S T A T E O F N E W Y O R K
________________________________________________________________________
6937
2023-2024 Regular Sessions
I N A S S E M B L Y
May 9, 2023
___________
Introduced by M. of A. WEPRIN -- read once and referred to the Committee
on Insurance
AN ACT to amend the insurance law and the public health law, in relation
to downcoding on initial review and audits reversing or altering
medical necessity determinations
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Paragraphs 4 and 5 of subsection (b) of section 3224-b of
the insurance law are renumbered paragraphs 6 and 7 and two new para-
graphs 4 and 5 are added to read as follows:
(4) A REVIEW OR AUDIT OF CLAIMS BY OR ON BEHALF OF A HEALTH PLAN SHALL
NOT REVERSE OR OTHERWISE ALTER A MEDICAL NECESSITY DETERMINATION, WHICH
INCLUDES A SITE OF SERVICE OR LEVEL OF CARE DETERMINATION MADE BY A
UTILIZATION REVIEW AGENT OR EXTERNAL APPEAL AGENT PURSUANT TO ARTICLE
FORTY-NINE OF THIS CHAPTER OR ARTICLE FORTY-NINE OF THE PUBLIC HEALTH
LAW.
(5) A REVIEW OR AUDIT OF CLAIMS BY OR ON BEHALF OF A HEALTH PLAN SHALL
NOT DOWNGRADE THE CODING OF A CLAIM IF IT HAS THE EFFECT OF REVERSING OR
ALTERING A MEDICAL NECESSITY DETERMINATION, WHICH INCLUDES A SITE OF
SERVICE OR LEVEL OF CARE DETERMINATION MADE BY OR ON BEHALF OF THE
HEALTH PLAN; PROVIDED HOWEVER, THAT NOTHING IN THIS PARAGRAPH SHALL
LIMIT A HEALTH PLAN'S ABILITY TO REVIEW OR AUDIT CLAIMS FOR FRAUD, WASTE
OR ABUSE.
§ 2. Subsection (i) of section 3224-a of the insurance law, as amended
by section 10 of part YY of chapter 56 of the laws of 2020, is amended
to read as follows:
(i) Except where the parties have developed a mutually agreed upon
process for the reconciliation of coding disputes that includes a review
of submitted medical records to ascertain the correct coding for
payment, a general hospital certified pursuant to article twenty-eight
of the public health law shall, upon receipt of payment of a claim for
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD11065-01-3
A. 6937 2
which payment has been adjusted based on a particular coding to a
patient including the assignment of diagnosis and procedure, have the
opportunity to submit the affected claim with medical records supporting
the hospital's initial coding of the claim within thirty days of receipt
of payment. Upon receipt of such medical records, 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 review such information to ascertain the correct
coding for payment based on national coding guidelines accepted by the
centers for Medicare and Medicaid services or the American medical asso-
ciation, to the extent there are codes for such services, including
ICD-10 guidelines to the extent available, and process the claim,
including the correct coding, in accordance with the timeframes set
forth in subsection (a) of this section. In the event the insurer,
organization, or corporation processes the claim consistent with its
initial determination, such decision shall be accompanied by a statement
of the insurer, organization or corporation setting forth the specific
reasons why the initial adjustment was appropriate. An insurer, organ-
ization, or corporation that increases the payment based on the informa-
tion submitted by the general hospital, shall pay to the general hospi-
tal interest on the amount of such increase at the rate set by the
commissioner of taxation and finance for corporate taxes pursuant to
paragraph one of subsection (e) of section one thousand ninety-six of
the tax law, to be computed from the date thirty days after initial
receipt of the claim if transmitted electronically or forty-five days
after initial receipt of the claim if transmitted by paper or facsimile.
Provided, however, a failure to remit timely payment shall not consti-
tute a violation of this section. [Neither the initial or subsequent
processing of the claim by the insurer, organization, or corporation
shall be deemed an adverse determination as defined in section four
thousand nine hundred of this chapter if based solely on a coding deter-
mination.] Nothing in this subsection shall apply to those instances in
which the insurer or organization, or corporation has a reasonable
suspicion of fraud or abuse or when an insurer, organization, or corpo-
ration engages in reasonable fraud, waste and abuse detection efforts;
provided, however, to the extent any subsequent payment adjustments are
made as a result of the fraud, waste and abuse detection processes or
efforts, such payment adjustments shall be consistent on the coding
guidelines required by this subsection.
§ 3. Subsection (a) of section 4900 of the insurance law, as amended
by chapter 586 of the laws of 1998, is amended to read as follows:
(a) "Adverse determination" means a determination by a utilization
review agent that an admission, extension of stay, or other health care
service, upon review based on the information provided, is not medically
necessary, OR A DECISION TO DOWNGRADE THE CODING OF A CLAIM TO A LOWER-
LEVEL SERVICE THAN THE ONE SUBMITTED BY THE PROVIDER FOR REIMBURSEMENT.
§ 4. Subdivision 1 of section 4900 of the public health law, as
amended by chapter 586 of the laws of 1998, is amended to read as
follows:
1. "Adverse determination" means a determination by a utilization
review agent that an admission, extension of stay, or other health care
service, upon review based on the information provided, is not medically
necessary, OR A DECISION TO DOWNGRADE THE CODING OF A CLAIM TO A LOWER-
LEVEL SERVICE THAN THE ONE SUBMITTED BY THE PROVIDER FOR REIMBURSEMENT.
§ 5. This act shall take effect immediately.