NY State Senate Bill 2009-S5218

Senate Bill S5218

2009-2010 Legislative Session

Provides for the annual audits of health maintenance organizations, health insurers and health and hospital service corporations

download bill text pdf

Archive: Last Bill Status - In Senate Committee Insurance Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 06, 2010	referred to insurance
Apr 27, 2009	referred to insurance

2009-S5218 (ACTIVE) - Details

Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Amd §§3217-a, 4324 & 210, Ins L; amd §4408, Pub Health L

2009-S5218 (ACTIVE) - Summary

Provides for the annual audits of health maintenance organizations, health insurers and health and hospital service corporations; provides for a private right of action.

2009-S5218 (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S5218

 TITLE OF BILL :
An act to amend the insurance law and the public health law, in
relation to annual audits of health maintenance organizations, health
insurers and health and hospital service corporations


 PURPOSE OR GENERAL IDEA OF BILL :
To provide greater disclosure to managed care consumers and enhanced
enforcement of current requirements on health care plans.

 SUMMARY OF SPECIFIC PROVISIONS :
Section one adds two new subsections (e) and (f) to section 3217-a of
the Insurance Law to: 1) require the health commissioner and insurance
superintendent to audit insurers and HMOs for compliance with various
consumer protection provisions of the Public Health and Insurance Law;
2) adds the results of the audits to the state Insurance Department
(SID) consumer guide on managed care plans and health insurers; and 3)
authorizes the SID to require insurers and HMOs not in compliance with
the law to undergo prior approval for rate increase requests rather
than "file and use" rates.

Section two adds two new subsections to section 4324 of the insurance
law to make the same change described in section one. Section three
amends section 210 of the insurance law to require HMOs and insurers

to report loss ratios on certain product lines, and requires the
superintendent to include such information and information on
compliance with various provisions of the Insurance and Public Health
laws in the annual consumer guide to health insurance.

Section four also amends section 4408 of the Public Health Law to
require the disclosure described in section one and to add the
enforcement provisions described in section one. Section five sets
forth the effective date.

 JUSTIFICATION :
Chapter 705 of the laws of 1996, modeled on legislation approved by
the Assembly the three previous years, contains comprehensive managed
care consumer protections that are among the most sweeping of any
state in the nation. The new law provides enhanced disclosure, special
provisions to enable patients with serious medical problems to access
specialty care, requires plans to establish formal grievance
procedures for their enrollees, requires that Utilization Review (UR)
agents obtain licenses and meet quality standards and allow enrollees
to appeal UR decisions. Chapters 637 and 666 of 1997 set out standards
for the payment of claims to consumers and providers. Chapter 586 of
the laws 1998 authorizes consumers to appeal medical denials to
outside review boards. The bill would enhance the protections in the
current law in several ways. First, the bill would improve the quality
of information consumers are entitled to receive and thus improve
their ability to make informed decisions on plans based on their
compliance with consumer protection laws. Second, a number of recent
studies by the Attorney General and consumer groups concluded that
compliance with the requirements in the law by health care plans is
abysmal. This bill would require the departments of Insurance and
Health to aggressively monitor compliance with the law and provide
stiff new penalties for those plans which don't.

 FISCAL IMPLICATIONS :
None.

 EFFECTIVE DATE :
Immediately.

2009-S5218 (ACTIVE) - Bill Text download pdf

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

                                  5218

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                             April 27, 2009
                               ___________

Introduced  by  Sen. KRUEGER -- read twice and ordered printed, and when
  printed to be committed to the Committee on Insurance

AN ACT to amend the insurance law and the public health law, in relation
  to annual audits of health maintenance organizations, health  insurers
  and health and hospital service corporations

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

  Section 1. Subsection (e) of section 3217-a of the  insurance  law  is
relettered  subsection (g) and two new subsections (e) and (f) are added
to read as follows:
  (E) THE DEPARTMENT SHALL ON AN ANNUAL BASIS:
  (1) AUDIT EVERY INSURER SUBJECT TO THIS ARTICLE  FOR  COMPLIANCE  WITH
THE  PROVISIONS  OF THIS SECTION, CHAPTER SEVEN HUNDRED FIVE OF THE LAWS
OF NINETEEN HUNDRED NINETY-SIX, CHAPTER FIVE HUNDRED EIGHTY-SIX  OF  THE
LAWS   OF   NINETEEN  HUNDRED  NINETY-EIGHT  AND  CHAPTERS  SIX  HUNDRED
THIRTY-SEVEN AND SIX HUNDRED SIXTY-SIX OF THE LAWS OF  NINETEEN  HUNDRED
NINETY-SEVEN;
  (2) INVESTIGATE THE PROFICIENCY OF EVERY INSURER SUBJECT TO THIS ARTI-
CLE IN FURNISHING ACCURATE INFORMATION IN RESPONSE TO INQUIRIES; AND
  (3) PUBLISH THE RESULTS OF SUCH AUDITS AND INVESTIGATIONS IN THE ANNU-
AL CONSUMER GUIDE DESCRIBED IN SECTION TWO HUNDRED TEN OF THIS CHAPTER.
  (F) ANY INSURER SUBJECT TO THIS ARTICLE WHICH FAILS TO COMPLY WITH THE
REQUIREMENTS  OF THIS SECTION, CHAPTER SEVEN HUNDRED FIVE OF THE LAWS OF
NINETEEN HUNDRED NINETY-SIX, CHAPTER FIVE HUNDRED EIGHTY-SIX OF THE LAWS
OF NINETEEN HUNDRED NINETY-EIGHT AND CHAPTERS SIX  HUNDRED  THIRTY-SEVEN
AND  SIX HUNDRED SIXTY-SIX OF THE LAWS OF NINETEEN HUNDRED NINETY-SEVEN,
OR WHICH EXHIBITS A PATTERN  OF  FURNISHING  INACCURATE,  INCOMPLETE  OR
MISLEADING  INFORMATION  IN  RESPONSE TO INQUIRIES SHALL, IN ADDITION TO
ANY OTHER PENALTIES WHICH MAY APPLY, BE BARRED FROM USING  THE  ALTERNA-
TIVE  PROCEDURE  FOR ADJUSTING PREMIUMS SET FORTH IN SUBPARAGRAPH (A) OF
PARAGRAPH TWO OF SUBSECTION (E) OF SECTION THREE  THOUSAND  TWO  HUNDRED

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD09746-01-9

S. 5218                             2

THIRTY-ONE OF THIS ARTICLE FOR A PERIOD OF ONE YEAR, OR UNTIL THE SUPER-
INTENDENT FINDS THAT SUCH INSURER IS IN COMPLIANCE WITH THE REQUIREMENTS
OF  THIS SECTION AND ROUTINELY PROVIDES ACCURATE RESPONSES TO INQUIRIES,
WHICHEVER OCCURS LATER.
  S 2. Subsection (e) of section 4324 of the insurance law is relettered
subsection  (g) and two new subsections (e) and (f) are added to read as
follows:
  (E) THE DEPARTMENT SHALL ON AN ANNUAL BASIS:
  (1) AUDIT EVERY CORPORATION SUBJECT TO  THIS  ARTICLE  FOR  COMPLIANCE
WITH  THE  PROVISIONS OF THIS SECTION, CHAPTER SEVEN HUNDRED FIVE OF THE
LAWS OF NINETEEN HUNDRED NINETY-SIX, CHAPTER FIVE HUNDRED EIGHTY-SIX  OF
THE LAWS OF NINETEEN HUNDRED NINETY-EIGHT AND CHAPTERS SIX HUNDRED THIR-
TY-SEVEN AND SIX HUNDRED SIXTY-SIX OF THE LAWS OF NINETEEN HUNDRED NINE-
TY-SEVEN;
  (2)  INVESTIGATE  THE PROFICIENCY OF EVERY CORPORATION SUBJECT TO THIS
ARTICLE IN FURNISHING ACCURATE INFORMATION IN RESPONSE TO INQUIRIES; AND
  (3) PUBLISH THE RESULTS OF SUCH AUDITS AND INVESTIGATIONS IN THE ANNU-
AL CONSUMER GUIDE DESCRIBED IN SECTION TWO HUNDRED TEN OF THIS CHAPTER.
  (F) ANY CORPORATION SUBJECT TO THIS ARTICLE WHICH FAILS TO COMPLY WITH
THE REQUIREMENTS OF THIS SECTION, CHAPTER SEVEN HUNDRED FIVE OF THE LAWS
OF NINETEEN HUNDRED NINETY-SIX, CHAPTER FIVE HUNDRED EIGHTY-SIX  OF  THE
LAWS   OF   NINETEEN  HUNDRED  NINETY-EIGHT  AND  CHAPTERS  SIX  HUNDRED
THIRTY-SEVEN AND SIX HUNDRED SIXTY-SIX OF THE LAWS OF  NINETEEN  HUNDRED
NINETY-SEVEN  OR  WHICH  EXHIBITS  A  PATTERN  OF FURNISHING INACCURATE,
INCOMPLETE OR MISLEADING INFORMATION IN RESPONSE TO INQUIRIES SHALL,  IN
ADDITION  TO  ANY  OTHER PENALTIES WHICH MAY APPLY, BE BARRED FROM USING
THE ALTERNATIVE PROCEDURE FOR ADJUSTING PREMIUMS SET FORTH IN SUBSECTION
(G) OF SECTION FOUR THOUSAND THREE HUNDRED EIGHT OF THIS ARTICLE  FOR  A
PERIOD  OF ONE YEAR, OR UNTIL THE SUPERINTENDENT OF INSURANCE FINDS THAT
SUCH CORPORATION IS IN COMPLIANCE WITH THE REQUIREMENTS OF THIS  SECTION
AND ROUTINELY PROVIDES ACCURATE RESPONSES TO INQUIRIES, WHICHEVER OCCURS
LATER.
  S 3. Subsection (b) of section 210 of the insurance law, as amended by
chapter 579 of the laws of 1998, is amended to read as follows:
  (b)  Beginning September first, nineteen hundred ninety-nine and annu-
ally thereafter, the superintendent shall include  in  such  guide,  and
insurers  and  entities  certified pursuant to article forty-four of the
public health law shall provide to the  superintendent  the  information
required for such guide in a timely fashion, the following information:
  (1)  The  number  of  grievances  filed pursuant to section forty-four
hundred eight-a of the public health law or article forty-eight of  this
chapter  and  the number of such grievances in which an adverse determi-
nation of the insurer or entity was reversed in whole or in part  versus
the number of such determinations which were upheld; [and]
  (2)  The  number of appeals to utilization review determinations which
were filed pursuant to article forty-nine of the public  health  law  or
article forty-nine of this chapter and the number of such determinations
which  were reversed versus the number of such determinations which were
upheld[.];
  (3) THE LOSS RATIOS INCURRED, FOR  THE  PREVIOUS  YEAR,  ON  CONTRACTS
ISSUED  PURSUANT  TO SECTIONS FOUR THOUSAND THREE HUNDRED TWENTY-ONE AND
FOUR THOUSAND THREE HUNDRED TWENTY-TWO OF THIS CHAPTER; AND
  (4) EACH INSURER OR ENTITY'S DEGREE OF COMPLIANCE WITH THE  PROVISIONS
OF   CHAPTER  SEVEN  HUNDRED  FIVE  OF  THE  LAWS  OF  NINETEEN  HUNDRED
NINETY-SIX, CHAPTER FIVE HUNDRED EIGHTY-SIX  OF  THE  LAWS  OF  NINETEEN

S. 5218                             3

HUNDRED  NINETY-EIGHT  AND  CHAPTERS  SIX  HUNDRED  THIRTY-SEVEN AND SIX
HUNDRED SIXTY-SIX OF THE LAWS OF NINETEEN HUNDRED NINETY-SEVEN.
  S  4. Section 4408 of the public health law is amended by adding a new
subdivision 7 to read as follows:
  7. (A) THE DEPARTMENT, IN COOPERATION WITH THE  DEPARTMENT  OF  INSUR-
ANCE, SHALL, ON AN ANNUAL BASIS:
  (I)  AUDIT  EVERY  HEALTH MAINTENANCE ORGANIZATION FOR COMPLIANCE WITH
THE PROVISIONS OF THIS SECTION, CHAPTER SEVEN HUNDRED FIVE OF  THE  LAWS
OF  NINETEEN  HUNDRED NINETY-SIX, CHAPTER FIVE HUNDRED EIGHTY-SIX OF THE
LAWS  OF  NINETEEN  HUNDRED  NINETY-EIGHT  AND  CHAPTERS   SIX   HUNDRED
THIRTY-SEVEN  AND  SIX HUNDRED SIXTY-SIX OF THE LAWS OF NINETEEN HUNDRED
NINETY-SEVEN;
  (II)  INVESTIGATE  THE  PROFICIENCY  OF  EVERY  SUCH  ORGANIZATION  IN
FURNISHING ACCURATE INFORMATION IN RESPONSE TO INQUIRIES; AND
  (III)  PUBLISH  THE  RESULTS  OF SUCH AUDITS AND INVESTIGATIONS IN THE
ANNUAL CONSUMER GUIDE DESCRIBED IN SECTION TWO HUNDRED TEN OF THE INSUR-
ANCE LAW.
  (B) ANY HEALTH MAINTENANCE ORGANIZATION WHICH FAILS TO COMPLY WITH THE
REQUIREMENTS OF THIS SECTION, CHAPTER SEVEN HUNDRED FIVE OF THE LAWS  OF
NINETEEN HUNDRED NINETY-SIX, CHAPTER FIVE HUNDRED EIGHTY-SIX OF THE LAWS
OF  NINETEEN  HUNDRED NINETY-EIGHT AND CHAPTERS SIX HUNDRED THIRTY-SEVEN
AND SIX HUNDRED SIXTY-SIX OF THE LAWS OF NINETEEN  HUNDRED  NINETY-SEVEN
OR  WHICH  EXHIBITS  A  PATTERN  OF FURNISHING INACCURATE, INCOMPLETE OR
MISLEADING INFORMATION IN RESPONSE TO INQUIRIES SHALL,  IN  ADDITION  TO
ANY  OTHER  PENALTIES WHICH MAY APPLY, BE BARRED FROM USING THE ALTERNA-
TIVE PROCEDURE FOR ADJUSTING PREMIUMS SET FORTH  IN  SUBSECTION  (G)  OF
SECTION  FOUR  THOUSAND  THREE  HUNDRED EIGHT OF THE INSURANCE LAW FOR A
PERIOD OF ONE YEAR, OR UNTIL THE COMMISSIONER FINDS THAT SUCH  ORGANIZA-
TION IS IN COMPLIANCE WITH THE REQUIREMENTS OF THIS SECTION AND ROUTINE-
LY PROVIDES ACCURATE RESPONSES TO INQUIRIES, WHICHEVER OCCURS LATER.
  S 5. This act shall take effect immediately.

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