NY State Senate Bill 2009-S7475

Senate Bill S7475

2009-2010 Legislative Session

Relates to standards for prompt, fair and equitable settlement of claims for health care and payments for health care services

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
Apr 14, 2010	referred to insurance

2009-S7475 (ACTIVE) - Details

See Assembly Version of this Bill:: A9718
Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Amd §§3224-a, 3224-b & 2406, add §3240, Ins L

2009-S7475 (ACTIVE) - Summary

Relates to standards for prompt, fair and equitable settlement of claims for health care and payments for health care services; prohibits insurers from seeking refunds after 24 months; provides for civil fines for a finding of a pattern or practice of prohibited acts relating to payment of claims.

2009-S7475 (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S7475

 TITLE OF BILL :
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


 PURPOSE OR GENERAL IDEA OF THE BILL :
To provide for a set of minimum fair business practice standards that
will ensure that health care providers are properly compensated for
any medical services rendered in a timely manner and that disputed
claims are addressed and settled within a mutually agreed upon
framework. This legislation also provides that a health insurance plan
cannot deem an in-network health care provider to be out-of-network
because another provider rendering services to an insured for the same
or related condition is out-of-network.

 SUMMARY OF SPECIFIC PROVISIONS :
Section one amends subsections (a) and (b) of section 3224-a of the
insurance law, as amended by chapter 666 of the laws of 1997.

Prompt pay timeframes are shortened from the current 45 day
requirement. Claims submitted electronically must be paid within 15
days while paper claims must be paid within thirty days. Further, the
current prompt pay statute is amended to reduce the amount of time

within which the plan must request additional information to
adjudicate a claim. For claims submitted electronically, the plan must
request additional information within 15 days.

The section further states that a health plan may not deny payment for
a claim for medically necessary, covered services on the basis of an
administrative or technical defect. Providers and health plans can
agree to provisions different than those listed in the section;
however such agreement may not limit or diminish the rights of a
provider in any way as set forth in this section.

Current law permits plans to request additional information need to
determine liability to pay a claim. This section of the bill amends
the law to prohibit plans from generating a coordination of benefits
in response to the receipt of a claim in order to determine whether
the insured is covered for all or part of the claim by another health
plan.  Further, a health plan may not deny or delay payment when an
insured does not complete or return such questionnaire.

Section two amends subsection (b) of section 3224-b of the insurance
law to strengthen protections and establish greater due process when a
health insurer seeks refunds for claim overpayments from providers.

The current statute is amended to now include all healthcare
providers.  A health plan must provide written notice to a provider of
its intention to seek recovery of overpayments. The notice must
include:  patient name, service date, payment amount, proposed
adjustment, and a specific explanation of the proposed adjustment.

A health plan may not seek recovery from a provider unless one of the
following occurs: the provider agrees to recovery in writing, the
provider fails to send its written challenge to the plan within 90
days, recovery has been upheld according to procedures set forth in
the existing contract, or a third party arbitrator upheld the recovery
determination.

All overpayment recovery efforts must be limited to: billing/coding
errors, incorrect payment rates, ineligibility of a person for
coverage, or fraud. A health plan may never initiate a recovery effort
for utilization review purposes.
A health plan must also give a provider the opportunity to challenge
the recovery determination. The provider must have no less than 90
days from the receipt of a health plan's written notice to provide
documentation challenging the alleged overpayments. A challenge that
is not resolved between a health plan and provider within 30 days
shall be resolved according the procedures set forth in the existing
contract or will be submitted to a third party arbitrator for
determination.

A health plan may not initiate an overpayment recovery effort more
than 24 months after original overpayment was received by a provider.
No time limit will apply to recovery efforts that are based on the
belief of fraud or other intentional misconduct, required by or
initiated at the request of a self-insured plan, or required by state
or federal government program. In the event a provider determines that
a plan underpaid a claim, the plan may defend the determination based
on overpayments going back in time as far as the claim underpayment.

A health plan shall never pursue overpayment recovery efforts against
an insured if the plan is prevented from pursuing overpayment recovery
against the provider. A plan must also assure that all contractors,
subcontractors, subvendors, agents and employees affiliated by
contract adhere to these requirements. Any contract or agreement made
between a health plan and a provider may not limit or diminish the
rights of a provider in any way as set forth in this section.

Section three amends the insurance law by adding a new section 3240 to
ensure coverage of services by participating providers.

Section 3240, establishes that a health plan that utilizes a network
of participating providers may not deem a provider who participates in
the plan's network and rendering services to be out-of-network based
on the fact that one or more providers rendering services for the same
or related medical condition does not participate in the provider
network.  The plan must pay the participating provider the contracted
rate for services regardless of the network status of the other
providers.  Further, the insured, subscriber or enrollee shall only be
subject to the in-network cost sharing provisions of the insurance
policy for the services of such participating provider.

Section four amends section 2406 of the insurance law by adding a new
subsection (a-1) which states that when a thorough investigation by
the State Department of Insurance reveals that a health insurance
provider has engaged in a series of acts contrary to the regulations
stipulated in section 3224-a of the insurance law, civil penalties
shall be levied which increase in amount for each finding of a
consistent pattern or practice contrary to the established, accepted
regulations of sec. 3224-a.

Section five provides for an immediate effective date.

 JUSTIFICATION :
Payer accountability involves ensuring adequate financing of the
health care delivery system to support existing quality services, to
keep pace with the evolution of patient care and to require insurers
to pay provider claims promptly and fully. These reform proposals are
intended to improve the current system and prohibit inappropriate
health insurance practices or payment methods.  Strengthening and
improving existing laws regulating the health insurance industry will
restore balance between providers and payers, ensure that providers
are paid for the medical services they render and, most important,
ensure all New Yorkers benefit from enhanced access to quality health
care.

In recognition of increased use and speed of electronic claims
processing technology, plans should be compelled to pay electronic
claims within a shortened timeframe. This bill would reduce the
timeframe for payment of claims submitted electronically from 45 days
to 15 days. In addition, the bill would reduce the timeframe for
payment of paper claims from 45 days to 30 days.

Administrative denials, i.e., denying claims for medically necessary,
covered health care services based on a technical error by the
provider should be barred. Unless the managed care plan's ability to
manage a patient's care has been demonstrably prejudiced, failure to
adhere to a technical or an administrative rule should not result in a
denial of payment for medically necessary covered services. The most
common administrative denials that providers face are: failure to
obtain a referral, untimely filing of a claim, late notification of a
hospital admission or provision of services, failure to provide
notification of a hospital admission and failure to request proper
authorization. In the event that new types of administrative denials
should emerge, the superintendent has the authority to specify such
administrative denials in a regulation. Providers and plans may agree
to language and provisions that are different than those listed,
however the agreement cannot diminish the rights of the provider
described in this section in any way.

Coordination of Benefits (COB) questionnaires are routinely used by
health plans to ascertain whether an insured has other insurance
coverage. Unfortunately, many plans issue these questionnaires to
insureds upon receipt of a claim for services rendered by a health
care provider. These questionnaires are sent despite the fact that the
medical care was pre-authorized and insurance coverage and eligibility
was verified prior to providing medical care. When the insured fails
to return the questionnaire, the insurer either indefinitely pends
payment of the claim or denies coverage. This, of course, leaves the
provider without reimbursement. While insurers should have the ability
to update and maintain information regarding an insured's health
insurance coverage, the completion of a COB questionnaire by an
insured should bear no relationship to payment of a claim. plans
should be prohibited from delaying or denying claims outright for that
reason.

There are currently no statutory limits, requirements or prohibitions
on the timing or scope of refund demands issued by health plans to
health care providers other than physicians. This bill would extend
current statutory protections for physicians to all health care
providers and enhance the due process protections for all health care
providers. In the absence of fraud, managed care plans should have no
more than two years from the payment of a claim to demand a refund,
unless such effort is requested by a self-insured plan or required by
state or federal government programs. In addition, the circumstances
under which refund demands can occur are limited to billing/coding
errors, incorrect payment rates, ineligibility of a person for
coverage or fraud. Under no circumstance should plans be permitted to
get a second chance at utilization review in the absence of an
additional appeal right for providers.

This bill also requires plans seeking a refund to provide written
notification to the provider before seeking a refund or making an
adjustment that includes detailed reasons for the refund demand,
identification of each previously paid claim for which a refund is
sought and offers the provider no less than 90 days to challenge the
refund request.

Consumers have been surprised and outraged to learn that their health
insurance plan transformed an obvious in-network medical service to
out-of-network because another provider rendering services for the
same or related condition was out-of-network. This practice not only
potentially costs the patient thousands of dollars, but also puts the
hospital in the untenable position of seeking payment from an
understandably frustrated and bewildered patient. All the while, the
health insurance plan received the financial benefit of having to pay
only part of its contracted rate to the hospital and the consumer is
forced to pay the balance. For in-network medical care, consumers'
financial responsibility should be limited to their co-pay, deductible
and/or co-insurance amounts regardless of whether another provider is
out-of-network. In addition, health care providers that contract with
a health plan, and therefore are participating providers, should be
paid their full contracted rate for services provided to the plan's
member regardless of the out-of-network status of another provider
rendering care for the same or related condition.

Health plans should be held accountable for their market conduct
practices. Consumers should be able to access the benefits for which
they paid without unfair and undisclosed penalties. participating
providers should be paid their contracted rate by the managed care
organization with which they contract and should not have to pursue
the health plan's members for the remainder of the plan's share of the
bill.

Currently, the fine for violating the prompt pay statute is $500 per
day for each day beyond the day the claim should have been paid and is
currently capped at $5,000. These fines do not appear to deter managed
care plans from making late payments. This bill would address that by
enhancing the superintendent of Insurance's authority to fine repeat
offenders. If a consistent pattern of violations has been identified
by the Superintendent, the Superintendent may levy a fine of not more
than $100,000. For a second such finding that occurs on or earlier
than two years after the first offense, a fine of not more than
$300,000 may be levied and for a third such finding that occurs on or
earlier than five years after the first offense, a fine can be levied
of up to $1,000,000. It is clear that when receiving required
compensation for rendered medical services from an insurer is
unpredictable or doubtful at best, a health care provider's ability to
provide superior medical services to his or her patients is severely
compromised. In contracting with health plans, health care providers
should feel confident that the terms of a binding agreement will be
faithfully upheld. A provider's compensation for rendered services, as
well as any benefits he or she can pass on to their patients, depends
entirely on the reliability of the original agreement with the health
plan. The enactment of stringent standards is thus crucial to the
improved functioning of New York's health care system and strict
penalty provisions and enforcement mechanisms are essential in
ensuring that those standards are followed.

 PRIOR LEGISLATIVE HISTORY :
2009:    A.3167 Referred to Insurance
2007-08: A.8114/S.5540 Referred to Insurance

 FISCAL IMPLICATIONS :
None.

 EFFECTIVE DATE :
This act will take effect immediately.

2009-S7475 (ACTIVE) - Bill Text download pdf

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

                                  7475

                            I N  S E N A T E

                             April 14, 2010
                               ___________

Introduced  by  Sen. BRESLIN -- 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 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 237 of the laws of 2009, 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 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  super-
intendent  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  policyholder  or covered person or make a
payment to a health  care  provider  within  [thirty]  FIFTEEN  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. THE INSURER, ORGANIZATION OR CORPO-
RATION SHALL NOT DENY  PAYMENT  FOR  A  CLAIM  FOR  MEDICALLY  NECESSARY
COVERED  SERVICES  ON THE BASIS OF AN ADMINISTRATIVE 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 ADMISSION OR PROVISION OF
SERVICES THAT THE INSURER, ORGANIZATION OR CORPORATION  MAY  REQUIRE;  A

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

                                                           LBD03354-03-0

S. 7475                             2

FAILURE  TO  REQUEST  PROPER  AUTHORIZATION  OF  A HOSPITAL ADMISSION OR
PROVISION OF SERVICES THAT THE INSURER, ORGANIZATION OR CORPORATION  MAY
REQUIRE;  OR  ANY OTHER ADMINISTRATIVE OR TECHNICAL DEFECT AS THE SUPER-
INTENDENT  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  or
forty-seven  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 reasonably clear due to a good faith dispute regarding the eligi-
bility  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 organ-
ization or corporation shall pay any undisputed portion of the claim  in
accordance  with  this  subsection  and notify the policyholder, covered
person or health care provider in writing within FIFTEEN  CALENDAR  DAYS
OF THE RECEIPT OF THE CLAIM TRANSMITTED ELECTRONICALLY OR VIA THE INTER-
NET,  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  or forty-seven 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 amended
by chapter 237 of the laws of 2009, is amended to read as follows:
  (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] OF ITS INTENTION TO SEEK recovery of  the
overpayment  of  claims to such health care providers. Such notice shall
state the patient name, service date, payment amount,  proposed  adjust-
ment,  and a reasonably specific explanation of the proposed adjustment.
A HEALTH PLAN SHALL NOT  SEEK  RECOVERY  FROM  A  HEALTH  CARE  PROVIDER

S. 7475                             3

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 RECOV-
ERY  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.
  [(2)]  (3) A health plan shall provide a health care provider with the
opportunity to challenge an overpayment recovery, including the  sharing
of  claims  information, and shall establish written policies and proce-
dures for health care providers to follow to  challenge  an  overpayment
recovery.  Such  challenge shall set forth the specific grounds on which
the provider is challenging the 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 OVERPAYMENTS. 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 DOCUMENTATION 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.
  [(3)] (4) 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  overpayment recovery efforts that are: (i) based on a reason-
able belief of fraud or other intentional misconduct, [or abusive  bill-
ing,]  (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.  Notwithstand-
ing the aforementioned 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 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.
  (4)]  (5)  For  the  purposes of this subsection the term "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, 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)]  (6)  Nothing  in this section shall be deemed to limit a health
plan's right to pursue recovery of overpayments that occurred  prior  to

S. 7475                             4

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.
  (7)  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.
  (8) 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.
  (9)  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.
  (10) 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,  FORMER
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, FORMER 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-

S. 7475                             5

INTENDENT FINDS THAT THE PERSON COMPLAINED OF HAS ENGAGED IN A SERIES OF
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.

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