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

BILL NUMBER:A315

Title of bill

An act to amend the insurance law, in relation to prompt settlement of claims for health care and payments for health care services

Purpose

To ensure that health care providers receive timely payment for services and support the delivery of health care services to the public.

Summary of provisions

Amends Section 3224-a, subsections (a), (b), and (c) of the insurance law to (a) require that insurers make payments to health care providers within 30 days of receipt of a bill or claim for services rendered; (b) require insurers to pay undisputed portions of a bill or claim within 15 calendar days of receiving the claim, accommodate electric submission and tracking of claims information, and inform the provider that a claim has been denied within 15 calendar days of issuing the denial; and (c) specifies the penalties for violating this section of law.

Amends Section 3224-a of the insurance law by adding a section (g) to allow policyholders or health care providers to commence legal action against an insurer for failure to comply with the provisions of this law. Adds a section (h) to Section 3224-a to provide that, every six months, insurers must prepare a list of claims for which they will always request operative notes and/or documentation of medical necessity and make that list available to participating providers; insurers must also accommodate electronic submission and tracking of those operative notes and/or documentation of medical necessity.

Justification

The Prompt Pay Law was intended to ensure that health care providers receive timely payment for services, but many providers claim that this statute has not been effective.

First, the Superintendent of Insurance is unable to compel an insurance company to pay a claim, and is only able to levy fines. Health care providers are prohibited from a private right of action, so there is no mechanism to compel insurance companies to pay legitimate claims.

Second, there is no streamlined claims process in place. Insurance companies do not inform health care providers when employers are self- insured and therefore not covered under the Prompt Pay Law. These providers spend time and effort filing complaints over which the Depart- ment of Insurance has no jurisdiction. Furthermore, the process for handling additional claim information is not streamlined, and paperwork is often lost and must be resubmitted. This process only exacerbates a difficult financial condition for many health care providers.

Third, although the Prompt Pay Law requires that only one request is made for all required information about a claim, insurance companies

ignore this requirement and issue multiple requests for additional information. This only delays the claims process further.

This bill would give greater enforcement power to the Prompt Pay Law and would thereby ensure the reliable delivery of health care services.

Legislative history

A4324 of 2007-2008

Fiscal implications

To be determined.

Effective date

This act shall take effect on the one hundred eightieth day after it shall have become law provided, however, that effective immediately, the addition, amendment and/or repeal of any rule or regulation necessary for the implementation of this act on its effective date are authorized and directed to be made and completed on or before such effective date.