Bill Text: NY A00681 | 2011-2012 | General Assembly | Introduced


Bill Title: Provides for the enforcement of prompt settlement and payment of claims for health care services; makes notice and documentation requirements of insurers.

Spectrum: Partisan Bill (Democrat 10-0)

Status: (Introduced - Dead) 2012-01-04 - referred to insurance [A00681 Detail]

Download: New_York-2011-A00681-Introduced.html
                           S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                          681
                              2011-2012 Regular Sessions
                                 I N  A S S E M B L Y
                                      (PREFILED)
                                    January 5, 2011
                                      ___________
       Introduced  by  M.  of  A. MAGNARELLI, GALEF, LUPARDO, MARKEY, ROBINSON,
         LANCMAN -- Multi-Sponsored by -- M. of A.  HOOPER,  McENENY,  PHEFFER,
         WEISENBERG -- read once and referred to the Committee on Insurance
       AN  ACT  to amend the insurance law, in relation to prompt settlement of
         claims for health care and payments for health care services
         THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
       BLY, DO ENACT AS FOLLOWS:
    1    Section  1.  Subsections  (a),  (b)  and  (c) of section 3224-a of the
    2  insurance law, as amended by chapter  237  of  the  laws  of  2009,  are
    3  amended to read as follows:
    4    (a)  Except  in a case where the obligation of an insurer or an organ-
    5  ization or corporation licensed or certified pursuant to article  forty-
    6  three or forty-seven of this chapter or article forty-four of the public
    7  health  law to pay a claim submitted by a policyholder or person covered
    8  under such policy ("covered person") or make a payment to a health  care
    9  provider  is  not  reasonably clear, or when there is a reasonable basis
   10  supported by specific information available for  review  by  the  super-
   11  intendent  that such claim or bill for health care services rendered was
   12  submitted fraudulently, such  insurer  or  organization  or  corporation
   13  shall  pay  the  claim  to  a  policyholder  or covered person or make a
   14  payment to a health care provider within thirty days  of  receipt  of  a
   15  claim or bill for services rendered that is transmitted via the internet
   16  or electronic mail, or [forty-five] THIRTY days of receipt of a claim or
   17  bill  for  services  rendered  that is submitted by other means, such as
   18  paper or facsimile.
   19    (b) In a case where the obligation of an insurer or an organization or
   20  corporation licensed or certified pursuant  to  article  forty-three  or
   21  forty-seven  of  this chapter or article forty-four of the public health
   22  law to pay a claim or make a payment for health care  services  rendered
   23  is not reasonably clear due to a good faith dispute regarding the eligi-
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD03157-01-1
       A. 681                              2
    1  bility  of  a  person  for coverage, the liability of another insurer or
    2  corporation or organization for all or part of the claim, the amount  of
    3  the  claim,  the  benefits covered under a contract or agreement, or the
    4  manner in which services were accessed or provided, an insurer or organ-
    5  ization  or corporation shall pay any undisputed portion of the claim in
    6  accordance with this subsection and  notify  the  policyholder,  covered
    7  person or health care provider in writing within [thirty] FIFTEEN calen-
    8  dar days of the receipt of the claim:
    9    (1)  that  it  is  not  obligated to pay the claim or make the medical
   10  payment, stating the specific reasons why it is not liable; or
   11    (2) to request all additional information needed to determine  liabil-
   12  ity to pay the claim or make the health care payment AND TO RECEIVE SUCH
   13  INFORMATION  IN  SUCH  A  MANNER  THAT  WILL  ACCOMMODATE THE ELECTRONIC
   14  SUBMISSION AND TRACKING OF SUCH REQUESTED ADDITIONAL INFORMATION.
   15    Upon receipt of the information requested in  paragraph  two  of  this
   16  subsection  or  an  appeal  of  a claim or bill for health care services
   17  denied pursuant to paragraph one  of  this  subsection,  an  insurer  or
   18  organization  or  corporation  licensed or certified pursuant to article
   19  forty-three or forty-seven of this chapter or article forty-four of  the
   20  public health law shall comply with subsection (a) of this section OR IF
   21  THE  CLAIM  IS DENIED, THE PROVIDER SHALL COMPLY WITH PARAGRAPH THREE OF
   22  THIS SUBSECTION.
   23    (3) IN CASES WHERE A PROVIDER HAS SUBMITTED ADDITIONAL INFORMATION AND
   24  THE INSURER, AFTER RECEIVING  SUCH  ADDITIONAL  INFORMATION,  DETERMINES
   25  THAT  IT  WILL  DENY  THE  CLAIM, THE PROVIDER SHALL BE NOTIFIED OF SUCH
   26  DENIAL IN WRITING WITHIN FIFTEEN CALENDAR DAYS OF SUCH DENIAL.
   27    (c) (1) Except as provided in paragraph two of this  subsection,  each
   28  claim  or  bill  for health care services processed in violation of this
   29  section shall constitute a separate violation. In addition to the penal-
   30  ties provided IN ARTICLE TWENTY-FOUR OF THIS  CHAPTER  OR  ELSEWHERE  in
   31  this  chapter,  any insurer or organization or corporation that fails to
   32  adhere to the standards contained in this section shall be obligated  to
   33  pay  to the health care provider or person submitting the claim, in full
   34  settlement of the claim or bill for health care services, the amount  of
   35  the  claim  or  health  care payment plus interest on the amount of such
   36  claim or health care payment of the greater of the  rate  equal  to  the
   37  rate set by the commissioner of taxation and finance for corporate taxes
   38  pursuant  to  paragraph  one  of  subsection (e) of section one thousand
   39  ninety-six of the tax law or twelve percent per annum,  to  be  computed
   40  from  the date the claim or health care payment was required to be made.
   41  When the amount of interest due on such a claim is less [then] THAN  two
   42  dollars,  [and]  AN  insurer or organization or corporation shall not be
   43  required to pay interest on such claim.
   44    (2) Where a violation of this section is determined by the superinten-
   45  dent as a result of the superintendent's own investigation, examination,
   46  audit or inquiry, an insurer or organization or corporation licensed  or
   47  certified pursuant to article forty-three or forty-seven of this chapter
   48  or article forty-four of the public health law shall not be subject to a
   49  civil  penalty  prescribed  in  paragraph one of this subsection, if the
   50  superintendent determines that the insurer  or  organization  or  corpo-
   51  ration  has  otherwise  processed  at  least ninety-eight percent of the
   52  claims submitted in a calendar year in  compliance  with  this  section;
   53  provided,  however,  nothing  in this paragraph shall limit, preclude or
   54  exempt an insurer or organization or corporation from payment of a claim
   55  and payment of interest pursuant to this section. This  paragraph  shall
   56  not apply to violations of this section determined by the superintendent
       A. 681                              3
    1  resulting  from individual complaints submitted to the superintendent by
    2  health care providers or policyholders.
    3    S  2. Section 3224-a of the insurance law is amended by adding two new
    4  subsections (i) and (j) to read as follows:
    5    (I) IN ADDITION TO THE PROVISIONS OF SUBSECTION (C) OF  THIS  SECTION,
    6  ANY  POLICYHOLDER  OR  HEALTH  CARE PROVIDER MAY COMMENCE AN ACTION IN A
    7  COURT OF COMPETENT JURISDICTION ON HIS OR  HER  OWN  BEHALF  AGAINST  AN
    8  INSURER  FOR  FAILURE  TO  COMPLY  WITH  ANY  OF  THE PROVISIONS OF THIS
    9  SUBSECTION. SUCH ACTION SHALL BE BROUGHT IN  THE  COUNTY  IN  WHICH  THE
   10  ALLEGED  VIOLATION  OCCURRED OR WHERE THE COMPLAINANT RESIDES. THE COURT
   11  MAY IMPOSE THE CIVIL PENALTY PROVIDED FOR  IN  SUBSECTION  (C)  OF  THIS
   12  SECTION AND/OR THE PENALTY PROVIDED FOR IN SUBSECTION (A) OF SECTION TWO
   13  THOUSAND FOUR HUNDRED SIX OF THIS CHAPTER. ANY FINAL ORDER ISSUED PURSU-
   14  ANT  TO THIS SUBSECTION MAY AWARD COSTS OF LITIGATION, INCLUDING REASON-
   15  ABLE ATTORNEYS' FEES, TO THE PREVAILING PARTY WHENEVER THE  COURT  DEEMS
   16  SUCH  AWARD  IS  APPROPRIATE.  IN  ANY  ACTION  BROUGHT PURSUANT TO THIS
   17  SUBSECTION, THE SUPERINTENDENT MAY INTERVENE AS A MATTER OF RIGHT.
   18    (J) EVERY SIX MONTHS, INSURERS SHALL PREPARE  A  LIST  OF  CLAIMS  FOR
   19  WHICH  THEY  WILL ALWAYS REQUEST OPERATIVE NOTES AND/OR DOCUMENTATION OF
   20  MEDICAL NECESSITY AND SHALL MAKE SUCH LIST AVAILABLE TO ALL  PARTICIPAT-
   21  ING  PROVIDERS. INSURERS SHALL ACCOMMODATE THE ELECTRONIC SUBMISSION AND
   22  TRACKING OF SUCH OPERATIVE NOTES AND/OR DOCUMENTATION OF MEDICAL  NECES-
   23  SITY AT THE TIME OF SUBMISSION OF THE INITIAL CLAIM.
   24    S  3.  Subsection (a) of section 2406 of the insurance law, as amended
   25  by chapter 666 of the laws of 1997, is amended to read as follows:
   26    (a) If the hearing was on a charge of a defined violation  the  super-
   27  intendent  shall  make  an  order  on his report and serve a copy of the
   28  findings and order upon the person charged with the  violation  and  any
   29  intervenor.  If  the  superintendent finds that the person complained of
   30  has engaged in a defined violation, the order shall require  the  person
   31  to  cease  and desist from engaging in such defined violation.  Further-
   32  more, if the superintendent finds, after notice and  hearing,  that  the
   33  person  complained  of has engaged in an act prohibited by section three
   34  thousand two hundred twenty-four-a of this chapter,  the  superintendent
   35  is  authorized  to levy a civil penalty against such person in an amount
   36  up to five hundred dollars per day for each day beyond the date  that  a
   37  bill or claim was to be processed in accordance with section three thou-
   38  sand  two  hundred  twenty-four-a of this chapter, but in no event shall
   39  such penalty exceed five thousand dollars; AND FURTHERMORE,  THE  SUPER-
   40  INTENDENT  MAY REVOKE ANY LICENSE ISSUED TO AN INSURER LICENSED PURSUANT
   41  TO THIS CHAPTER IF, AFTER NOTICE AND HEARING, HE OR SHE FINDS THAT  SUCH
   42  INSURER HAS FAILED TO COMPLY WITH ANY REQUIREMENT IMPOSED UPON IT BY THE
   43  PROVISIONS  OF  THIS  SECTION MORE THAN SIX TIMES WITHIN A CALENDAR YEAR
   44  AND IF IN HIS OR HER JUDGMENT SUCH REVOCATION IS REASONABLY NECESSARY TO
   45  PROTECT THE INTERESTS OF THE PEOPLE OF THIS  STATE.  THE  SUPERINTENDENT
   46  MAY  IN  HIS  OR  HER DISCRETION REINSTATE ANY SUCH LICENSE IF HE OR SHE
   47  FINDS THAT A GROUND FOR SUCH REVOCATION NO LONGER EXISTS.
   48    S 4. Section 3217-a of the insurance law is amended by  adding  a  new
   49  subsection (f) to read as follows:
   50    (F)  NOTWITHSTANDING  ANY  CONTRARY  PROVISION OF LAW, ANY EMPLOYER IN
   51  THIS STATE PROVIDING A SELF-INSURED EMPLOYEE WELFARE  BENEFIT  PLAN,  AS
   52  DEFINED  IN  THE  EMPLOYEE  RETIREMENT  INCOME  SECURITY ACT OF 1974, AS
   53  AMENDED, SHALL PROVIDE INSUREDS  WITH  IDENTIFICATION  CARDS  INDICATING
   54  THAT SUCH INSURED'S PLAN IS A SELF-INSURED PLAN AND SHALL INFORM PROVID-
   55  ERS ON REQUEST THAT SUCH INSURED'S PLAN IS A SELF-INSURED PLAN.
       A. 681                              4
    1    S 5. This act shall take effect on the one hundred eightieth day after
    2  it shall have become a law; provided, however, that effective immediate-
    3  ly,  the  addition,  amendment  and/or  repeal of any rule or regulation
    4  necessary for the implementation of this act on its effective  date  are
    5  authorized  and  directed  to  be  made  and completed on or before such
    6  effective date.
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