Senate Bill S6551

2011-2012 Legislative Session

Prohibits providers of health care benefits from denying claims for medically necessary services for failure to provide timely notice

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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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Date of Action	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Feb 27, 2012	referred to insurance

2011-S6551 (ACTIVE) - Details

Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Amd §§3224-a & 4914, Ins L; amd §4914, Pub Health L

2011-S6551 (ACTIVE) - Summary

Prohibits providers of health care benefits from denying claims for medically necessary services for failure to provide timely notice; extends from 45 days to 4 months the period within which an insured's health care provider must initiate an external appeal.

2011-S6551 (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S6551

TITLE OF BILL:
An act to amend the insurance law, in relation to prohibiting providers
of health care benefits from denying payment of claims for medically
necessary service for failure to provide timely notice; and to amend the
insurance law and the public health law, in relation to expanding the
time limit to initiate an external appeal by an insureds health care
provider to four months

PURPOSE OR GENERAL IDEA OF BILL:
To prohibit the denial of claims for medically necessary services based
solely upon a hospitals failure to timely notify the insurer, organiza-
tion or corporation providing coverage that the service has been
provided, unless the hospital and the insurer, organization or corpo-
ration agree to such notification requirements; and to extend the time
in which a provider may seek an external appeal.

SUMMARY OF PROVISIONS:
Section one amends Insurance Law §3224-a to provide that an insurer, or
an organization or corporation certified pursuant to Article 43 or 47 of
this chapter, or Article 44 of the PHL shall not deny payment of claims
for medically necessary services provided by a general hospital certi-
fied pursuant to Article 28 of the PHL on the basis that the hospital
did not timely notify such insurer, organization or corporation that the
services had been provided. This section shall not preclude a hospital

an insurer, organization or corporation from agreeing to requirements
for timely notification that services have been provided, or agreeing to
payment penalties for untimely notification; provided that any agreed to
reduction in payment for claims for services which the hospital fails to
timely notify shall not exceed 12% of the payment amount otherwise due
from such insurer, organization or corporation, and a penalty shall not
be imposed if the service was pre authorized or if the patient's insur-
ance coverage was not known to the hospital until after the patient was
discharged.

Section two amends Insurance Law §49l4(b)(1) to give an insured's health
care provider four months to initiate an external appeal after the
insured or the insured's health care provider receives notice from the
health care plan, or such plan's utilization review agent if applicable,
of a final adverse determination or denial, or after both the plan and
the insured have jointly agreed to waive any internal appeal.

Section three amends PHL §4914(2)(a) to give an enrollee's health care
provider four months to initiate an external appeal after the enrollee
or the enrollee's health care provider shall receives notification from
the health care plan, or such plan's utilization review agent if appli-
cable, of a final adverse determination or denial, or after both the
plan and the enrollee have jointly agreed to waive any internal appeal.

Section four provides that the act shall take effect to the 30th day
after it shall become law.

JUSTIFICATION:
Several insurers have implemented admission notification policies that
subject hospitals to substantial financial penalties for the failure to
timely notify them of a patient's admission.  Generally, such policies
require notification of inpatient admission within 24 hours. These poli-
cies include reductions in reimbursement ranging from 50%-100% of what
would have otherwise have been payable.  These reductions can be imposed
even when the insurer agrees that the services were medically necessary
and when the services were preauthorized. The penalties imposed for the
failure to comply with administrative notification policies are dispro-
portionately severe.  While hospitals agree that admission notification
is helpful to enable an efficient and coordinated discharge, the 24 hour
timeframe provided does not account for unforeseen delays. The denial or
substantial reduction in payments for the failure to meet a 24 hour
notification requirement is punitive and does not advance the intended
purpose of requiring such notification. Insurers should not be able to
deny reimbursement for medically necessary services solely on such tech-
nical grounds.

In July 2011, Governor Cuomo enacted provisions conforming New York
State Insurance Law to the requirements of the Patient Protection and
Affordable Care Act (ACA). The ACA requires that patients be allowed
four months from receiving an adverse coverage determination to file an
external appeal. However, the ACA does not provide similar provisions
for providers.  Therefore, the changes made last year reflect the ACA's
four-month timeframe for patient appeals only, not for provider appeals.
This would provide for uniform external appeal timeframes.

PRIOR LEGISLATIVE HISTORY:
New bill.

FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
On the 30th day after its enactment.

2011-S6551 (ACTIVE) - Bill Text download pdf

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

                                  6551

                            I N  S E N A T E

                            February 27, 2012
                               ___________

Introduced  by  Sen.  HANNON -- 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 prohibiting  providers
  of  health  care benefits from denying payment of claims for medically
  necessary service for failure to provide timely notice; and  to  amend
  the  insurance law and the public health law, in relation to expanding
  the time limit to initiate an external appeal by  an  insureds  health
  care provider to four months

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

  Section 1. Section 3224-a of the insurance law is amended by adding  a
new subsection (i) to read as follows:
  (I)(1)  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 SHALL  NOT  DENY  PAYMENT
FOR  A  CLAIM  FOR  A  MEDICALLY NECESSARY SERVICE PROVIDED BY A GENERAL
HOSPITAL CERTIFIED PURSUANT TO ARTICLE TWENTY-EIGHT OF THE PUBLIC HEALTH
LAW ON THE BASIS THAT THE HOSPITAL DID NOT TIMELY NOTIFY  SUCH  INSURER,
ORGANIZATION OR CORPORATION THAT THE SERVICE HAD BEEN PROVIDED.
  (2) NOTHING IN THIS SUBSECTION SHALL PRECLUDE A HOSPITAL AND AN INSUR-
ER,  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  FROM  AGREEING  TO  REQUIREMENTS  FOR  TIMELY
NOTIFICATION  THAT  A SERVICE HAS BEEN PROVIDED OR PAYMENT PENALTIES FOR
UNTIMELY NOTIFICATION; PROVIDED, HOWEVER, THAT ANY AGREED TO  REDUCTIONS
IN PAYMENT FOR CLAIMS FOR SERVICES FOR WHICH THE HOSPITAL FAILS TO TIME-
LY  NOTIFY  SHALL  NOT:  (I) EXCEED TWELVE PERCENT OF THE PAYMENT AMOUNT
OTHERWISE DUE FROM SUCH INSURER, ORGANIZATION  OR  CORPORATION  FOR  THE
SERVICES  PROVIDED, AND (II) BE IMPOSED IF THE SERVICE WAS PREAUTHORIZED
BY SUCH INSURER, ORGANIZATION OR CORPORATION, OR IF THE PATIENT'S INSUR-
ANCE COVERAGE WAS NOT KNOWN TO THE HOSPITAL UNTIL AFTER THE PATIENT  WAS
DISCHARGED.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD14716-01-2

S. 6551                             2

  S  2.  Paragraph  1 of subsection (b) of section 4914 of the insurance
law, as amended by chapter 219 of the laws of 2011, is amended  to  read
as follows:
  (1)  The insured shall have four months to initiate an external appeal
after the insured receives notice from the health  care  plan,  or  such
plan's utilization review agent if applicable, of a final adverse deter-
mination  or denial, or after both the plan and the insured have jointly
agreed to waive any internal appeal, or after the insured is  deemed  to
have exhausted or is not required to complete any internal appeal pursu-
ant  to  section  2719  of  the  Public  Health Service Act, 42 U.S.C. S
300gg-19. Where applicable, the insured's  health  care  provider  shall
have  [forty-five days] FOUR MONTHS to initiate an external appeal after
the insured or  the  insured's  health  care  provider,  as  applicable,
receives  notice  from  the health care plan, or such plan's utilization
review agent if applicable, of a final adverse determination  or  denial
or  after both the plan and the insured have jointly agreed to waive any
internal appeal. Such request shall be in writing in accordance with the
instructions and in such form  prescribed  by  subsection  (e)  of  this
section.  The  insured,  and  the  insured's  health care provider where
applicable, shall have the opportunity to submit  additional  documenta-
tion with respect to such appeal to the external appeal agent within the
applicable time period above; provided however that when such documenta-
tion  represents a material change from the documentation upon which the
utilization review agent based its adverse determination or  upon  which
the health plan based its denial, the health plan shall have three busi-
ness  days  to  consider  such  documentation  and amend or confirm such
adverse determination.
  S 3. Paragraph (a) of subdivision 2 of  section  4914  of  the  public
health law, as amended by chapter 219 of the laws of 2011, is amended to
read as follows:
  (a) The enrollee shall have four months to initiate an external appeal
after  the  enrollee  receives notice from the health care plan, or such
plan's utilization review agent if applicable, of a final adverse deter-
mination or denial or after both the plan and the enrollee have  jointly
agreed  to waive any internal appeal, or after the enrollee is deemed to
have exhausted or is not required to complete any internal appeal pursu-
ant to section 2719 of the  Public  Health  Service  Act,  42  U.S.C.  S
300gg-19.  Where  applicable,  the enrollee's health care provider shall
have [forty-five days] FOUR MONTHS to initiate an external appeal  after
the  enrollee  or  the  enrollee's  health care provider, as applicable,
receives notice from the health care plan, or  such  plan's  utilization
review  agent  if applicable, of a final adverse determination or denial
or after both the plan and the enrollee have jointly agreed to waive any
internal appeal. Such request shall be in writing in accordance with the
instructions and in such form prescribed by  subdivision  five  of  this
section.  The  enrollee,  and  the enrollee's health care provider where
applicable, shall have the opportunity to submit  additional  documenta-
tion with respect to such appeal to the external appeal agent within the
applicable time period above; provided however that when such documenta-
tion  represents a material change from the documentation upon which the
utilization review agent based its adverse determination or  upon  which
the health plan based its denial, the health plan shall have three busi-
ness  days  to  consider  such  documentation  and amend or confirm such
adverse determination.
  S 4. This act shall take effect on the thirtieth day  after  it  shall
have become a law.

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Senate Bill S6551

Sponsored By

Archive: Last Bill Status - In Senate Committee Insurance Committee

Actions

2011-S6551 (ACTIVE) - Details

2011-S6551 (ACTIVE) - Summary

2011-S6551 (ACTIVE) - Sponsor Memo

2011-S6551 (ACTIVE) - Bill Text download pdf

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Sponsored By

Kemp Hannon

Archive: Last Bill Status - In Senate Committee Insurance Committee

Actions

2011-S6551 (ACTIVE) - Details

2011-S6551 (ACTIVE) - Summary

2011-S6551 (ACTIVE) - Sponsor Memo

2011-S6551 (ACTIVE) - Bill Text download pdf

Comments