Senate Bill S7780

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-S7780 (ACTIVE) - Details

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

2011-S7780 (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-S7780 (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S7780

TITLE OF BILL:
An act
to amend the insurance law, in relation to limits on certain
supplementary insurance

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-limit 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 30th day after it
shall have become a law.

2011-S7780 (ACTIVE) - Bill Text download pdf

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

                                  7780

                            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

  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 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 insurance limits of coverage provided under such  poli-
cy[,  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  policy  with liability coverage
limits up to at least five hundred thousand dollars which also  provides
coverage  for  supplementary  uninsured/underinsured  motorists claims].
THE COVERAGE REQUIRED UNDER THIS PARAGRAPH IS NOT APPLICABLE WHEN, OR TO

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

                                                           LBD16327-02-2

S. 7780                             2

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
SHALL  BE  MEMORIALIZED  BY  THE INSURER THROUGH A SIGNED WRITING, AUDIO
RECORDING  OR ELECTRONIC SIGNATURE EVIDENCING THE INSURED'S REJECTION OF
SUCH COVERAGE. THE FAILURE OF THE CARRIER TO MAINTAIN  THE  MEMORIALIZA-
TION  OF  SUCH  REJECTION  OF  COVERAGE THROUGH THE TIME A CLAIM IS MADE
SHALL RESULT IN THE SUPPLEMENTARY UNINSURED/UNDERINSURED MOTORIST COVER-
AGE BEING EQUAL TO THE BODILY INJURY LIABILITY COVERAGE IN EFFECT AT THE
TIME A  CLAIM  ARISES.  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  insur-
ance 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 motorists insurance coverage limits, the  insurer
of  any other owner or operator 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] ANY ONE bodily injury liabil-
ity  [bonds]  BOND or insurance [policies] POLICY applicable at the time
of the accident shall be exhausted by payment of  judgments  or  settle-
ments.
  (B)  [In addition to the notice provided, upon issuance of a policy of
motor vehicle liability insurance pursuant to regulations promulgated by
the superintendent, insurers shall notify insureds, in writing,  of  the
availability of supplementary uninsured/underinsured motorists coverage.
Such   notification   shall  contain  an  explanation  of  supplementary
uninsured/underinsured motorists coverage and the amounts  in  which  it
can  be purchased. Subsequently, a notification of availability shall be
provided at least once a year and may be simplified  pursuant  to  regu-
lations  promulgated  by  the superintendent, but must include a concise
statement that supplementary uninsured/underinsured  motorists  coverage
is  available,  an explanation of such coverage, and the coverage limits
that can be purchased from the insurer.] IF THE REJECTION  OR  SELECTION
OF  LOWER  SUPPLEMENTARY UNINSURED/UNDERINSURED MOTORISTS COVERAGE IS IN
WRITTEN OR ELECTRONIC FORM, THAT SHALL BE MADE ON A FORM APPROVED BY THE
SUPERINTENDENT AND FURNISHED TO THE INSURED AT THE TIME  THE  POLICY  IS
SOLD,  PURCHASED, NEGOTIATED AND/OR RENEWED. THE FORM SHALL FULLY ADVISE
THE INSURED OF THE NATURE OF THE  COVERAGE  AND  SHALL  STATE  THAT  THE
COVERAGE  IS EQUAL TO BODILY INJURY LIABILITY LIMITS UNLESS LOWER LIMITS
ARE REQUESTED OR THE COVERAGE IS REJECTED.   THE  HEADING  OF  THE  FORM
SHALL  BE  IN  12-POINT  BOLD  TYPE  AND  SHALL  STATE:   "SUPPLEMENTARY
UNINSURED/UNDERINSURED MOTORISTS COVERAGE (SUM COVERAGE) SHALL BE  EQUAL
TO  BODILY  INJURY LIABILITY LIMITS UNLESS LOWER LIMITS ARE REQUESTED OR
THE COVERAGE IS REJECTED. A POLICYHOLDER IS URGED TO CONSIDER PURCHASING
THE MAXIMUM SUM COVERAGE AVAILABLE  IN  ORDER  TO  PROTECT  AGAINST  THE

S. 7780                             3

POSSIBILITY  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 RELA-
TIVELY  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 EXCEED-
ING THE AMOUNT OF THIRD PARTY LIABILITY COVERAGE PURCHASED, THE  POLICY-
HOLDER  AND  ANY  INSURED  UNDER  THE POLICY CAN BE PROTECTED FOR BODILY
INJURY TO THEMSELVES, UP TO THE LIMIT OF THE SUM COVERAGE PURCHASED; AND
RECEIVE FROM THE POLICYHOLDER'S OWN INSURER PAYMENT  FOR  BODILY  INJURY
SUSTAINED  DUE  TO  THE NEGLIGENCE OF THE OTHER MOTOR VEHICLE'S OWNER OR
OPERATOR." IF REJECTION OR SELECTION OF LOWER LIMITS IS  MADE  VERBALLY,
THE  INSURER  OR  THEIR AGENT SHALL READ THE IDENTICAL LANGUAGE AS IS IN
THE ABOVE REJECTION OF MATCHING LIMITS FORM AND CONFIRM THE  CLIENT  HAS
HEARD AND UNDERSTOOD THE SAME, AND SHALL RE-READ THE FORM AS OFTEN AS IS
NECESSARY  UNTIL  THE  INSURED  HAS  VERBALLY  CONFIRMED THAT THEY FULLY
UNDERSTAND THE SAME.   THE INSURER SHALL NOTIFY  THE  NAMED  INSURED  AT
LEAST ANNUALLY OF HER OR HIS OPTIONS AS TO THE COVERAGE REQUIRED BY THIS
PARAGRAPH.  SUCH NOTICE SHALL BE PART OF, AND ATTACHED TO, THE NOTICE OF
PREMIUM, SHALL PROVIDE FOR A MEANS TO ALLOW THE INSURED TO REQUEST  SUCH
COVERAGE, AND SHALL BE GIVEN IN A MANNER APPROVED BY THE SUPERINTENDENT.
IF  THE  INSURED  HAS  REJECTED  COVERAGE  UNDER  THIS  PARAGRAPH OR HAS
SELECTED LOWER LIMITS, THE NOTICE OF PREMIUM SHALL CLEARLY INDICATE  THE
LEVEL  OF  COVERAGE ACCEPTED. RECEIPT OF THIS NOTICE DOES NOT CONSTITUTE
AN AFFIRMATIVE WAIVER OF  THE  INSURED'S  RIGHT  TO  UNINSURED  MOTORIST
COVERAGE WHERE THE INSURED HAS NOT SIGNED A SELECTION OR REJECTION FORM.
  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.

S. 7780                             4

  (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 thirtieth 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 effective date.

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Senate Bill S7780

Sponsored By

Archive: Last Bill Status - In Senate Committee Rules Committee

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2011-S7780 (ACTIVE) - Details

2011-S7780 (ACTIVE) - Summary

2011-S7780 (ACTIVE) - Sponsor Memo

2011-S7780 (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-S7780 (ACTIVE) - Details

2011-S7780 (ACTIVE) - Summary

2011-S7780 (ACTIVE) - Sponsor Memo

2011-S7780 (ACTIVE) - Bill Text download pdf

Comments