Senate Bill S7779

2011-2012 Legislative Session

Relates to limits on certain supplementary insurance

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Archive: Last Bill Status - In Senate Committee Rules 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
Jun 18, 2012	referred to rules

2011-S7779 (ACTIVE) - Details

Current Committee:: Senate Rules
Law Section:: Insurance Law
Laws Affected:: Amd §3420, add §5109-a, Ins L

2011-S7779 (ACTIVE) - Summary

Relates to limits on certain supplementary insurance; permits insured to refuse supplementary insurance; requires certain disclaimer; relates to certain claims of durable medical equipment providers.

2011-S7779 (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S7779

TITLE OF BILL:
An act
to amend the insurance law, in relation to limits on certain
supplementary insurance;
and in relation to providers of durable medical equipment

PURPOSE:
The purpose of this bill is to provide for increased SUM
coverage and to allow the Superintendent of Financial Services to
decertify providers of durable medical equipment from providing
services under no-fault.

SUMMARY OF PROVISIONS:
This bill would change the required amount of
supplementary uninsured/underinsured motorist (SUM) coverage from a
maximum amount that is the same as bodily injury to a minimum amount
that is the same as bodily injury. In addition, this bill would
automatically require the purchase of SUM coverage but also give the
insured the option decline SUM coverage or to purchase lower amounts
than the statutory minimum. The insurer or agent would be required to
disclose to the insured what SUM coverage is and how much the insured
may purchase. If the insured declines to purchase SUM coverage, he or
she must acknowledge the declination in writing.

In addition, this bill would allow the Superintendent, after notice
and hearing, to prohibit a fraudulent provider of durable medical
equipment from demanding or requesting payment under the no-fault law.

JUSTIFICATION:
This bill would amend the insurance law in relation to
unknowingly waiving supplementary insurance coverage. Supplementary
insurance, also known as uninsured or underinsured motorist
insurance, protects motorists who suffer severe and devastating
injuries in accidents with drivers who carry inadequate or no
insurance. Few drivers are aware of the value of supplementary
insurance and insurance companies rarely offer supplementary
insurance coverage above the statutory minimum This bill will ensure
that drivers are fully protected by supplementary insurance, equal to
the bodily injury liability insurance coverage they select, unless
they affirmatively elect lower coverage.

The bill also allows the superintendent of financial services to
establish a mechanism to decertify providers of durable medical
equipment from the no-fault system if they have engaged in fraudulent
activities or billing practices. This is similar to provisions of the
insurance law enacted in 2005 to decertify physicians who engage in
no-fault fraud. In recent years an increasing portion of the
no-fault fraud has been observed in the area of durable medical
equipment (DMF). In many instances the DME wholesaler is involved in
the scam and the provider is committing fraud in conjunction with the
medical supply companies. Many of these DME frauds occur in the
following manner.


Many items are subject to the fee schedule. Items not subject to the
fee schedule are billed at a rate of 50% profit.
For example, TENS and EMS machines (which emit electrical impulses)
perform nearly the same functions. Until last year TENS machines were
not subject to the fee schedule, so TENS and EMS billing was
relatively equal.
However, last year TENS machines were put on the fee schedule. It is no
coincidence that no-fault fraudsters are reducing TENS billings and
EMS billings have dramatically increased so that those fraudsters can
fabricate a price and then add in the 50% profit on top.

As is readily seen by these cases, this area of no-fault fraud is
rampant and growing at a tremendous rate producing the fastest and
most cash profit of any fraud. Since January 1, 2009, there have been
739 new DME providers
registered in NYS, There were 340 new facilities registered in
Brooklyn alone but only 10 in Buffalo. In one especially egregious
case. one patient's DME billing included 16 different items totaling
over $6,000 including a luxury turbo bath spa, an infrared heat wand,
a wand massager, two different post-op knee braces. a back support
seat, a TENS belt and others. The patient reports that they never
used any of the items which were billed for.

LEGISLATIVE HISTORY:
New bill.

FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
This act will take effect on the 180th day after it
shall have become a law.

2011-S7779 (ACTIVE) - Bill Text download pdf

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

                                  7779

                            I N  S E N A T E

                              June 18, 2012
                               ___________

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

AN ACT to amend the insurance law, in  relation  to  limits  on  certain
  supplementary  insurance;  and  in  relation  to  providers of durable
  medical equipment

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

  Section 1. Paragraph 2 of subsection (f) of section 3420 of the insur-
ance  law,  as separately amended by chapters 547 and 568 of the laws of
1997, is amended to read as follows:
  (2) (A) Any  [such]  PRIVATE  PASSENGER  AUTOMOBILE  INSURANCE  policy
shall[,  at  the  option  of  the  insured,  also] provide supplementary
uninsured/underinsured motorists insurance for  bodily  injury[,  in  an
amount  up  to] IN THE SAME AMOUNT AS the bodily injury liability insur-
ance limits of coverage provided  under  [such]  THE  PRIVATE  PASSENGER
AUTOMOBILE  INSURANCE policy[, subject to a maximum of two hundred fifty
thousand dollars because of bodily injury to or death of one  person  in
any  one  accident and, subject to such limit for one person, up to five
hundred thousand dollars because of bodily injury to or death of two  or
more  persons  in any one accident, or a combined single limit policy of
five hundred thousand dollars because of bodily injury to  or  death  of
one  or  more  persons in any one accident. Provided however, an insurer
issuing such policy, in lieu of offering to the  insured  the  coverages
stated above, may provide supplementary uninsured/underinsured motorists
insurance  for  bodily  injury,  in  an  amount  up to the bodily injury
liability insurance limits  of  coverage  provided  under  such  policy,
subject  to  a maximum of one hundred thousand dollars because of bodily
injury to or death of one person in any one  accident  and,  subject  to
such  limit for one person, up to three hundred thousand dollars because
of bodily injury to or death of two or more persons in any one accident,
or a combined single limit policy  of  three  hundred  thousand  dollars
because  of  bodily injury to or death of one or more persons in any one
accident, if such insurer also makes available a personal umbrella poli-
cy with liability coverage limits up to at least five  hundred  thousand

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

                                                           LBD16335-01-2

S. 7779                             2

dollars    which    also    provides    coverage    for    supplementary
uninsured/underinsured motorists claims].  THE COVERAGE  REQUIRED  UNDER
THIS PARAGRAPH IS NOT APPLICABLE WHEN, OR TO THE EXTENT THAT, AN INSURED
NAMED  IN  THE POLICY MAKES A REJECTION OF THE COVERAGE ON BEHALF OF ALL
INSUREDS UNDER THE POLICY.  SUCH REJECTION MAY BE  MEMORIALIZED  BY  THE
INSURER  THROUGH A SIGNED WRITING, AUDIO RECORDING, ELECTRONIC SIGNATURE
OR ANY OTHER MEANS EVIDENCING THE INSURED'S REJECTION OF SUCH  COVERAGE.
Supplementary  uninsured/underinsured  motorists insurance shall provide
coverage, in any state or Canadian province, if the limits of  liability
under  all  bodily  injury  liability  bonds  and  insurance policies of
[another] ANY OTHER motor vehicle liable for damages  are  in  a  lesser
amount  than  the  bodily  injury liability insurance limits of coverage
provided by such policy. Upon written request by any insured covered  by
supplemental  uninsured/underinsured  motorists  insurance  or  his duly
authorized representative and upon disclosure  by  the  insured  of  the
insured's  bodily  injury and supplemental uninsured/underinsured motor-
ists insurance coverage limits, the insurer of any other owner or opera-
tor of another motor vehicle against which a claim  has  been  made  for
damages  to  the  insured  shall disclose, within forty-five days of the
request, the bodily injury liability insurance limits  of  its  coverage
provided under the policy or all bodily injury liability bonds. The time
of the insured to make any supplementary uninsured/underinsured motorist
claim,  shall be tolled during the period the insurer of any other owner
or operator of another motor vehicle that may be liable for  damages  to
the insured, fails to so disclose its coverage. As a condition precedent
to  the  obligation  of  the  insurer  to  pay  under  the supplementary
uninsured/underinsured  motorists  insurance  coverage,  the  limits  of
liability  of  [all] bodily injury liability bonds or insurance policies
applicable at the time of the accident shall be exhausted by payment  of
judgments or settlements.
  (B)  [In addition to the notice provided, upon issuance of a policy of
motor vehicle liability insurance pursuant to regulations promulgated by
the superintendent,] AT THE TIME THE POLICY IS SOLD, PURCHASED OR  NEGO-
TIATED  insurers  shall notify insureds, in [writing] WRITTEN, VERBAL OR
ELECTRONIC FORMAT, of  the  NATURE  AND  availability  of  supplementary
uninsured/underinsured  motorists  coverage  AND  SHALL  STATE  THAT THE
COVERAGE IS EQUAL TO BODILY INJURY LIABILITY LIMITS UNLESS LOWER  LIMITS
ARE  REQUESTED  OR  THE  COVERAGE  IS  REJECTED. Such notification shall
contain an explanation of supplementary uninsured/underinsured motorists
coverage and the amounts in which it can  be  purchased.    SUCH  NOTICE
SHALL  STATE  THE FOLLOWING OR INCLUDE INFORMATION SUBSTANTIALLY SIMILAR
TO THE FOLLOWING:
  "SUPPLEMENTARY UNINSURED/UNDERINSURED MOTORISTS COVERAGE  (SUM  COVER-
AGE)  SHALL  BE  EQUAL  TO  BODILY  INJURY LIABILITY LIMITS UNLESS LOWER
LIMITS ARE REQUESTED OR THE COVERAGE IS REJECTED. A POLICYHOLDER  SHOULD
CONSIDER  PURCHASING SUM COVERAGE IN ORDER TO PROTECT AGAINST THE POSSI-
BILITY OF AN ACCIDENT INVOLVING ANOTHER MOTOR  VEHICLE  WHOSE  OWNER  OR
OPERATOR WAS NEGLIGENT AND WHO MAY HAVE NO INSURANCE WHATSOEVER; OR EVEN
IF  INSURED, IS ONLY INSURED FOR THIRD-PARTY BODILY INJURY AT RELATIVELY
LOW LIABILITY LIMITS, IN COMPARISON TO THE POLICYHOLDER'S OWN  LIABILITY
LIMITS  FOR  BODILY INJURY SUSTAINED BY THIRD-PARTIES. BY PURCHASING SUM
COVERAGE, WHICH CANNOT BE PURCHASED IN AN AMOUNT EXCEEDING THE AMOUNT OF
THIRD PARTY LIABILITY  COVERAGE  PURCHASED,  THE  POLICYHOLDER  AND  ANY
INSURED  UNDER  THE  POLICY  CAN BE PROTECTED FOR BODILY INJURY TO THEM-
SELVES, UP TO THE LIMIT OF THE SUM COVERAGE PURCHASED; AND RECEIVE  FROM
THE POLICYHOLDER'S OWN INSURANCE PAYMENT FOR BODILY INJURY SUSTAINED DUE

S. 7779                             3

TO  THE  NEGLIGENCE  OF  THE  OTHER  MOTOR VEHICLE'S OWNER OR OPERATOR."
Subsequently, a notification of availability shall be provided at  least
once a year and may be simplified pursuant to regulations promulgated by
the superintendent, but must include a concise statement that supplemen-
tary uninsured/underinsured motorists coverage is available, an explana-
tion  of  such  coverage,  and the coverage limits that can be purchased
from the insurer.
  (C) WHEN THERE IS A DISPUTE BETWEEN AN INSURER AND  INSURED  OVER  THE
AMOUNT OF SUPPLEMENTARY UNINSURED/UNDERINSURED MOTORISTS COVERAGE AVAIL-
ABLE ON A CLAIM AND THE INSURER ULTIMATELY PROVIDES COVERAGE HIGHER THAN
THE AMOUNT OF PREMIUM THE INSURER IS CHARGING FOR, AN INSURER MAY DEDUCT
ANY  PREMIUM DUE FROM A RE-RATING OF THE POLICY BACK TO THE POLICY ISSUE
DATE AGAINST ANY BENEFITS DUE ON THE CLAIM.
  S 2. The insurance law is amended by adding a new  section  5109-a  to
read as follows:
  S 5109-A. UNAUTHORIZED PROVIDERS OF DURABLE MEDICAL EQUIPMENT. (A) THE
SUPERINTENDENT MAY PROHIBIT A PROVIDER OF DURABLE MEDICAL EQUIPMENT FROM
DEMANDING  OR  REQUESTING PAYMENT UNDER THIS ARTICLE FOR DURABLE MEDICAL
EQUIPMENT FOR A PERIOD TO BE DETERMINED BY  THE  SUPERINTENDENT  IF  THE
SUPERINTENDENT DETERMINES, AFTER NOTICE AND A HEARING, THAT THE PROVIDER
OF DURABLE MEDICAL EQUIPMENT:
  (1) HAS ENGAGED IN FRAUDULENT, EXCESSIVE OR UNLAWFUL BILLING OF INSUR-
ANCE COMPANIES FOR DURABLE MEDICAL EQUIPMENT;
  (2) HAS BILLED INSURANCE COMPANIES FOR DURABLE MEDICAL EQUIPMENT WHICH
WAS NOT PROVIDED;
  (3) HAS BILLED INSURANCE COMPANIES FOR DURABLE MEDICAL EQUIPMENT WHICH
WAS NOT NECESSARY;
  (4)  HAS  COMMITTED  A  FRAUDULENT INSURANCE ACT AS DEFINED IN SECTION
176.05 OF THE PENAL LAW;
  (5) HAS BEEN CONVICTED OF A CRIME INVOLVING  FRAUDULENT  OR  DISHONEST
PRACTICES;
  (6)  HAS REFUSED TO APPEAR BEFORE, OR ANSWER ANY QUESTION UPON REQUEST
OF, THE SUPERINTENDENT OR ANY DULY AUTHORIZED OFFICER OF THIS  STATE  OR
REFUSED  TO  PRODUCE  ANY RELEVANT INFORMATION CONCERNING THE CONDUCT OF
THE PROVIDER OF DURABLE MEDICAL EQUIPMENT  IN  CONNECTION  WITH  DURABLE
MEDICAL EQUIPMENT PROVIDED UNDER THIS ARTICLE; OR
  (7)  HAS VIOLATED ANY PROVISION OF THIS ARTICLE OR REGULATIONS PROMUL-
GATED THEREUNDER.
  (B) A PROVIDER OF  DURABLE  MEDICAL  EQUIPMENT  SHALL  NOT  DEMAND  OR
REQUEST  PAYMENT UNDER THIS ARTICLE FOR DURABLE MEDICAL EQUIPMENT DURING
THE TERM OF THE PROHIBITION ORDERED BY THE  SUPERINTENDENT  PURSUANT  TO
SUBSECTION (A) OF THIS SECTION.
  (C)  THE SUPERINTENDENT SHALL MAINTAIN A DATABASE CONTAINING A LIST OF
PROVIDERS OF DURABLE MEDICAL EQUIPMENT PROHIBITED BY THIS  SECTION  FROM
DEMANDING  OR  REQUESTING PAYMENT FOR DURABLE MEDICAL EQUIPMENT RENDERED
UNDER THIS ARTICLE AND SHALL  MAKE  THE  INFORMATION  AVAILABLE  TO  THE
PUBLIC.
  (D)  NOTHING  IN  THIS  SECTION  SHALL BE CONSTRUED AS LIMITING IN ANY
RESPECT THE POWERS AND DUTIES OF ANY OTHER STATE OR  FEDERAL  AGENCY  OR
INSURERS  TO  INVESTIGATE  INSTANCES  OF  MISCONDUCT  BY DURABLE MEDICAL
EQUIPMENT PROVIDERS AND TAKE APPROPRIATE ACTION PURSUANT  TO  ANY  OTHER
PROVISION OF LAW.
  S  3.    This  act  shall take effect on the one hundred eightieth day
after it shall have become a law, and shall apply to insurance  policies
and contracts issued, entered into or renewed on and after such date.

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Senate Bill S7779

Sponsored By

Archive: Last Bill Status - In Senate Committee Rules Committee

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2011-S7779 (ACTIVE) - Details

2011-S7779 (ACTIVE) - Summary

2011-S7779 (ACTIVE) - Sponsor Memo

2011-S7779 (ACTIVE) - Bill Text download pdf

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Sponsored By

James L. Seward

Archive: Last Bill Status - In Senate Committee Rules Committee

Actions

2011-S7779 (ACTIVE) - Details

2011-S7779 (ACTIVE) - Summary

2011-S7779 (ACTIVE) - Sponsor Memo

2011-S7779 (ACTIVE) - Bill Text download pdf

Comments