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

                                  8884

                          I N  A S S E M B L Y

                               (PREFILED)

                             January 4, 2012
                               ___________

Introduced  by M. of A. QUART -- 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] 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. A HEALTH CARE  PROVIDER  WHO  SUBMITS  CLAIMS  ELECTRONICALLY
SHALL HAVE THE OPTION OF GETTING PAID ELECTRONICALLY.
  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

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
              

                      [ ] is old law to be omitted.
                                                           LBD08059-02-1

A. 8884                             2

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 AGREED TO BY BOTH
PARTIES.
  (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.
  Subject   to   the  provisions  of  paragraph  [three]  NINE  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.
  [(3)] (9) 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

A. 8884                             3

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)]  (10) 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-
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
NINE  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-

A. 8884                             4

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 EXCEPT WHERE
THERE IS CONSENT BY THE HEALTH CARE PROVIDER.
  (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  NOT  REDUCE  THE  LEVEL  OF CPT CODES FOR BILLED
COVERED SERVICES WITHOUT FIRST PERFORMING AN AUDIT  REVIEW  OF  ALL  THE
PERTINENT PATIENT MEDICAL RECORDS.
  (9)  THE  SUPERINTENDENT SHALL ESTABLISH AN INDEPENDENT DISPUTE RESOL-
UTION REVIEW BOARD CONSISTING OF PHYSICIANS LICENSED TO  PRACTICE  MEDI-
CINE  IN  THE  STATE  OF  NEW  YORK  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 SUPERINTEN-
DENT  SHALL  ESTABLISH  A  CASE  ADMINISTRATION  FEE  TO  COVER THE COST
INCURRED BY THE  DISPUTE  REVIEW  BOARD  (INCLUDING  EXPERT  CPT  CODING
CONSULTANTS) IN REVIEWING AND DECIDING A BILLING DISPUTE. THIS FEE IS TO
BE BORNE BY THE PARTY WHO LOSES THE DISPUTE DECISION.
  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.