Bill Text: NY A09718 | 2009-2010 | General Assembly | Introduced
Bill Title: Relates to standards for prompt, fair and equitable settlement of claims for health care and payments for health care services; prohibits insurers from seeking refunds after 24 months; provides for civil fines for a finding of a pattern or practice of prohibited acts relating to payment of claims.
Spectrum: Partisan Bill (Democrat 26-1)
Status: (Introduced - Dead) 2010-01-20 - referred to insurance [A09718 Detail]
Download: New_York-2009-A09718-Introduced.html
S T A T E O F N E W Y O R K ________________________________________________________________________ 9718 I N A S S E M B L Y January 20, 2010 ___________ Introduced by M. of A. BING, PAULIN, GOTTFRIED, GUNTHER, JAFFEE, STIRPE, SKARTADOS, REILLY, WEISENBERG, CASTRO -- Multi-Sponsored by -- M. of A. BENJAMIN, COOK, CYMBROWITZ, GALEF, HYER-SPENCER, KOON, MAGEE, MARKEY, M. MILLER, PHEFFER, SPANO, SWEENEY -- read once and referred to the Committee on Insurance AN ACT to amend the insurance law, in relation to standards for prompt, fair and equitable 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) and (b) of section 3224-a of the insurance 2 law, as amended by chapter 237 of the laws of 2009, are amended to read 3 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] FIFTEEN days of 15 receipt of a claim or bill for services rendered that is transmitted via 16 the internet or electronic mail, or [forty-five] THIRTY days of receipt 17 of a claim or bill for services rendered that is submitted by other 18 means, such as paper or facsimile. THE INSURER, ORGANIZATION OR CORPO- 19 RATION SHALL NOT DENY PAYMENT FOR A CLAIM FOR MEDICALLY NECESSARY 20 COVERED SERVICES ON THE BASIS OF AN ADMINISTRATIVE OR TECHNICAL DEFECT 21 INCLUDING A FAILURE TO OBTAIN A REFERRAL; UNTIMELY FILING OF THE CLAIM; 22 LATE NOTIFICATION OF A HOSPITAL ADMISSION OR THE PROVISION OF SERVICES 23 THAT THE INSURER, ORGANIZATION OR CORPORATION MAY REQUIRE; A FAILURE TO 24 PROVIDE NOTIFICATION OF A HOSPITAL ADMISSION OR PROVISION OF SERVICES EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD03354-03-0 A. 9718 2 1 THAT THE INSURER, ORGANIZATION OR CORPORATION MAY REQUIRE; A FAILURE TO 2 PROVIDE PROPER REGISTRATION OF A HOSPITAL ADMISSION OR PROVISION OF 3 SERVICES THAT THE INSURER, ORGANIZATION OR CORPORATION MAY REQUIRE; A 4 FAILURE TO REQUEST PROPER AUTHORIZATION OF A HOSPITAL ADMISSION OR 5 PROVISION OF SERVICES THAT THE INSURER, ORGANIZATION OR CORPORATION MAY 6 REQUIRE; OR ANY OTHER ADMINISTRATIVE OR TECHNICAL DEFECT AS THE SUPER- 7 INTENDENT MAY SPECIFY IN A REGULATION AFTER CONSULTATION WITH THE 8 COMMISSIONER OF HEALTH. NOTHING IN THIS SECTION SHALL PRECLUDE A HEALTH 9 CARE PROVIDER AND A HEALTH PLAN FROM AGREEING TO PROVISIONS DIFFERENT 10 FROM THOSE IN THIS SECTION; PROVIDED, HOWEVER, THAT ANY AGREEMENT THAT 11 PURPORTS TO WAIVE, LIMIT, DISCLAIM, OR IN ANY WAY DIMINISH THE RIGHTS OF 12 A HEALTH CARE PROVIDER SET FORTH IN THIS SECTION SHALL BE VOID AS 13 CONTRARY TO PUBLIC POLICY. 14 (b) In a case where the obligation of an insurer or an organization or 15 corporation licensed or certified pursuant to article forty-three or 16 forty-seven of this chapter or article forty-four of the public health 17 law to pay a claim or make a payment for health care services rendered 18 is not reasonably clear due to a good faith dispute regarding the eligi- 19 bility of a person for coverage, the liability of another insurer or 20 corporation or organization for all or part of the claim, the amount of 21 the claim, the benefits covered under a contract or agreement, or the 22 manner in which services were accessed or provided, an insurer or organ- 23 ization or corporation shall pay any undisputed portion of the claim in 24 accordance with this subsection and notify the policyholder, covered 25 person or health care provider in writing within FIFTEEN CALENDAR DAYS 26 OF THE RECEIPT OF THE CLAIM TRANSMITTED ELECTRONICALLY OR VIA THE INTER- 27 NET, OR thirty calendar days of the receipt of the claim SUBMITTED BY 28 OTHER MEANS, SUCH AS PAPER OR FACSIMILE: 29 (1) that it is not obligated to pay the claim or make the medical 30 payment, stating the specific reasons why it is not liable; or 31 (2) to request [all] additional information needed to determine 32 liability to pay the claim or make the health care payment; PROVIDED, 33 HOWEVER, IN RESPONSE TO ITS RECEIPT OF A SPECIFIC CLAIM FOR SERVICES AN 34 INSURER, ORGANIZATION OR CORPORATION SHALL NOT GENERATE AND TRANSMIT A 35 QUESTIONNAIRE IN ORDER TO DETERMINE WHETHER THE POLICYHOLDER OR COVERED 36 PERSON IS COVERED FOR ALL OR PART OF THE CLAIM BY ANOTHER INSURER, 37 CORPORATION OR ORGANIZATION. NOTHING IN THIS SECTION SHALL OTHERWISE 38 PRECLUDE AN INSURER, ORGANIZATION OR CORPORATION FROM SENDING A COORDI- 39 NATION OF BENEFIT QUESTIONNAIRE TO A POLICYHOLDER OR COVERED PERSON AT 40 ANOTHER TIME PROVIDED THAT IN NO EVENT SHALL THE INSURER, ORGANIZATION 41 OR CORPORATION DELAY OR DENY PAYMENT OF A CLAIM WHEN A POLICYHOLDER OR 42 COVERED PERSON DOES NOT COMPLETE AND RETURN SUCH COORDINATION OF BENE- 43 FITS QUESTIONNAIRE. 44 Upon receipt of the information requested in paragraph two of this 45 subsection or an appeal of a claim or bill for health care services 46 denied pursuant to paragraph one of this subsection, an insurer or 47 organization or corporation licensed or certified pursuant to article 48 forty-three or forty-seven of this chapter or article forty-four of the 49 public health law shall comply with subsection (a) of this section. 50 S 2. Subsection (b) of section 3224-b of the insurance law, as amended 51 by chapter 237 of the laws of 2009, is amended to read as follows: 52 (b) Overpayments to health care providers. (1) Other than recovery for 53 duplicate payments, a health plan shall provide thirty days written 54 notice to health care providers [before engaging in additional overpay- 55 ment recovery efforts seeking] OF ITS INTENTION TO SEEK recovery of the 56 overpayment of claims to such health care providers. Such notice shall A. 9718 3 1 state the patient name, service date, payment amount, proposed adjust- 2 ment, and a reasonably specific explanation of the proposed adjustment. 3 A HEALTH PLAN SHALL NOT SEEK RECOVERY FROM A HEALTH CARE PROVIDER 4 UNLESS: THE HEALTH CARE PROVIDER AGREES TO THE RECOVERY IN WRITING; THE 5 HEALTH CARE PROVIDER FAILS TO SEND ITS WRITTEN CHALLENGE OF THE HEALTH 6 PLAN'S OVERPAYMENT RECOVERY WITHIN NINETY DAYS OF RECEIPT OF THE PLAN'S 7 NOTICE OF INTENT TO SEEK OVERPAYMENT RECOVERY; OR THE OVERPAYMENT RECOV- 8 ERY HAS BEEN UPHELD ACCORDING TO PROCEDURES ESTABLISHED BY THE PARTIES 9 IN THEIR CONTRACTUAL AGREEMENT; OR A THIRD-PARTY ARBITRATOR UPHELD THE 10 OVERPAYMENT RECOVERY. 11 (2) A HEALTH PLAN SHALL LIMIT OVERPAYMENT RECOVERY EFFORTS TO: BILLING 12 AND CODING ERRORS; INCORRECT RATE PAYMENTS; INELIGIBILITY OF A PERSON 13 FOR COVERAGE; OR FRAUD. A HEALTH PLAN SHALL NOT INITIATE OVERPAYMENT 14 RECOVERY EFFORTS FOR UTILIZATION REVIEW PURPOSES AS DEFINED IN ARTICLE 15 FORTY-NINE OF THIS CHAPTER OR ARTICLE FORTY-NINE OF THE PUBLIC HEALTH 16 LAW, IF THE SERVICES WERE ALREADY DEEMED MEDICALLY NECESSARY BY THE 17 HEALTH PLAN, OR IF THE HEALTH PLAN PREVIOUSLY APPROVED THE MANNER IN 18 WHICH SERVICES WERE ACCESSED OR PROVIDED. 19 [(2)] (3) A health plan shall provide a health care provider with the 20 opportunity to challenge an overpayment recovery, including the sharing 21 of claims information, and shall establish written policies and proce- 22 dures for health care providers to follow to challenge an overpayment 23 recovery. Such challenge shall set forth the specific grounds on which 24 the provider is challenging the overpayment recovery. THESE WRITTEN 25 POLICIES AND PROCEDURES SHALL INCLUDE A PROVISION STATING THAT A HEALTH 26 CARE PROVIDER SHALL HAVE NO LESS THAN NINETY DAYS FROM RECEIPT OF THE 27 HEALTH PLAN'S WRITTEN NOTICE OF INTENT TO SEEK RECOVERY TO PROVIDE 28 DOCUMENTATION CHALLENGING THE ALLEGED OVERPAYMENTS. ANY CHALLENGE TO AN 29 OVERPAYMENT RECOVERY THAT CANNOT BE RESOLVED BETWEEN THE HEALTH PLAN AND 30 THE HEALTH CARE PROVIDER WITHIN THIRTY DAYS FROM THE HEALTH PLAN'S 31 RECEIPT OF THE PROVIDER'S DOCUMENTATION SHALL BE RESOLVED ACCORDING TO 32 PROCEDURES ESTABLISHED BY THE PARTIES IN THEIR CONTRACTUAL AGREEMENT OR 33 SHALL BE SUBMITTED TO A THIRD-PARTY ARBITRATOR FOR A DETERMINATION. 34 [(3)] (4) A health plan shall not initiate overpayment recovery 35 efforts more than twenty-four months after the original payment was 36 received by a health care provider. However, no such time limit shall 37 apply to overpayment recovery efforts that are: (i) based on a reason- 38 able belief of fraud or other intentional misconduct, [or abusive bill- 39 ing,] (ii) required by, or initiated at the request of, a self-insured 40 plan, or (iii) required or authorized by a state or federal government 41 program or coverage that is provided by this state or a municipality 42 thereof to its respective employees, retirees or members. Notwithstand- 43 ing the aforementioned time limitations, in the event that a health care 44 provider asserts that a health plan has underpaid a claim or claims, the 45 health plan may defend or set off such assertion of underpayment based 46 on overpayments going back in time as far as the claimed underpayment. 47 [For purposes of this paragraph, "abusive billing" shall be defined as a 48 billing practice which results in the submission of claims that are not 49 consistent with sound fiscal, business, or medical practices and at such 50 frequency and for such a period of time as to reflect a consistent 51 course of conduct. 52 (4)] (5) For the purposes of this subsection the term "health care 53 provider" shall mean an entity licensed or certified pursuant to article 54 twenty-eight, thirty-six or forty of the public health law, a facility 55 licensed pursuant to article nineteen, thirty-one or thirty-two of the A. 9718 4 1 mental hygiene law, or a health care professional licensed, registered 2 or certified pursuant to title eight of the education law. 3 [(5)] (6) Nothing in this section shall be deemed to limit a health 4 plan's right to pursue recovery of overpayments that occurred prior to 5 the effective date of this section where the health plan has provided 6 the health care provider with notice of such recovery efforts prior to 7 the effective date of this section. 8 (7) A HEALTH PLAN SHALL NOT PURSUE OVERPAYMENT RECOVERY EFFORTS 9 AGAINST AN INSURED IF THE HEALTH PLAN IS PRECLUDED FROM PURSUING OVER- 10 PAYMENT RECOVERY EFFORTS AGAINST A HEALTH CARE PROVIDER PURSUANT TO 11 PARAGRAPH TWO OF THIS SUBSECTION. 12 (8) A HEALTH PLAN SHALL ASSURE ADHERENCE TO THE REQUIREMENTS STATED IN 13 THIS SECTION BY ALL CONTRACTORS, SUBCONTRACTORS, SUBVENDORS, AGENTS AND 14 EMPLOYEES AFFILIATED BY CONTRACT OR OTHERWISE WITH SUCH LICENSED ENTITY. 15 ALL CONTRACTORS, SUBCONTRACTORS, SUBVENDORS, AGENTS AND EMPLOYEES AFFIL- 16 IATED BY CONTRACT OR OTHERWISE WITH ANY HEALTH PLAN SHALL ALSO ADHERE TO 17 THE REQUIREMENTS OF THIS SECTION. 18 (9) NOTHING IN THIS SECTION SHALL PRECLUDE A HEALTH CARE PROVIDER AND 19 A HEALTH PLAN FROM AGREEING TO PROVISIONS DIFFERENT FROM THOSE IN THIS 20 SECTION; PROVIDED, HOWEVER, THAT ANY AGREEMENT THAT PURPORTS TO WAIVE, 21 LIMIT, DISCLAIM, OR IN ANY WAY DIMINISH THE RIGHTS OF A HEALTH CARE 22 PROVIDER SET FORTH IN THIS SECTION SHALL BE VOID AS CONTRARY TO PUBLIC 23 POLICY. 24 (10) HEALTH CARE PROVIDER SHALL MEAN AN ENTITY LICENSED OR CERTIFIED 25 PURSUANT TO ARTICLE TWENTY-EIGHT, THIRTY-SIX OR FORTY OF THE PUBLIC 26 HEALTH LAW, A FACILITY LICENSED PURSUANT TO ARTICLE NINETEEN, FORMER 27 TWENTY-THREE OR THIRTY-ONE OF THE MENTAL HYGIENE LAW, AND A HEALTH CARE 28 PROFESSIONAL LICENSED, REGISTERED OR CERTIFIED PURSUANT TO TITLE EIGHT 29 OF THE EDUCATION LAW. 30 S 3. The insurance law is amended by adding a new section 3240 to read 31 as follows: 32 S 3240. COVERAGE OF SERVICES OF PARTICIPATING PROVIDERS. AN INSURER 33 LICENSED TO WRITE ACCIDENT AND HEALTH INSURANCE, A CORPORATION ORGANIZED 34 PURSUANT TO ARTICLE FORTY-THREE OF THIS CHAPTER, HEALTH MAINTENANCE 35 ORGANIZATIONS AND OTHER ORGANIZATIONS CERTIFIED PURSUANT TO ARTICLE 36 FORTY-FOUR OF THE PUBLIC HEALTH LAW OR A MUNICIPAL COOPERATIVE HEALTH 37 BENEFITS PLAN CERTIFIED PURSUANT TO ARTICLE FORTY-SEVEN OF THIS CHAPTER 38 (COLLECTIVELY A "HEALTH PLAN") THAT UTILIZES A NETWORK OF PARTICIPATING 39 PROVIDERS IN THE DELIVERY AND PROVISION OF HEALTH INSURANCE BENEFITS 40 SHALL NOT DEEM A HEALTH CARE PROVIDER WHO IS PARTICIPATING IN THE HEALTH 41 PLAN'S PROVIDER NETWORK AND RENDERING MEDICAL SERVICES TO AN INSURED, 42 SUBSCRIBER OR ENROLLEE TO BE OUT-OF-NETWORK BECAUSE ONE OR MORE OTHER 43 HEALTH PROVIDERS RENDERING SERVICES TO THE INSURED, SUBSCRIBER OR ENROL- 44 LEE FOR THE SAME OR RELATED MEDICAL CONDITION, ILLNESS OR INJURY DOES 45 NOT PARTICIPATE IN THE HEALTH PLAN'S PROVIDER NETWORK. THE INSURED, 46 SUBSCRIBER OR ENROLLEE SHALL ONLY BE SUBJECT TO THE IN-NETWORK COST 47 SHARING PROVISIONS OF THE POLICY OR CERTIFICATE FOR THE SERVICES OF SUCH 48 PARTICIPATING PROVIDER OR PROVIDERS. FURTHER, THE HEALTH PLAN SHALL PAY 49 A PARTICIPATING HEALTH CARE PROVIDER OR PROVIDERS THE CONTRACTED RATE 50 FOR SERVICES PROVIDED BY SUCH PARTICIPATING PROVIDER OR PROVIDERS 51 REGARDLESS OF THE NETWORK STATUS OF THE OTHER PROVIDERS. HEALTH CARE 52 PROVIDER SHALL MEAN AN ENTITY LICENSED OR CERTIFIED PURSUANT TO ARTICLE 53 TWENTY-EIGHT, THIRTY-SIX OR FORTY OF THE PUBLIC HEALTH LAW, A FACILITY 54 LICENSED PURSUANT TO ARTICLE NINETEEN, FORMER TWENTY-THREE OR THIRTY-ONE 55 OF THE MENTAL HYGIENE LAW, AND A HEALTH CARE PROFESSIONAL LICENSED, 56 REGISTERED OR CERTIFIED PURSUANT TO TITLE EIGHT OF THE EDUCATION LAW. A. 9718 5 1 S 4. Section 2406 of the insurance law is amended by adding a new 2 subsection (a-1) to read as follows: 3 (A-1) (1) IF, AFTER COMPLETION OF AN INVESTIGATION INVOLVING INFORMA- 4 TION COLLECTED FROM A SIX MONTH PERIOD, NOTICE AND HEARING, THE SUPER- 5 INTENDENT FINDS THAT THE PERSON COMPLAINED OF HAS ENGAGED IN A SERIES OF 6 ACTS PROHIBITED BY SECTION THREE THOUSAND TWO HUNDRED TWENTY-FOUR-A OF 7 THIS CHAPTER THAT, TAKEN TOGETHER, CONSTITUTE A CONSISTENT PATTERN OR 8 PRACTICE, THE SUPERINTENDENT IS AUTHORIZED TO LEVY A CIVIL PENALTY 9 AGAINST SUCH PERSON IN THE FOLLOWING MANNER: 10 (A) FOR THE FIRST FINDING OF A CONSISTENT PATTERN OR PRACTICE, THE 11 SUPERINTENDENT MAY LEVY A FINE OF NOT MORE THAN ONE HUNDRED THOUSAND 12 DOLLARS. 13 (B) FOR A SECOND FINDING OF A CONSISTENT PATTERN OR PRACTICE THAT 14 OCCURS ON OR EARLIER THAN TWO YEARS FROM THE FIRST OFFENSE THE SUPER- 15 INTENDENT MAY LEVY A FINE OF NOT MORE THAN THREE HUNDRED THOUSAND 16 DOLLARS. 17 (C) FOR A THIRD FINDING OF A CONSISTENT PATTERN OR PRACTICE THAT 18 OCCURS ON OR EARLIER THAN FIVE YEARS AFTER A FIRST OFFENSE, THE SUPER- 19 INTENDENT MAY LEVY A FINE OF NOT MORE THAN ONE MILLION DOLLARS. 20 (2) IN DETERMINING THE AMOUNT OF A FINE TO BE LEVIED WITHIN THE SPECI- 21 FIED LIMITS, THE SUPERINTENDENT SHALL CONSIDER THE FOLLOWING FACTORS: 22 (A) THE EXTENT AND FREQUENCY OF THE VIOLATIONS; 23 (B) WHETHER THE VIOLATIONS WERE DUE TO CIRCUMSTANCES BEYOND THE INSUR- 24 ER, ORGANIZATION OR CORPORATION'S CONTROL; 25 (C) ANY REMEDIAL ACTIONS TAKEN BY THE INSURER, ORGANIZATION OR CORPO- 26 RATION TO PREVENT FUTURE VIOLATIONS; 27 (D) THE ACTUAL OR POTENTIAL HARM TO OTHERS RESULTING FROM THE 28 VIOLATIONS; 29 (E) IF THE INSURER, ORGANIZATION OR CORPORATION KNOWINGLY AND WILLING- 30 LY COMMITTED THE VIOLATIONS; 31 (F) THE INSURER, ORGANIZATION OR CORPORATION'S FINANCIAL CONDITION; 32 AND 33 (G) ANY OTHER FACTORS THE SUPERINTENDENT CONSIDERS APPROPRIATE. 34 S 5. This act shall take effect immediately.