BILL NUMBER: S8414

SPONSOR: BRESLIN
 
TITLE OF BILL:

An act to amend the insurance law, in relation to required terms for
certain insurance contracts

 
PURPOSE OR GENERAL IDEA OF BILL:

This bill requires insurers to include basic provisions in their
contracts with health care providers that will offer providers more
clarity and reliability concerning reimbursement issues.

 
SUMMARY OF PROVISIONS:

Section one amends paragraph 3 of subsection (e) of section 3217-b of
the insurance law to clarify an insurer's obligation to describe records
or information relied upon to calculate payments and adjustments made to
health care providers, including to provide dates of service, patient
identification numbers, identification of the services for which
payments are being made, and the reimbursement paid for each such
              

service. Section one also adds new paragraphs (3-a), (3-b) and (3-c) to
identify the methods of payment insurers may use to reimburse health
care providers, require insurers to make payments in full without encum-
brances, costs, charges or fees being assessed to the provider, require
insurers to receive advance written consent from health care providers
concerning the method of payment to be used, and direct insurers to
notify providers annually of the updated payment rate schedule applica-
ble to such provider, as well as the median rate paid by the insurer for
comparable services within the provider's service area. § 2 establishes
the effective date.

 
JUSTIFICATION:

Medical and dental practices are small businesses. Like other small
businesses, they must track revenues and expenses to make crucial deci-
sions concerning personnel management and overhead costs. Under current
law, there is a frequent lack of clarity and reliability in
insurer/provider relations. Standard contracts are not required to
include provisions that obligate insurers to notify providers annually
of the applicable reimbursement rate schedule, do not require insurers
to provide information that connects a particular payment to particular
services rendered, and do not mandate insurers to bear the cost of tran-
saction fees and other charges associated with the payment method used
to reimburse a provider. Such contractual ambiguities, paired with the
position of strength from which insurers typically negotiate provider
contracts, hobble health care providers when seeking to effectively
manage their businesses.  By requiring insurers to include certain basic
contract provisions that give network providers valuable information,
this bill will support these small businesses in caring for their
patients while also helping them to survive and thrive in the communi-
ties they serve.

 
PRIOR LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
None.

 
EFFECTIVE DATE:
This act shall take effect on the thirtieth day after it shall have
become a law and shall apply to all contracts entered into, renewed,
modified or amended on or after such effective date.