Senate Bill S2496

                                 
BILL NUMBER: S2496

SPONSOR: GOUNARDES
 
TITLE OF BILL:

An act to amend the insurance law, in relation to the coordination of
no-fault benefits for persons injured in motor vehicle accidents

 
PURPOSE OR GENERAL IDEA OF BILL:

This bill provides for a smoother administration of no-fault benefits
under the Comprehensive Motor Vehicle Insurance Reparations Act.

 
SUMMARY OF PROVISIONS:

Section one of this bill adds a new section 5110 to the Insurance Law to
provide that any medical provider who renders care or supplies a product
to a victim of a motor vehicle crash within 72 hours of such crash is
presumed to have accepted and consented to an assignment of no-fault
benefits. Medical providers who mistakenly bill an insurer other than
the no-fault insurer for no-fault benefits must return such fees and
seek payment from the no-fault insurer instead.  Non-no-fault carriers
              

who pay for the emergency treatment of a person who was eligible for
no-fault, meanwhile, have a right of direct action against the no-fault
carrier for reimbursement of claims paid.

Section two sets the effective date.

 
JUSTIFICATION:

The Comprehensive Motor Vehicle Insurance Reparations Act, as outlined
in Article 51 of the Insurance Law, establishes New York's "no-fault"
insurance system for motor vehicle crashes. The no-fault system was
established to lower the cost of auto insurance by taking small claims
out of the court system. Each insurance provider compensates its own
policyholder, regardless of who is at fault for the crash, and there are
certain restrictions on parties' ability to sue.

The no-fault system was created to ensure efficient and comprehensive
payment for crash-related medical treatment by making one entity, a
no-fault auto insurance carrier, responsible for all medical payments
and lost earnings suffered by a victim of a crash. This goal is under-
mined, however, when health care providers such as in-hospital ER and
radiology personnel and medical equipment suppliers decline to accept
no-fault benefits and instead bill a non-no-fault insurer such as an
employment-based healthcare insurer for services rendered. Once the
non-no-fault carrier pays for the benefits, they are forced to seek
reimbursement directly from the victim rather than the no-fault carrier
due to case law.

This bill seeks to remedy this situation by requiring healthcare provid-
ers to bill no-fault carriers directly when presented with proof of
applicable no-fault coverage. It also provides that a healthcare provid-
er is presumed to have accepted no-fault benefits within 72 hours of
treatment if the provider knows that the injuries or conditions being
treated are due to a car crash. Finally, this bill creates a right of
direct action for non-no-fault carriers against no-fault carriers to
recoup benefits that should have been paid out by the no-fault carrier.

Removing car crash victims from the conflict between no-fault auto
carriers and regular health insurers when the wrong insurer has been
billed through no fault of the patient will provide for a smoother coor-
dination of benefits among carriers and medical providers. This bill
will allow for the expeditious transfer of liability for crash-related
medical treatment, without cumbersome and unnecessary unwinding and
re-billing of payments.

 
PRIOR LEGISLATIVE HISTORY:

2023-2024: S344 - Referred to Insurance

2021-2022: S6735 - Referred to Insurance

 
FISCAL IMPLICATIONS:

TBD

 
EFFECTIVE DATE:
Immediate