senate Bill S5068A

2011-2012 Legislative Session

Requires health plans with coverage of out of plan medical services to provide certain information to insureds, subscribers and enrollees

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Archive: Last Bill Status - In Committee


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor

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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jan 10, 2012 reported and committed to insurance
Jan 05, 2012 print number 5068a
amend (t) and recommit to health
Jan 04, 2012 referred to health
May 03, 2011 referred to health

Votes

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Jan 10, 2012 - Health committee Vote

S5068A
15
0
committee
15
Aye
0
Nay
2
Aye with Reservations
0
Absent
0
Excused
0
Abstained
show Health committee vote details

Bill Amendments

Original
A (Active)
Original
A (Active)

Co-Sponsors

S5068 - Bill Details

See Assembly Version of this Bill:
A7489B
Current Committee:
Law Section:
Insurance Law
Laws Affected:
Amd §4408, Pub Health L; amd §§3217-a & 4324, add §3240, Ins L

S5068 - Bill Texts

view summary

Requires health plans providing coverage for out-of-network care to provide certain information to insureds, subscribers and enrollees.

view sponsor memo
BILL NUMBER:S5068

TITLE OF BILL:
An act
to amend the public health law and the insurance law, in relation to
prohibiting the approval of a health care plan which does not provide
coverage of out of network care

PURPOSE: OR GENERAL IDEA OF THE BILL:
To provide greater transparency and standardized disclosure of health
insurance companies' out of network payment policies so that patients
and employers can better understand the extent of their coverage.

SUMMARY OF SPECIFIC PROVISIONS:
Section 1 of the bill amends Section 4406 of the Public Health Law to
empower the Commissioner of Health and Superintendent of Insurance to
disapprove issuance of a health insurance policy offering coverage for
out of network care that will not provide significant coverage of the
usual costs of receiving care out of the plan's network. This section
would also require a health insurance company to disclose to its
subscribers and enrollees a description of its methodology for
reimbursing health care treatment by physicians not participating in the
plan's network, which shall be expressed as a percentage of the usual
cost of care provided by physicians not participating in the health
plan's network of providers (as determined by a nonprofit benchmarking
database known as FAIR Health). Moreover, this section would also
require a health insurance company to disclose to their enrollees upon
request the anticipated out of pocket costs for specific health care
services received on an out of network basis, which shall be based upon
the difference between the estimated actual cost of the service (as
determined by FAIR Health) and the health insurance company's out of
network reimbursement methodology.

Section 2 of the bill makes corresponding changes to Section 4322 of the
Insurance Law.

Section 3 of the bill provides for an August 1, 2011 effective date,

JUSTIFICATION:
Some consumers and employers choose to have health insurance policies
that permit them to receive care from a non-participating physician
because it permits them to see the health care provider of their choice.
However, this system has been fraught with problems. As a condition of
settlements with the Attorney General in 2009, several health insurance
companies agreed to discontinue the use of the flawed database for
determining payments when patients receive care outside of a plan's
network of physicians. Money was contributed toward creating a new
database to be maintained by a new unaffiliated non-profit organization,
called FAIR Health, Inc. The purpose of the database is to assure that
patients, employers and health insurers have accurate information
concerning the true cost of out-of-network medical services. The new
database should be operational for reporting medical charge data by the
middle of 2011. This development was applauded by the consumer and
provider community.

In the meantime, however, a number of insurers have changed their
methodology for covering out-of-network care to methodologies that


appear at first blush to cover costs adequately, but, in fact, often
result in severely inadequate coverage for patients. It is the intention
of this legislation to ensure that the new database developed as a
result of the Attorney General's 2009 investigation and report is
utilized as intended.

This legislation empowers the Commissioner of Health and Superintendent
of Insurance to disapprove issuance of a health insurance policy
offering coverage for out of network care that will not provide
significant coverage of the usual costs of receiving care out of the
plan's network. It would also better assure that health insurance
companies are informing their enrollees how their coverage policies for
out of network care compare to the actual cost of services. Finally, It
would better protect employers and patients from purchasing policies
that purport to, but in fact fail to, provide adequate coverage for out
of network care.

LEGISLATIVE HISTORY: New Bill

FISCAL IMPLICATIONS: None to State.

EFFECTIVE DATE: This act shall take effect August 1,
2011.

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

                                  5068

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                               May 3, 2011
                               ___________

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

AN ACT to amend the public health law and the insurance law, in relation
  to prohibiting the approval of a  health  care  plan  which  does  not
  provide coverage of out of network care

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

  Section 1. Paragraph (a) of subdivision  2  of  section  4406  of  the
public  health  law,  as  amended by chapter 504 of the laws of 1995, is
amended and two new paragraphs (j) and (k) are added to read as follows:
  (a) Upon approval of the commissioner, an organization  may  implement
an  out-of-plan  benefits  system that allows enrollees to use providers
not participating in the plan pursuant  to  a  contract,  employment  or
other  association.  The  commissioner,  in consultation with the super-
intendent, shall not approve an organization to implement an out-of-plan
benefits system unless the organization demonstrates that:
  (i) the requirements of this article and any  regulations  promulgated
thereunder have been met and will continue to be met;
  (ii)  it  can  establish and maintain a contingent reserve fund of not
less than two percent of the entire net premium income for the  calendar
year  of  the  organization  in addition to any other contingent reserve
fund required by the commissioner in regulations subject to the approval
of the superintendent; [and]
  (iii) it has established mechanisms to ensure and  monitor  compliance
with the provisions of paragraph (b) of this subdivision[.];
  (IV) THE OUT OF PLAN BENEFITS SYSTEM WILL PROVIDE SIGNIFICANT COVERAGE
OF THE USUAL COSTS OF OUT-OF-PLAN HEALTH SERVICES.
  (J)  AN  ORGANIZATION OFFERING AN OUT-OF-PLAN BENEFITS SYSTEM PURSUANT
TO THIS SUBDIVISION SHALL PROVIDE TO THEIR SUBSCRIBERS AND  ENROLLEES  A
DESCRIPTION  OF  ITS  METHODOLOGY  FOR REIMBURSING OUT-OF-PLAN BENEFITS,
WHICH  SHALL  BE  EXPRESSED  AS  A  PERCENTAGE  OF  THE  USUAL  COST  OF

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10981-01-1

S. 5068                             2

OUT-OF-PLAN HEALTH CARE SERVICES. SUCH ORGANIZATION SHALL INCLUDE WITHIN
THIS  DESCRIPTION  EXAMPLES  OF  ANTICIPATED  OUT  OF  POCKET  COSTS FOR
FREQUENTLY BILLED OUT-OF-PLAN HEALTH CARE SERVICES PROVIDED  BY  VARIOUS
PHYSICIAN  SPECIALISTS.  UPON  REQUEST OF AN ENROLLEE, SUCH ORGANIZATION
SHALL PROVIDE INFORMATION TO SUCH ENROLLEE  IN  WRITING  OR  THROUGH  AN
INTERNET  WEBSITE  THAT REASONABLY PERMITS THE ENROLLEE TO DETERMINE THE
ANTICIPATED OUT OF POCKET COSTS FOR A SPECIFIC OUT-OF-PLAN  HEALTH  CARE
SERVICE BASED UPON THE DIFFERENCE BETWEEN THE ORGANIZATION'S METHODOLOGY
FOR  REIMBURSING  OUT-OF-PLAN HEALTH CARE SERVICES AND THE USUAL COST OF
OUT-OF-PLAN HEALTH CARE SERVICES.
  (K) FOR THE PURPOSES OF THIS SUBDIVISION, "USUAL COST  OF  OUT-OF-PLAN
HEALTH  CARE SERVICES" SHALL MEAN THE EIGHTIETH PERCENTILE OF THE ACTUAL
CHARGES FOR A HEALTH CARE  SERVICE  PROVIDED  IN  THE  SAME  COUNTY  AND
PERFORMED  BY AN OUT-OF-PLAN PHYSICIAN IN THE SAME OR SIMILAR SPECIALTY,
AS REPORTED IN A BENCHMARKING DATABASE MAINTAINED BY A NONPROFIT  ORGAN-
IZATION  WITHOUT  AFFILIATION  WITH AN ORGANIZATION CERTIFIED UNDER THIS
ARTICLE OR AN INSURER LICENSED UNDER THE INSURANCE  LAW,  CREATED  AS  A
RESULT  OF  SETTLEMENTS  ENTERED  INTO DURING THE YEAR TWO THOUSAND NINE
BETWEEN THE DEPARTMENT OF LAW AND INDIVIDUAL HEALTH INSURANCE  ORGANIZA-
TIONS.
  S  2.  Section  4322  of  the insurance law is amended by adding a new
subsection (g-1) to read as follows:
  (G-1) A HEALTH MAINTENANCE ORGANIZATION ISSUED A CERTIFICATE  PURSUANT
TO  ARTICLE FORTY-FOUR OF THE PUBLIC HEALTH LAW OR A CORPORATION SUBJECT
TO THE PROVISIONS OF  THIS  ARTICLE  OFFERING  AN  OUT-OF-PLAN  BENEFITS
SYSTEM  PURSUANT  TO  THIS  SECTION  SHALL  PROVIDE  TO AN ENROLLEE OF A
CONTRACT A DESCRIPTION OF ITS METHODOLOGY  FOR  REIMBURSING  OUT-OF-PLAN
BENEFITS,  WHICH SHALL BE EXPRESSED AS A PERCENTAGE OF THE USUAL COST OF
OUT-OF-PLAN HEALTH CARE SERVICES. SUCH ORGANIZATION OR CORPORATION SHALL
INCLUDE WITHIN THIS DESCRIPTION EXAMPLES OF ANTICIPATED  OUT  OF  POCKET
COSTS FOR FREQUENTLY BILLED OUT-OF-PLAN HEALTH CARE SERVICES PROVIDED BY
VARIOUS  PHYSICIAN  SPECIALISTS.  UPON  REQUEST OF AN ENROLLEE OF SUCH A
CONTRACT, SUCH ORGANIZATION OR CORPORATION SHALL PROVIDE INFORMATION  TO
SUCH PURCHASER IN WRITING OR THROUGH AN INTERNET WEBSITE THAT REASONABLY
PERMITS  THE  ENROLLEE  TO DETERMINE THE ANTICIPATED OUT OF POCKET COSTS
FOR A SPECIFIC OUT-OF-PLAN HEALTH CARE SERVICE BASED UPON THE DIFFERENCE
BETWEEN  THE  ORGANIZATION'S  METHODOLOGY  FOR  REIMBURSING  OUT-OF-PLAN
HEALTH  CARE  SERVICES  AND  THE  USUAL  COST OF OUT-OF-PLAN HEALTH CARE
SERVICES.  FOR  THE  PURPOSES  OF  THIS  SUBDIVISION,  "USUAL  COST   OF
OUT-OF-PLAN HEALTH CARE SERVICES" SHALL MEAN THE EIGHTIETH PERCENTILE OF
THE ACTUAL CHARGES FOR A HEALTH CARE SERVICE PROVIDED IN THE SAME COUNTY
AND  PERFORMED  BY  AN  OUT-OF-PLAN  PHYSICIAN  IN  THE  SAME OR SIMILAR
SPECIALITY, AS REPORTED IN  A  BENCHMARKING  DATABASE  MAINTAINED  BY  A
NONPROFIT  ORGANIZATION  WITHOUT AFFILIATION WITH AN ORGANIZATION CERTI-
FIED UNDER ARTICLE FORTY-FOUR OF THE PUBLIC HEALTH  LAW  OR  CORPORATION
LICENSED  PURSUANT  TO  THIS ARTICLE, CREATED AS A RESULT OF SETTLEMENTS
ENTERED INTO DURING THE YEAR TWO THOUSAND NINE BETWEEN THE DEPARTMENT OF
LAW AND INDIVIDUAL HEALTH INSURANCE ORGANIZATIONS.
  S 3. This act shall take effect August 1, 2011.

Co-Sponsors

view additional co-sponsors

S5068A (ACTIVE) - Bill Details

See Assembly Version of this Bill:
A7489B
Current Committee:
Law Section:
Insurance Law
Laws Affected:
Amd §4408, Pub Health L; amd §§3217-a & 4324, add §3240, Ins L

S5068A (ACTIVE) - Bill Texts

view summary

Requires health plans providing coverage for out-of-network care to provide certain information to insureds, subscribers and enrollees.

view sponsor memo
BILL NUMBER:S5068A

TITLE OF BILL:
An act
to amend the insurance law and the public health law, in relation to
requiring a health care plan which provides
coverage of out of network care to provide certain information to
insureds, subscribers or enrollees

PURPOSE:
To provide greater transparency and standardized disclosure of health
insurance companies' out of network payment policies so that patients
and employers can better understand the extent of their coverage.

SUMMARY OF PROVISIONS:
Section 1 of the bill amends section 3217-a of the Insurance Law to
require all health insurance contracts;managed care health insurance
contracts; or any other health insurance contract or product for
which the superintendent deems appropriate to disclose to its
subscribers and enrollees a description of its methodology for
reimbursing health care treatment by physicians not participating in
the plan's network, which shall be expressed as a percentage of the
usual cost of care provided by physicians not participating in the
health plan's network of providers (as determined by a non-profit
benchmarking database known as FAIR Health). Moreover, this section
would also require a health insurance company to disclose to their
enrollees upon request the anticipated out of pocket costs for
specific health care services received on an out of network basis,
which shall be based upon the difference between the estimated actual
cost of the service (as determined by FAIR Health) and the health
insurance company's out of network reimbursement methodology.

Section 2 of the bill empowers the superintendent of Insurance to
disapprove issuance of a health insurance policy offering coverage
for out of network care that will not provide significant coverage of
the usual costs of receiving care out of the plan's network.

Sections 3 and 4 of the bill makes corresponding changes in relation
to the disclosure obligation to Section 4324 of the Insurance Law and
Section 4408 of the Public Health Law.

JUSTIFICATION:
Some consumers and employers choose to have health insurance policies
that permit them to receive care from a non-participating physician
because it permits them to see the health care provider of their
choice. However, this system has been fraught with problems. As a
condition of settlements with the Attorney General in 2009, several
health insurance companies agreed to discontinue the use of the
flawed database for determining payments when patients receive care
outside of a plan's network of physicians. Money was contributed
toward creating a new database to be maintained by a new unaffiliated

non-profit organization, called FAIR Health, Inc. The purpose of the
database is to assure that patients, employers and health insurers
have accurate information concerning the true cost of out-of-network
medical services. The new database is now operational for reporting
medical charge data. This development was applauded by the consumer
and provider community.

In the meantime, however, a number of insurers have changed their
methodology for covering out-of-network care to methodologies that
appear at first blush to cover costs adequately, but, in fact, often
result in severely inadequate coverage for patients. It is the
intention of this legislation to ensure that the new database
developed as a result of the Attorney General's 2009 investigation
and report is utilized as intended.

This legislation empowers the Superintendent of Insurance to
disapprove issuance of a health insurance policy offering coverage
for out of network care that will not provide significant coverage of
the usual costs of receiving care out of the plan's network. It would
also better assure that health insurance companies are informing
their enrollees how their coverage policies for out of network care
compare to the actual cost of services.
Finally, It would better protect employers and patients from
purchasing policies that purport to, but in fact fail to, provide
adequate coverage for out of network care.

LEGISLATIVE HISTORY:
New bill.

FISCAL IMPLICATIONS:
None to the state.

EFFECTIVE DATE:
This act shall take effect 60 days after enactment and apply to all
policies and contracts issued, renewed, modified, altered or amended
on or after such date.

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

                                 5068--A

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                               May 3, 2011
                               ___________

Introduced by Sens. HANNON, AVELLA, BALL, KRUEGER, MARTINS -- read twice
  and ordered printed, and when printed to be committed to the Committee
  on Health -- recommitted to the Committee on Health in accordance with
  Senate  Rule  6, sec. 8 -- committee discharged, bill amended, ordered
  reprinted as amended and recommitted to said committee

AN ACT to amend the insurance law and the public health law, in relation
  to requiring a health care plan which  provides  coverage  of  out  of
  network  care  to provide certain information to insureds, subscribers
  or enrollees

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

  Section  1.   Subsection (a) of section 3217-a of the insurance law is
amended by adding a new paragraph 18 to read as follows:
  (18) WHERE APPLICABLE, IF THE POLICY  OFFERS  OUT-OF-NETWORK  COVERAGE
APPROVED  BY  THE  SUPERINTENDENT PURSUANT TO SECTION THIRTY-TWO HUNDRED
FORTY OF THIS ARTICLE, A DESCRIPTION OF ITS METHODOLOGY FOR  REIMBURSING
OUT-OF-NETWORK  HEALTH  CARE  SERVICES  WHICH  SHALL BE SET FORTH AS THE
PERCENTAGE OF THE USUAL AND CUSTOMARY  COSTS  OF  OUT-OF-NETWORK  HEALTH
CARE  SERVICES  THE  POLICY WILL COVER. INCLUDED WITHIN THIS DESCRIPTION
SHALL BE EXAMPLES OF ANTICIPATED OUT  OF  PACKET  COSTS  FOR  FREQUENTLY
BILLED  OUT-OF-NETWORK  HEALTH  CARE SERVICES PROVIDED BY VARIOUS HEALTH
CARE PROVIDER SPECIALISTS. FOR THE PURPOSES OF THIS PARAGRAPH "USUAL AND
CUSTOMARY COSTS OF OUT-OF NETWORK HEALTH CARE SERVICES" SHALL  MEAN  THE
EIGHTIETH  PERCENTILE  OF  THE  ACTUAL CHARGES FOR A HEALTH CARE SERVICE
PERFORMED BY AN OUT-OF-NETWORK HEALTH CARE PROVIDER IN THE SAME OR SIMI-
LAR SPECIALITY, AND PROVIDED IN  THE  SAME  ZIP  CODE  OR  IN  THE  SAME
GEOGRAPHICAL  AREA  DEFINED  BY LOCALITIES WITH THE SAME FIRST THREE ZIP
CODE DIGITS, AS REPORTED IN A  BENCHMARKING  DATABASE  MAINTAINED  BY  A
NONPROFIT  ORGANIZATION  WITHOUT AFFILIATION WITH AN INSURER LICENSED TO
WRITE ACCIDENT AND HEALTH INSURANCE, A CORPORATION ORGANIZED PURSUANT TO
ARTICLE FORTY-THREE OF THIS CHAPTER, A HEALTH  MAINTENANCE  ORGANIZATION

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10981-05-2

S. 5068--A                          2

CERTIFIED  PURSUANT  TO  ARTICLE  FORTY-FOUR  OF  THE PUBLIC HEALTH LAW,
CREATED AS A RESULT OF SETTLEMENTS ENTERED  INTO  DURING  THE  YEAR  TWO
THOUSAND NINE BETWEEN THE DEPARTMENT OF LAW AND INDIVIDUAL HEALTH INSUR-
ANCE ORGANIZATIONS.
  S 2. The insurance law is amended by adding a new section 3240 to read
as follows:
  S  3240.  OUT-OF-NETWORK HEALTH CARE SERVICES. (A) A HEALTH PLAN WHICH
PROVIDES COVERAGE FOR OUT-OF-NETWORK HEALTH CARE SERVICES SHALL  PROVIDE
TO THEIR INSUREDS, SUBSCRIBERS OR ENROLLEES A DESCRIPTION OF ITS METHOD-
OLOGY FOR REIMBURSING OUT-OF-NETWORK HEALTH CARE SERVICES WHICH SHALL BE
SET  FORTH  AS  A  PERCENTAGE  OF  THE  USUAL  AND  CUSTOMARY  COSTS  OF
OUT-OF-NETWORK HEALTH CARE SERVICES THE CONTRACT OR POLICY  WILL  COVER.
THE HEALTH PLAN SHALL INCLUDE WITHIN THIS DESCRIPTION EXAMPLES OF ANTIC-
IPATED  OUT  OF POCKET COSTS FOR FREQUENTLY BILLED OUT-OF-NETWORK HEALTH
CARE SERVICES PROVIDED BY VARIOUS HEALTH CARE PROVIDER SPECIALISTS. UPON
REQUEST OF AN INSURED, SUBSCRIBER OR ENROLLEE,  THE  HEALTH  PLAN  SHALL
PROVIDE INFORMATION TO THE INSURED, SUBSCRIBER OR ENROLLEE IN WRITING OR
THROUGH  AN  INTERNET  WEBSITE  THAT  REASONABLY  PERMITS  THE  INSURED,
SUBSCRIBER OR ENROLLEE TO DETERMINE THE ANTICIPATED OUT OF PACKET  COSTS
FOR A SPECIFIC OUT-OF-NETWORK HEALTH CARE SERVICE BASED UPON THE DIFFER-
ENCE  BETWEEN THE ORGANIZATION'S METHODOLOGY FOR REIMBURSING OUT-OF-NET-
WORK  HEALTH  CARE  SERVICES  AND  THE  USUAL  AND  CUSTOMARY  COSTS  OF
OUT-OF-NETWORK  HEALTH  CARE  SERVICES.  THE  SUPERINTENDENT  SHALL  NOT
APPROVE A POLICY  ISSUED BY A HEALTH PLAN  THAT  PROVIDES  COVERAGE  FOR
OUT-OF-NETWORK  HEALTH CARE SERVICES UNLESS THE HEALTH PLAN DEMONSTRATES
THAT THE POLICY WILL PROVIDE  SIGNIFICANT  COVERAGE  OF  THE  USUAL  AND
CUSTOMARY COSTS OF OUT-OF-NETWORK HEALTH CARE SERVICES.
  (B) FOR THE PURPOSES OF THIS SECTION, THE TERM:
  (1) "HEALTH PLAN" SHALL MEAN AN INSURER LICENSED TO WRITE ACCIDENT AND
HEALTH   INSURANCE,   A   CORPORATION   ORGANIZED  PURSUANT  TO  ARTICLE
FORTY-THREE OF THIS CHAPTER, A HEALTH MAINTENANCE ORGANIZATION CERTIFIED
PURSUANT TO ARTICLE FORTY-FOUR OF THE PUBLIC HEALTH LAW OR  A  MUNICIPAL
COOPERATIVE  HEALTH BENEFIT PLAN PURSUANT TO ARTICLE FORTY-SEVEN OF THIS
CHAPTER; AND
  (2) "USUAL AND CUSTOMARY COSTS OF OUT-OF-NETWORK HEALTH CARE SERVICES"
SHALL MEAN THE EIGHTIETH PERCENTILE OF THE ACTUAL CHARGES FOR  A  HEALTH
CARE  SERVICE PERFORMED BY AN OUT-OF-NETWORK HEALTH CARE PROVIDER IN THE
SAME OR SIMILAR SPECIALTY, AND PROVIDED IN THE SAME ZIP CODE  OR  WITHIN
THE  SAME  GEOGRAPHICAL  AREA  DEFINED BY LOCALITIES WITH THE SAME FIRST
THREE ZIP CODE DIGITS, AS REPORTED IN A BENCHMARKING DATABASE MAINTAINED
BY A NONPROFIT ORGANIZATION WITHOUT  AFFILIATION  WITH  A  HEALTH  PLAN,
CREATED  AS  A  RESULT  OF  SETTLEMENTS ENTERED INTO DURING THE YEAR TWO
THOUSAND NINE BETWEEN THE DEPARTMENT OF LAW AND INDIVIDUAL HEALTH INSUR-
ANCE ORGANIZATIONS.
  S 3. Subsection (a) of section 4324 of the insurance law is amended by
adding a new paragraph 19 to read as follows:
  (19) WHERE APPLICABLE, IF THE CONTRACT INCLUDES OUT OF NETWORK  COVER-
AGE  APPROVED  BY  THE  SUPERINTENDENT  PURSUANT  TO  SECTION THIRTY-TWO
HUNDRED FORTY OF THIS CHAPTER, A  DESCRIPTION  OF  THE  METHODOLOGY  FOR
REIMBURSING OUT-OF-NETWORK HEALTH CARE SERVICES WHICH SHALL BE SET FORTH
AS  THE  PERCENTAGE  OF  THE USUAL AND CUSTOMARY COSTS OF OUT-OF-NETWORK
HEALTH CARE SERVICES THE  CONTRACT  WILL  COVER.  INCLUDED  WITHIN  THIS
DESCRIPTION  SHALL  BE  EXAMPLES  OF ANTICIPATED OUT OF POCKET COSTS FOR
FREQUENTLY BILLED OUT-OF-NETWORK HEALTH CARE SERVICES PROVIDED BY  VARI-
OUS HEALTH CARE PROVIDER SPECIALISTS. FOR THE PURPOSES OF THIS PARAGRAPH
"USUAL AND CUSTOMARY COSTS OF OUT-OF-NETWORK HEALTH CARE SERVICES" SHALL

S. 5068--A                          3

MEAN  THE  EIGHTIETH  PERCENTILE OF THE ACTUAL CHARGES FOR A HEALTH CARE
SERVICE PERFORMED BY AN OUT-OF-NETWORK HEALTH CARE PROVIDER IN THE  SAME
OR  SIMILAR  SPECIALTY,  AND PROVIDED IN THE SAME ZIP CODE OR WITHIN THE
SAME  GEOGRAPHICAL  AREA DEFINED BY LOCALITIES WITH THE SAME FIRST THREE
ZIP CODE DIGITS, AS REPORTED IN A BENCHMARKING DATABASE MAINTAINED BY  A
NONPROFIT  ORGANIZATION  WITHOUT AFFILIATION WITH AN INSURER LICENSED TO
WRITE ACCIDENT AND HEALTH INSURANCE, A CORPORATION ORGANIZED PURSUANT TO
THIS ARTICLE, OR A HEALTH MAINTENANCE ORGANIZATION CERTIFIED PURSUANT TO
ARTICLE FORTY-FOUR OF THE PUBLIC HEALTH LAW,  CREATED  AS  A  RESULT  OF
SETTLEMENTS  ENTERED  INTO DURING THE YEAR TWO THOUSAND NINE BETWEEN THE
DEPARTMENT OF LAW AND INDIVIDUAL HEALTH INSURANCE ORGANIZATIONS.
  S 4. Subdivision 1 of section 4408 of the public health law is amended
by adding a new paragraph (s) to read as follows:
  (S) WHERE APPLICABLE, IF THE CONTRACT INCLUDES OUT OF NETWORK COVERAGE
APPROVED BY THE SUPERINTENDENT PURSUANT TO  SECTION  THIRTY-TWO  HUNDRED
FORTY  OF  THE INSURANCE LAW, A DESCRIPTION OF THE METHODOLOGY FOR REIM-
BURSING OUT-OF-PLAN HEALTH CARE SERVICES WHICH SHALL BE SET FORTH AS THE
PERCENTAGE OF THE USUAL AND CUSTOMARY  COSTS  OF  OUT-OF-NETWORK  HEALTH
CARE  SERVICES THE CONTRACT WILL COVER. INCLUDED WITHIN THIS DESCRIPTION
SHALL BE EXAMPLES OF ANTICIPATED OUT  OF  POCKET  COSTS  FOR  FREQUENTLY
BILLED  OUT-OF-PLAN HEALTH CARE SERVICES PROVIDED BY VARIOUS HEALTH CARE
PROVIDER SPECIALISTS. FOR THE PURPOSES OF  THIS  PARAGRAPH,  "USUAL  AND
CUSTOMARY  COSTS  OF OUT-OF-NETWORK HEALTH CARE SERVICES" SHALL MEAN THE
EIGHTIETH PERCENTILE OF THE ACTUAL CHARGES FOR  A  HEALTH  CARE  SERVICE
PERFORMED  BY AN OUT-OF-PLAN HEALTH CARE PROVIDER IN THE SAME OR SIMILAR
SPECIALTY, AND PROVIDED  IN  THE  SAME  ZIP  CODE  OR  WITHIN  THE  SAME
GEOGRAPHICAL  AREA  DEFINED  BY LOCALITIES WITH THE SAME FIRST THREE ZIP
CODE DIGITS, AS REPORTED IN THE BENCHMARKING DATABASE  MAINTAINED  BY  A
NONPROFIT  ORGANIZATION  WITHOUT AFFILIATION WITH AN ORGANIZATION CERTI-
FIED UNDER THIS ARTICLE OR AN INSURER OR CORPORATION LICENSED UNDER  THE
INSURANCE  LAW,  CREATED  AS A RESULT OF SETTLEMENTS ENTERED INTO DURING
THE YEAR TWO THOUSAND NINE BETWEEN THE DEPARTMENT OF LAW AND  INDIVIDUAL
HEALTH INSURANCE ORGANIZATIONS.
  S  5.  This  act  shall take effect on the sixtieth day after it shall
have become a law and shall apply to all policies and contracts  issued,
renewed, modified, altered or amended on or after such date.

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