BILL NUMBER:  S1399

 TITLE OF BILL :
An act to amend the insurance law, in relation to imposing certain
limits, requirements and prohibitions regarding the seeking of refunds
by certain insurers, organizations or corporations from health care
providers


 PURPOSE :
To protect physicians and other health care providers from HMOs and
insurers seeking refunds from them many months or years after payment
is made to such provider for care rendered.

 SUMMARY OF PROVISIONS :
Amends section 3224-a of the insurance law by adding a new subsection
(b-l). This new section would require that insurers have no more than
180 days to file for a refund in the case of a fraudulent claim, with
written notice explaining the reason for the refund. Furthermore, this
new section requires insurers seeking refunds to provide the health
care provider with written notice that explains in detail the reasons
for the refund and provides the provider with opportunity to challenge
the refund results. Written notice shall be made in not less than
thirty days prior to the seeking of a refund or the making of
adjustments.

              

 JUSTIFICATION :
Currently, New York State's Prompt Payment Law requires HMOs and other
insurers to pay undisputed physician and other provider claims within
45 days after they are received by such HMO or insurer. However, one
manner by which HMOs and insurers have frequently attempted to skirt
this requirement has been to make payment on the claim to the provider
within the 45 day time limit, but then seek a refund of such payment,
claiming it was an overpayment or an improper payment. These attempted
refunds are sought months and, at times, years after payment is made
to the physician or other provider. These refund requests can be for
thousands of dollars, and can present an enormous financial hardship
for individual physicians, particularly small and sole physician
practices. Currently, there is virtually no limitation in law to these
refund requests, except for the six-year statute of limitations
applicable to all contracts in New York State. Certainly, should an
insurer suspect that the claim was submitted fraudulently, such
insurer should have an opportunity to seek redress and a refund.
However, these refund requests go well beyond reviewing previously
paid claims for detecting fraud, and are being used to essentially
permit health plans to avoid compliance with the Prompt Payment Law.
This legislation would address this problem and strike an appropriate
balance between permitting insurers to ensure proper review of claims,
while at the same time giving physicians and other providers the
security of knowing that they will not have to be coerced to pay
potentially tens of thousands of dollars in inappropriate refund
requests so that the insurer can evade the prompt payment law.

 LEGISLATIVE HISTORY :
S.109/A.6058 of 2007/2007; Referred to Senate Insurance Committee.
S.1987/A.3106 of 2005/2006; Referred to Senate Insurance Committee.
S.3015A/A/8941A of 2003/2004; Referred to Senate Insurance Committee.

 FISCAL IMPLICATIONS :
None.

 EFFECTIVE DATE :
Immediately and shall not apply to any agreement executed on or before
such date.