senate Bill S5895

2013-2014 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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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jan 08, 2014 referred to insurance
Jun 19, 2013 referred to rules

S5895 - Bill Details

Current Committee:
Senate Insurance
Law Section:
Insurance Law
Laws Affected:
Amd §§3217-a & 4324, add §3240, Ins L; amd §4408, Pub Health L
Versions Introduced in 2011-2012 Legislative Session:
A7489B, S5068A

S5895 - Bill Texts

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

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BILL NUMBER:S5895

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 OR GENERAL IDEA OF 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 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 nonprofit bench-marking 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 4409 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 data-base 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 Superintendent of Insurance to
disapprove issuance of a health insurance policy offering coverage fox
out of network care that will not provide significant coverage of the
usual costs of receiving care out of the plants network. It would also
better assure that health insurance companies arc 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.

PRIOR LEGISLATIVE HISTORY:

New Bill

FISCAL IMPLICATIONS:

None to the state

EFFECTIVE DATE:

This act shall take effect 60 days after becoming law, 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
________________________________________________________________________

                                  5895

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                              June 19, 2013
                               ___________

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

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
CERTIFIED  PURSUANT  TO  ARTICLE  FORTY-FOUR  OF  THE PUBLIC HEALTH LAW,
CREATED AS A RESULT OF SETTLEMENTS ENTERED  INTO  DURING  THE  YEAR  TWO

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD01205-01-3

S. 5895                             2

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
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

S. 5895                             3

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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