Relates to the rights of health care providers under managed care contracts

Summary of specific provisions

Section (1): Subsection (a) of Section 3224-a of the insurance law is amended to require health insurance providers to make payments for claims submitted by medical providers, with no reasonable suspicion of fraudulent billing, within thirty days of receipt of paper claims, and within fifteen days of receipt of elec- tronic claims.

Section (2): Section 3224-b of the insurance law is amended to include an explicit provision that requires agreements between Health Plans and physicians for the delivery of medical services to conform to this section's rules with respect to the rights of physicians under managed care contracts. The section goes on to outline the regulations of these arrangements. It mandates that all contracts and contract amendments must be signed by both parties, and fee schedules particularized to the physician's specialty must be included. Moreover, insurers may only terminate the contract before the agreed-upon date on a for-cause basis, and any change in policy or procedure that has an adverse effect on the level of compensation to physicians for rendered services can only be effectuated through a contract amendment. Also, insurers shall indemnify physicians for any damages for medical liability resulting from the physician's compliance with the payer's utilization review decisions.

Section two also declares that where abusive billing is alleged by the insurance provider in dispute of a claim submitted by the physician, a substantial review of all medical records pertaining to the claim, coupled with a review by an independent dispute resolution board. Furthermore, physicians may offset such insurer overpayment claims with instances of documented underpayment during the period in question. The Superintendent of Insurance is also authorized to conduct a review, and render judgment, in disputed billing cases.

Section (3) provides for the effective date.

Justification

Existing law forbids physicians from collectively negoti- ating contracts with health insurers for provision of medical services to patients. Because health insurers control large numbers of people in the marketplace they are able to dictate contract terms to physicians to the potential detriment of both physicians and their patients. Because

of the ability of insurers to deprive physicians access to large numbers of patients, insurers take advantage of their market control and physi- cians find themselves forced to sign adhesion agreements that are in practice non-negotiable.

By adopting a set of minimum fair business practice rules that all managed care contracts with physicians must meet, it assures that doctors and insurers will be on a level playing field; and, it will also apply to all insurers equally so that no individual company has any more competitive advantage over any other health insurer by conforming to these rules.

Prior legislative history

2006: A. 10897 Referred to Insurance; 2007- 08: A7591A/S3804A Referred to Insurance; 2009 A. 3341 Referred to Insur- ance

Fiscal implications

The State may realize some revenue through the payment of fees to operate a dispute resolution review board.

Effective date

The act shall take effect immediately and shall apply to all contracts entered into, renewed (automatically or otherwise), modi- fied or amended on or after such date.