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

                                  9769

                          I N  A S S E M B L Y

                            January 26, 2010
                               ___________

Introduced  by  M.  of  A. BING, JOHN, PAULIN, BENJAMIN, REILLY, JAFFEE,
  SKARTADOS, CASTRO -- Multi-Sponsored by -- M. of A. CHRISTENSEN, COOK,
  GALEF, KOON, MAGEE, M. MILLER, PHEFFER, SPANO, SWEENEY  --  read  once
  and referred to the Committee on Insurance

AN  ACT  to amend the insurance law, in relation to the rights of health
  care providers under managed care contracts,  rules  relating  to  the
  processing of health claims, and alleged overpayments to physicians

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

  Section 1. Subsection (a) of section 3224-a of the insurance  law,  as
amended  by  chapter  237  of  the  laws  of 2009, is amended to read as
follows:
  (a) Except in a case where the obligation of an insurer or  an  organ-
ization or corporation licensed TO WRITE ACCIDENT OR HEALTH INSURANCE OR
LICENSED  or certified pursuant to article forty-three or forty-seven 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
("covered person") or make a payment to a health care  provider  is  not
reasonably  clear,  or  when  there  is  a reasonable basis supported by
specific information available for review  by  the  superintendent  that
such claim or bill for health care services rendered was submitted frau-
dulently,  such  insurer  or  organization  or corporation shall pay the
claim to a policyholder or covered person or make a payment to a  health
care  provider  within  thirty  days  of  receipt of a claim or bill for
services rendered that is transmitted via  the  internet  or  electronic
mail,  or  [forty-five]  THIRTY  days  of receipt of a claim or bill for
services rendered that is submitted by other means,  such  as  paper  or
facsimile.  AN  INSURER  OR  AN  ORGANIZATION OR CORPORATION LICENSED TO
WRITE ACCIDENT OR HEALTH INSURANCE OR LICENSED OR CERTIFIED PURSUANT  TO
ARTICLE  FORTY-THREE OF THIS CHAPTER OR ARTICLE FORTY-FOUR OF THE PUBLIC
HEALTH LAW SHALL MAKE PAYMENT WITHIN FIFTEEN DAYS OF RECEIPT  FOR  ELEC-
TRONICALLY  SUBMITTED  CLAIMS. A HEALTH CARE PROVIDER WHO SUBMITS CLAIMS
ELECTRONICALLY SHALL HAVE THE OPTION OF GETTING PAID ELECTRONICALLY.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD03357-03-0
              

A. 9769                             2

  S 2. Section 3224-b of the insurance law, as added by chapter  551  of
the  laws  of 2006, subsection (b) as amended by chapter 237 of the laws
of 2009, is amended to read as follows:
  S  3224-b.  Rules  relating  to THE RIGHTS OF PHYSICIANS UNDER MANAGED
CARE CONTRACTS, the  processing  of  health  claims  and  [overpayments]
PAYMENTS  to  physicians.  (a)  [Processing  of health care claims. This
subsection is intended to provide  uniformity  and  consistency  in  the
reporting of medical services and procedures as they relate to the proc-
essing  of  health care claims and is not intended to dictate reimburse-
ment policy] ALL AGREEMENTS BETWEEN HEALTH PLANS AND PHYSICIANS FOR  THE
DELIVERY  OF  MEDICAL SERVICES TO HEALTH PLAN BENEFICIARIES MUST CONTAIN
AND CONFORM TO THIS SECTION'S RULES WITH RESPECT TO THE RIGHTS OF PHYSI-
CIANS UNDER MANAGED CARE CONTRACTS.
  (1) For purposes of this section, a "health plan" shall be defined  as
an  insurer  that is licensed to write accident and health insurance, or
that is licensed pursuant to article forty-three of this chapter  or  is
certified pursuant to article forty-four of the public health law.
  (2)  ALL  CONTRACTS,  INCLUDING  AMENDMENTS THERETO, MUST BE SIGNED BY
BOTH PARTIES AND SHALL HAVE ATTACHED A COMPLETE FEE SCHEDULE APPROPRIATE
TO THE PHYSICIAN'S SPECIALTY.
  (3) NO CONTRACT MAY COMPEL THE PHYSICIAN TO PARTICIPATE IN ANY  FUTURE
PRODUCTS OFFERED BY THE PAYER.
  (4)  AN  INSURER  MAY  ONLY TERMINATE THE CONTRACT PRIOR TO THE AGREED
UPON DATE OF EXPIRATION ON A FOR CAUSE BASIS. REFUSAL TO SIGN A CONTRACT
AMENDMENT SHALL NOT BE DEEMED CAUSE FOR TERMINATION.
  (5) THERE SHALL BE A MINIMUM OF ONE HUNDRED FIFTY DAYS ADVANCED  WRIT-
TEN NOTICE OF A CONTRACT'S NON-RENEWAL.
  (6)  INSURERS  SHALL  PROVIDE PHYSICIANS WITH A MINIMUM OF NINETY DAYS
ADVANCED WRITTEN NOTICE OF CHANGES IN  POLICIES  AND  PROCEDURES  EXCEPT
WHERE  SUCH  POLICY  OR  PROCEDURE  CHANGE RESULTS IN A MATERIAL ADVERSE
IMPACT ON A PHYSICIAN'S ADMINISTRATIVE COSTS OR ON THE  INSURER'S  TOTAL
AGGREGATE  LEVEL  OF PAYMENT TO A PHYSICIAN, IN WHICH CASE SUCH A CHANGE
MAY ONLY BE EFFECTUATED THROUGH A CONTRACT AMENDMENT.
  (7) INSURERS MAY NOT ASSIGN, LEASE OR CONVEY RIGHTS IN A CONTRACT WITH
THE PHYSICIAN TO AN UNRELATED  PARTY  WITHOUT  THE  PHYSICIAN'S  WRITTEN
CONSENT  IN EACH INSTANCE OF SUCH PROPOSED ASSIGNMENT, LEASE, OR CONVEY-
ANCE UNLESS SUCH ASSIGNMENT, LEASE, OR CONVEYANCE IS TO A PARENT, AFFIL-
IATE, OR SUBSIDIARY CORPORATION OR TO A TRANSFEREE OF  ALL  OR  SUBSTAN-
TIALLY ALL OF SUCH INSURER'S ASSETS.
  (8)  INSURERS  SHALL INDEMNIFY A PHYSICIAN FOR ANY DAMAGES FOR MEDICAL
LIABILITY RESULTING FROM  THE  PHYSICIAN'S  COMPLIANCE  WITH  A  PAYER'S
UTILIZATION REVIEW DECISIONS.
  (9)  (A)  INSURERS  SHALL UTILIZE CURRENT ICD-9-CM DIAGNOSES CODES AND
CURRENT PROCEDURAL TERMINOLOGY (CPT) PROCEDURE CODES TO DESCRIBE  PHYSI-
CIAN SERVICES RENDERED FOR PROCESSING CLAIMS RELATED THERETO FOR PAYMENT
APPLYING  OFFICIAL  CODING RULES AND GUIDELINES INCLUDING THOSE APPLYING
TO BUNDLING AND UNBUNDLING OF CODES AND SERVICES.
  (B) Subject to  the  provisions  of  paragraph  [three]  TEN  of  this
subsection,  a  health  plan shall accept and initiate the processing of
all health care claims submitted by a physician pursuant to and consist-
ent with the current  version  of  the  American  medical  association's
current  procedural  terminology  (CPT)  codes, reporting guidelines and
conventions and the centers for medicare and medicaid  services  health-
care common procedure coding system (HCPCS) INCLUDING BUNDLED AND UNBUN-
DLED SERVICES.

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  [(3)]  (10)  Nothing in this section shall preclude a health plan from
determining that any such claim is not eligible for payment, in full  or
in part, based on a determination that: (i) the claim is not complete as
defined  by  11  NYCRR  217;  (ii) the service provided is not a covered
benefit under the contract or agreement, including but not limited to, a
determination  that such service is not medically necessary or is exper-
imental or investigational; (iii) the insured did not obtain a referral,
pre-certification or satisfy any other condition  precedent  to  receive
covered  benefits  from  the physician; (iv) the covered benefit exceeds
the benefit limits of the contract or agreement; (v) the person  is  not
eligible  for  coverage or is otherwise not compliant with the terms and
conditions of his or her contract; (vi) another insurer, corporation  or
organization  is  liable for all or part of the claim; or (vii) the plan
has a reasonable suspicion of fraud or abuse. [In addition,  nothing  in
this  section  shall  be deemed to require a health plan to pay or reim-
burse a claim, in full or in part, or dictate the amount of a  claim  to
be paid by a health plan to a physician.
  (4)]  (11) Every health plan shall publish on its provider website and
in its provider newsletter the name of the commercially available claims
editing software product that the health plan utilizes and  any  signif-
icant edits, as determined by the health plan, added to the claims soft-
ware product after the effective date of this section, which are made at
the  request of the health plan. The health plan shall also provide such
information upon the written request of a physician who is a participat-
ing physician in the health plan's provider network.
  (b) Overpayments to health care providers. (1) Other than recovery for
duplicate payments, a health plan  shall  provide  thirty  days  written
notice  to  health care providers before engaging in additional overpay-
ment recovery efforts seeking recovery of the overpayment of  claims  to
such  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.
  (2) A health plan shall provide a health care provider with the oppor-
tunity  to  challenge  an overpayment recovery, including the sharing of
claims information, and shall establish written policies and  procedures
for  health  care providers to follow to challenge an overpayment recov-
ery. Such challenge shall set forth the specific grounds  on  which  the
provider is challenging the overpayment recovery.
  (3) A health plan shall not initiate overpayment recovery efforts more
than  twenty-four  months  after  the original payment was received by a
health care provider. However, no such time limit shall apply  to  over-
payment  recovery  efforts 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  or  authorized  by  a  state  or federal government program or
coverage that is provided by this state or a municipality thereof to its
respective employees, retirees or members. Notwithstanding the aforemen-
tioned time limitations, in  the  event  that  a  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 over-
payments 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  A PHYSICIAN'S sound fiscal, business, or medical prac-
tices and at such frequency and for such a period of time as to  reflect
a consistent course of conduct.  EVERY INSTANCE OF ALLEGED ABUSIVE BILL-

A. 9769                             4

ING  SHALL BE SUBSTANTIATED BY A REVIEW OF THE MEDICAL RECORD PERTAINING
TO EACH CLAIM FOR WHICH FINANCIAL RECOVERY IS SOUGHT. WHEN  THERE  IS  A
DISPUTE  BETWEEN  AN  INSURER  AND PHYSICIAN OVER WHETHER OR NOT A CLAIM
CONSTITUTES ABUSIVE BILLING, IT SHALL BE REFERRED TO AND RESOLVED BY THE
INDEPENDENT  DISPUTE  RESOLUTION  REVIEW BOARD AS SPECIFIED IN PARAGRAPH
EIGHT OF THIS SUBSECTION. NOTWITHSTANDING ANY LIMITATIONS  WRITTEN  INTO
EXISTING  CONTRACTS  BETWEEN  AN INSURER AND A PHYSICIAN, PHYSICIANS MAY
OFFSET SUCH INSURER OVERPAYMENT  CLAIMS  WITH  INSTANCES  OF  DOCUMENTED
UNDERPAYMENT DURING THE PERIOD IN QUESTION.
  (4)  For the purposes of this subsection the term "health care provid-
er" shall mean an entity licensed or certified pursuant to article twen-
ty-eight, thirty-six or forty of  the  public  health  law,  a  facility
licensed  pursuant  to article nineteen, thirty-one or thirty-two of the
mental hygiene law, or a health care professional  licensed,  registered
or certified pursuant to title eight of the education law.
  (5)  [Nothing in this section shall be deemed to limit a health plan's
right to pursue recovery of overpayments  that  occurred  prior  to  the
effective  date  of  this section where the health plan has provided the
health care provider with notice of such recovery efforts prior  to  the
effective  date  of  this  section.] ALL CLAIMS FOR ALLEGED OVERPAYMENTS
SHALL BE BASED ON AUDITS OF MEDICAL RECORDS FOR EACH CLAIM FOR WHICH  AN
OVERPAYMENT  IS  ALLEGED  AND  MAY  NOT BE EXTRAPOLATED FROM A SAMPLE OF
CLAIMS.
  (6)  INSURERS  MAY  NOT  RECOUP  CLAIMED  OVERPAYMENTS  BY  OFFSETTING
REIMBURSEMENT OWED FOR SERVICES RENDERED TO OTHER PATIENTS.
  (7)  WHERE  THE  INSURER  HAS CONFIRMED THE ELIGIBILITY OF A PATIENT'S
COVERAGE PRIOR TO THE PROVISION OF SERVICES BY A PHYSICIAN WHO  IN  GOOD
FAITH RELIED UPON SUCH INSURER VERIFICATION, INSURER MAY NOT SUBSEQUENT-
LY  SEEK  FINANCIAL RECOVERY FROM A PHYSICIAN FOR SUCH RENDERED SERVICES
ON THE GROUNDS THAT THE PATIENT WAS NOT COVERED BY THE INSURER.
  (8) INSURERS SHALL PAY PHYSICIANS THE AVERAGE SALES PRICE (ASP) FORMU-
LA ESTABLISHED BY THE CENTERS FOR MEDICARE  &  MEDICAID  SERVICES  (CMS)
PURSUANT  TO  SECTION  1847A OF THE SOCIAL SECURITY ACT, FOR THE COST OF
ACQUIRING COVERED VACCINES, BIOLOGICALS, AND  OTHER  INJECTABLE  MEDICA-
TIONS.
  (9)  INSURERS  SHALL  NOT  REDUCE  THE LEVEL OF ICD-9-CM/CPT CODES FOR
BILLED COVERED SERVICES WITHOUT FIRST PERFORMING AN AUDIT REVIEW OF  ALL
THE PERTINENT PATIENT MEDICAL RECORDS.
  (10)  THE SUPERINTENDENT SHALL ESTABLISH AN INDEPENDENT DISPUTE RESOL-
UTION REVIEW BOARD WITHIN  OR  UNDER  THE  AUSPICES  OF  THE  DEPARTMENT
AUTHORIZED  TO  HEAR  AND  RESOLVE  INSURER-PHYSICIAN  BILLING  DISPUTES
BROUGHT BY EITHER THE INSURER OR THE PHYSICIAN. THE SUPERINTENDENT SHALL
ESTABLISH A CASE ADMINISTRATION FEE TO COVER THE COST  INCURRED  BY  THE
DISPUTE  REVIEW BOARD (INCLUDING EXPERT ICD-9-CM/CPT CODING CONSULTANTS)
IN REVIEWING AND DECIDING A BILLING DISPUTE. THIS FEE IS TO BE BORNE  BY
THE PARTY WHO LOSES THE DISPUTE DECISION.
  (11) INSURERS THAT SELL HEALTH SAVINGS ACCOUNTS PRODUCTS AS DEFINED IN
26 USC 223 SHALL CREATE AND MAINTAIN AN INTERNET WEB SITE CONTAINING THE
LISTING  OF  INDIVIDUAL  COSTS OF PARTICULAR MEDICAL SERVICES AND PROCE-
DURES INCLUDING USUAL, CUSTOMARY AND REASONABLE CHARGES  FOR  PHYSICIANS
AND  HOSPITALS  REFERENCING  UPDATED CURRENT PROCEDURE TERMINOLOGY (CPT)
CODES AND SHALL MAKE AUTOMATED ACCESS TO CURRENT PATIENT HEALTH  SAVINGS
ACCOUNTS DEDUCTIBLE INFORMATION AVAILABLE TO PHYSICIANS AND PATIENTS.
  S  3.  This  act  shall take effect immediately and shall apply to all
contracts entered into, renewed (automatically or  otherwise),  modified
or amended on or after such date.