPONSE TO ITS RECEIPT OF A SPECIFIC CLAIM FOR SERVICES AN
INSURER, ORGANIZATION OR CORPORATION SHALL NOT GENERATE AND TRANSMIT A
QUESTIONNAIRE IN ORDER TO DETERMINE WHETHER THE POLICYHOLDER OR COVERED
PERSON IS COVERED FOR ALL OR PART OF THE CLAIM BY ANOTHER INSURER,
CORPORATION OR ORGANIZATION. NOTHING IN THIS SECTION SHALL OTHERWISE
PRECLUDE AN INSURER, ORGANIZATION OR CORPORATION FROM SENDING A COORDI-
NATION OF BENEFIT QUESTIONNAIRE TO A POLICYHOLDER OR COVERED PERSON AT
ANOTHER TIME PROVIDED THAT IN NO EVENT SHALL THE INSURER, ORGANIZATION
OR CORPORATION DELAY OR DENY PAYMENT OF A CLAIM WHEN A POLICYHOLDER OR
COVERED PERSON DOES NOT COMPLETE AND RETURN SUCH COORDINATION OF BENE-
FITS QUESTIONNAIRE.
Upon receipt of the information requested in paragraph two of this
subsection or an appeal of a claim or bill for health care services
denied pursuant to paragraph one of this subsection, an insurer or
organization or corporation licensed OR CERTIFIED pursuant to article
forty-three of this chapter or article forty-four of the public health
law shall comply with subsection (a) of this section.
S 2. Subsection (b) of section 3224-b of the insurance law, as added
by chapter 551 of the laws of 2006, is amended to read as follows:
A. 3167--A 3
(b) Overpayments to [physicians] HEALTH CARE PROVIDERS. (1) Other than
recovery for duplicate payments, a health plan shall provide [thirty
days] written notice to [physicians before engaging in additional over-
payment recovery efforts seeking] HEALTH CARE PROVIDERS OF ITS INTENTION
TO SEEK recovery of the overpayment of claims to such [physicians]
HEALTH CARE PROVIDERS. Such notice shall state the patient name, service
date, payment amount, proposed adjustment, and a reasonably specific
explanation of the proposed adjustment. A HEALTH PLAN SHALL NOT SEEK
RECOVERY FROM A HEALTH CARE PROVIDER UNLESS: THE HEALTH CARE PROVIDER
AGREES TO THE RECOVERY IN WRITING; THE HEALTH CARE PROVIDER FAILS TO
SEND ITS WRITTEN CHALLENGE OF THE HEALTH PLAN'S OVERPAYMENT RECOVERY
WITHIN NINETY DAYS OF RECEIPT OF THE PLAN'S NOTICE OF INTENT TO SEEK
OVERPAYMENT RECOVERY; OR THE OVERPAYMENT RECOVERY HAS BEEN UPHELD
ACCORDING TO PROCEDURES ESTABLISHED BY THE PARTIES IN THEIR CONTRACTUAL
AGREEMENT; OR A THIRD-PARTY ARBITRATOR UPHELD THE OVERPAYMENT RECOVERY.
(2) A HEALTH PLAN SHALL LIMIT OVERPAYMENT RECOVERY EFFORTS TO: BILLING
AND CODING ERRORS; INCORRECT RATE PAYMENTS; INELIGIBILITY OF A PERSON
FOR COVERAGE; OR FRAUD. A HEALTH PLAN SHALL NOT INITIATE OVERPAYMENT
RECOVERY EFFORTS FOR UTILIZATION REVIEW PURPOSES AS DEFINED IN ARTICLE
FORTY-NINE OF THIS CHAPTER OR ARTICLE FORTY-NINE OF THE PUBLIC HEALTH
LAW, IF THE SERVICES WERE ALREADY DEEMED MEDICALLY NECESSARY BY THE
HEALTH PLAN, OR IF THE HEALTH PLAN PREVIOUSLY APPROVED THE MANNER IN
WHICH SERVICES WERE ACCESSED OR PROVIDED.
(3) A HEALTH PLAN SHALL PROVIDE A HEALTH CARE PROVIDER WITH THE OPPOR-
TUNITY TO CHALLENGE THE HEALTH PLAN'S OVERPAYMENT RECOVERY DETERMINATION
AND SHALL ESTABLISH WRITTEN POLICIES AND PROCEDURES, IN ACCORDANCE WITH
THIS SECTION, FOR HEALTH CARE PROVIDERS TO CHALLENGE AN OVERPAYMENT
RECOVERY. THESE WRITTEN POLICIES AND PROCEDURES SHALL INCLUDE A
PROVISION STATING THAT A HEALTH CARE PROVIDER SHALL HAVE NO LESS THAN
NINETY DAYS FROM RECEIPT OF THE HEALTH PLAN'S WRITTEN NOTICE OF INTENT
TO SEEK RECOVERY TO PROVIDE DOCUMENTATION CHALLENGING THE ALLEGED OVER-
PAYMENTS. ANY CHALLENGE TO AN OVERPAYMENT RECOVERY THAT CANNOT BE
RESOLVED BETWEEN THE HEALTH PLAN AND THE HEALTH CARE PROVIDER WITHIN
THIRTY DAYS FROM THE HEALTH PLAN'S RECEIPT OF THE PROVIDER'S DOCUMENTA-
TION SHALL BE RESOLVED ACCORDING TO PROCEDURES ESTABLISHED BY THE
PARTIES IN THEIR CONTRACTUAL AGREEMENT OR SHALL BE SUBMITTED TO A
THIRD-PARTY ARBITRATOR FOR A DETERMINATION.
(4) A health plan shall not initiate overpayment recovery efforts more
than twenty-four months after the original payment was received by a
[physician] HEALTH CARE PROVIDER. [Provided, however, that] HOWEVER, no
such time limit shall apply to overpayment recovery efforts [which] THAT
are: (i) based on a reasonable belief of fraud or other intentional
misconduct, [or abusive billing,] (ii) required by, or initiated at the
request of, a self-insured plan, or (iii) required by a state or federal
government program. Notwithstanding the aforementioned time limitations,
in the event that a [physician] HEALTH CARE PROVIDER asserts that a
health plan has underpaid a claim or claims, the health plan may defend
or set off such assertion of underpayment based on overpayments going
back in time as far as the claimed underpayment. [For purposes of this
paragraph, "abusive billing" shall be defined as a billing practice
which results in the submission of claims that are not consistent with
sound fiscal, business, or medical practices and at such frequency and
for such a period of time as to reflect a consistent course of conduct.
(3)] (5) Nothing in this section shall be deemed to limit [an insur-
er's] A HEALTH PLAN'S right to pursue recovery of overpayments that
occurred prior to the effective date of this section where the insurer
A. 3167--A 4
has provided the [physician] HEALTH CARE PROVIDER with notice of such
recovery efforts prior to the effective date of this section.
(6) A HEALTH PLAN SHALL NOT PURSUE OVERPAYMENT RECOVERY EFFORTS
AGAINST AN INSURED IF THE HEALTH PLAN IS PRECLUDED FROM PURSUING OVER-
PAYMENT RECOVERY EFFORTS AGAINST A HEALTH CARE PROVIDER PURSUANT TO
PARAGRAPH TWO OF THIS SUBSECTION.
(7) A HEALTH PLAN SHALL ASSURE ADHERENCE TO THE REQUIREMENTS STATED IN
THIS SECTION BY ALL CONTRACTORS, SUBCONTRACTORS, SUBVENDORS, AGENTS AND
EMPLOYEES AFFILIATED BY CONTRACT OR OTHERWISE WITH SUCH LICENSED ENTITY.
ALL CONTRACTORS, SUBCONTRACTORS, SUBVENDORS, AGENTS AND EMPLOYEES AFFIL-
IATED BY CONTRACT OR OTHERWISE WITH ANY HEALTH PLAN SHALL ALSO ADHERE TO
THE REQUIREMENTS OF THIS SECTION.
(8) NOTHING IN THIS SECTION SHALL PRECLUDE A HEALTH CARE PROVIDER AND
A HEALTH PLAN FROM AGREEING TO PROVISIONS DIFFERENT FROM THOSE IN THIS
SECTION; PROVIDED, HOWEVER, THAT ANY AGREEMENT THAT PURPORTS TO WAIVE,
LIMIT, DISCLAIM, OR IN ANY WAY DIMINISH THE RIGHTS OF A HEALTH CARE
PROVIDER SET FORTH IN THIS SECTION SHALL BE VOID AS CONTRARY TO PUBLIC
POLICY.
(9) HEALTH CARE PROVIDER SHALL MEAN AN ENTITY LICENSED OR CERTIFIED
PURSUANT TO ARTICLE TWENTY-EIGHT, THIRTY-SIX OR FORTY OF THE PUBLIC
HEALTH LAW, A FACILITY LICENSED PURSUANT TO ARTICLE NINETEEN,
TWENTY-THREE OR THIRTY-ONE OF THE MENTAL HYGIENE LAW, AND A HEALTH CARE
PROFESSIONAL LICENSED, REGISTERED OR CERTIFIED PURSUANT TO TITLE EIGHT
OF THE EDUCATION LAW.
S 3. The insurance law is amended by adding a new section 3240 to read
as follows:
S 3240. COVERAGE OF SERVICES OF PARTICIPATING PROVIDERS. AN INSURER
LICENSED TO WRITE ACCIDENT AND HEALTH INSURANCE, A CORPORATION ORGANIZED
PURSUANT TO ARTICLE FORTY-THREE OF THIS CHAPTER, HEALTH MAINTENANCE
ORGANIZATIONS AND OTHER ORGANIZATIONS CERTIFIED PURSUANT TO ARTICLE
FORTY-FOUR OF THE PUBLIC HEALTH LAW OR A MUNICIPAL COOPERATIVE HEALTH
BENEFITS PLAN CERTIFIED PURSUANT TO ARTICLE FORTY-SEVEN OF THIS CHAPTER
(COLLECTIVELY A "HEALTH PLAN") THAT UTILIZES A NETWORK OF PARTICIPATING
PROVIDERS IN THE DELIVERY AND PROVISION OF HEALTH INSURANCE BENEFITS
SHALL NOT DEEM A HEALTH CARE PROVIDER WHO IS PARTICIPATING IN THE HEALTH
PLAN'S PROVIDER NETWORK AND RENDERING MEDICAL SERVICES TO AN INSURED,
SUBSCRIBER OR ENROLLEE TO BE OUT-OF-NETWORK BECAUSE ONE OR MORE OTHER
HEALTH PROVIDERS RENDERING SERVICES TO THE INSURED, SUBSCRIBER OR ENROL-
LEE FOR THE SAME OR RELATED MEDICAL CONDITION, ILLNESS OR INJURY DOES
NOT PARTICIPATE IN THE HEALTH PLAN'S PROVIDER NETWORK. THE INSURED,
SUBSCRIBER OR ENROLLEE SHALL ONLY BE SUBJECT TO THE IN-NETWORK COST
SHARING PROVISIONS OF THE POLICY OR CERTIFICATE FOR THE SERVICES OF SUCH
PARTICIPATING PROVIDER OR PROVIDERS. FURTHER, THE HEALTH PLAN SHALL PAY
A PARTICIPATING HEALTH CARE PROVIDER OR PROVIDERS THE CONTRACTED RATE
FOR SERVICES PROVIDED BY SUCH PARTICIPATING PROVIDER OR PROVIDERS
REGARDLESS OF THE NETWORK STATUS OF THE OTHER PROVIDERS. HEALTH CARE
PROVIDER SHALL MEAN AN ENTITY LICENSED OR CERTIFIED PURSUANT TO ARTICLE
TWENTY-EIGHT, THIRTY-SIX OR FORTY OF THE PUBLIC HEALTH LAW, A FACILITY
LICENSED PURSUANT TO ARTICLE NINETEEN, TWENTY-THREE OR THIRTY-ONE OF THE
MENTAL HYGIENE LAW, AND A HEALTH CARE PROFESSIONAL LICENSED, REGISTERED
OR CERTIFIED PURSUANT TO TITLE EIGHT OF THE EDUCATION LAW.
S 4. Section 2406 of the insurance law is amended by adding a new
subsection (a-1) to read as follows:
(A-1) (1) IF, AFTER COMPLETION OF AN INVESTIGATION INVOLVING INFORMA-
TION COLLECTED FROM A SIX MONTH PERIOD, NOTICE AND HEARING, THE SUPER-
INTENDENT FINDS THAT THE PERSON COMPLAINED OF HAS ENGAGED IN A SERIES OF
A. 3167--A 5
ACTS PROHIBITED BY SECTION THREE THOUSAND TWO HUNDRED TWENTY-FOUR-A OF
THIS CHAPTER THAT, TAKEN TOGETHER, CONSTITUTE A CONSISTENT PATTERN OR
PRACTICE, THE SUPERINTENDENT IS AUTHORIZED TO LEVY A CIVIL PENALTY
AGAINST SUCH PERSON IN THE FOLLOWING MANNER:
(A) FOR THE FIRST FINDING OF A CONSISTENT PATTERN OR PRACTICE, THE
SUPERINTENDENT MAY LEVY A FINE OF NOT MORE THAN ONE HUNDRED THOUSAND
DOLLARS.
(B) FOR A SECOND FINDING OF A CONSISTENT PATTERN OR PRACTICE THAT
OCCURS ON OR EARLIER THAN TWO YEARS FROM THE FIRST OFFENSE THE SUPER-
INTENDENT MAY LEVY A FINE OF NOT MORE THAN THREE HUNDRED THOUSAND
DOLLARS.
(C) FOR A THIRD FINDING OF A CONSISTENT PATTERN OR PRACTICE THAT
OCCURS ON OR EARLIER THAN FIVE YEARS AFTER A FIRST OFFENSE, THE SUPER-
INTENDENT MAY LEVY A FINE OF NOT MORE THAN ONE MILLION DOLLARS.
(2) IN DETERMINING THE AMOUNT OF A FINE TO BE LEVIED WITHIN THE SPECI-
FIED LIMITS, THE SUPERINTENDENT SHALL CONSIDER THE FOLLOWING FACTORS:
(A) THE EXTENT AND FREQUENCY OF THE VIOLATIONS;
(B) WHETHER THE VIOLATIONS WERE DUE TO CIRCUMSTANCES BEYOND THE INSUR-
ER, ORGANIZATION OR CORPORATION'S CONTROL;
(C) ANY REMEDIAL ACTIONS TAKEN BY THE INSURER, ORGANIZATION OR CORPO-
RATION TO PREVENT FUTURE VIOLATIONS;
(D) THE ACTUAL OR POTENTIAL HARM TO OTHERS RESULTING FROM THE
VIOLATIONS;
(E) IF THE INSURER, ORGANIZATION OR CORPORATION KNOWINGLY AND WILLING-
LY COMMITTED THE VIOLATIONS;
(F) THE INSURER, ORGANIZATION OR CORPORATION'S FINANCIAL CONDITION;
AND
(G) ANY OTHER FACTORS THE SUPERINTENDENT CONSIDERS APPROPRIATE.
S 5. This act shall take effect immediately.