What's happening
Writing a plain-English summary… Track this bill to get it by email.
Why it matters
Albany, before your first meeting.
Every bill that moved yesterday, summarized in a sentence and ranked by impact. The Albany Scorecard follows on Sundays.
Free. Unsubscribe in one click. Want alerts on specific bills? Create an account.
Who cares
Headline styles
Sponsors
History
- Referred to insurance
- Referred to insurance
Full text
The text isn't available here yet. Check nysenate.gov.
Sponsor's memo
Title of bill
An act to amend the insurance law, the public health law and the social services law, in relation to prompt payment of health care claims, dispute resolution relating to conflicts between a third party payor and a health care provider; and to amend the insurance law and the state finance law, in relation to creating the health insurance guaranty fund
Purpose
To promote prompt and fair resolution of health care claims; establish a system for the resolution of claims disputes; add needed certainty to the utilization review process; establish a fund for the payment of claims and medical payments to consumers and health care providers in the event of the insolvency of a health plan not covered by existing security funds; ensure the timely and fair reimbursement of pre-emergency ambulance services; conform New York State's continuation law to the federal Health Insurance Portability and Accountability Act.
Summary of provisions
Section one amends section 2601 of the Insurance Law (IL) to: 1) clarify that Article 43 insurers and HMOs are subject to the unfair Claims Settlement Practices Act; 2) add four criteria for the superintendent to evaluate when considering a health plan's claims practices; and 3) establish an interim payment system for health plans which violate payment standards as a general business practice.
Read the full memo (1,609 words)
Section two amends section 3224-a of the IL to: 1) accelerate the time periods for payment of undisputed claims; 2) require additional disclosure by health plans when claims are denied; 3) set minimum time frames, unless otherwise agreed to by plans and providers in contracts, for the submission of claims and minimum time frames for the submission of claims by consumers; 4) set guidelines for appeals of denied claims; 5) prohibit health plans from seeking to recover, or to deduct from payments to providers, amounts paid in error more than one year after the date the original payment was made; 6) increase penalties generally for noncompliance, but exempt health plans which claims are paid within 60 days with interest, and unpaid claims do not exceed 5% of the accounts receivable owed to anyone provider over a given period; and 7) establishes circumstances under which the superintendent must investigate health plans' payment practices.
Section three amends section 206 of the Public Health Law (HL) to require the Commissioner, in consultation with the Superintendent, to establish a system for the resolution of disputed claims in excess of $500 between health plans and providers. Losers of proceedings would be required to bear the costs, and providers would be prohibited from billing consumers when proceedings are still pending.
Section four amends section 2805-a of the PHL to require general hospitals to submit quarterly reports on their billing practices to the DO.
Section five amends section 2807-e of the HL to set standards for the electronic submission of claims.
Section six amends section 364-j of the Social Services Law to set time frames for Medicaid Managed Care premium payments.
Sections seven through ten amend the IL and HL to clarify standards for the utilization review of a health care service or procedure that is part of a larger course of treatment rendered.
Sections 11 and 12 amend the HL and IL to define "retrospective adverse determination."
Sections 13 and 14 amend the HL and the IL to require health plans and utilization review agents to notify health care providers and enrollees 20 business days in advance of changes in policies or procedures.
Sections 15 and 16 authorize consumers and providers to obtain health plans' utilization review criteria.
Sections 17 and 18 amend the HL and the IL to prohibit health plans from implementing notice requirements of fewer than five days following receipt of emergency services and from denying reimbursement for grounds other than medical necessity.
Section 19 amends the HL to prohibit health plans and OUR agents from requiring preauthorization requests for health care services more than seven business days in advance of the proposed date of such services.
Section 20 amends the HL to eliminate an exemption for HMOs and nonprofit insurers from standards relating to requests for medical records during reviews of the appropriateness of medical services.
Section 21 amends the PHL to establish standards for payment of preauthorized medical services.
Section 22 amends the PHL to enhance the enforcement powers of the Commissioner in actions related to the state's utilization review law.
Section 23 amends the IL to prevent health plans from requiring preauthorization requests for health care services more than seven business days in advance of the proposed date of such services.
Section 24 amends the IL to set standards for payment of preauthorized health services.
Section 25 enhances the enforcement powers of the Superintendent in regard to violations of the state's utilization review standards.
Section 26 adds consistent violations of section 3224-a of the IL as standard for the Superintendent to evaluate in the potential rehabilitation or liquidation of a health plan.
Sections 27 through 31 amend the IL, and the State Finance Law to create the Health Insurance Guaranty Fund to pay claims to consumers and health care providers in the event of an insolvency of an HMO, Article 43 nonprofit health insurance plan, or any other health plan not covered by existing guaranty funds.
Section 32 sets out the effective date.
Justification
Despite the enactment of a prompt payment law in 1997, health care providers continue to suffer from shoddy payment practices by certain health plans. Sections one through six make a variety of changes to strengthen the current law in a balanced fashion. Plans which consistently violate the law would be required to make advance payments to health plans, but health plans which pay claims promptly, the vast majority of the time would be exempt from costly fines for isolated violations. Payment time frames are accelerated for health care providers who submit claims electronically and hospitals would be required to report to the Health Department so that their billing practices may be scrutinized. New powers provided in the bill will allow the superintendent to enforce the law and also investigate other practices of health plans, such as excessive requests for medical records or unreasonable rates of denials. Finally, the creation of an independent dispute resolution system will promote the fair and timely resolution of claims differences.
Sections five and six are designed to promote broader compliance with electronic transmission and remittance, which all agree is a more cost-effective and efficient means of processing claims.
Sections seven through twenty-four amend New York State's landmark 1996 Utilization Review Law to address or clarify a number of fine points, which have become issues between health plans and providers. Common sense standards for payment of preauthorized procedures and emergency room care, prior notification of changes in utilization review standards and access to UR clinical guidelines, for example, are standards with which all health plans can live and will go a long way towards removing the bottlenecks created under current utilization review procedures.
Section 25 enhances the superintendent's authority to enforce the law.
Sections 27 through 31 create a Health Insurance Security Fund. Establishing such a fund will help protect the health care system from instability in the health insurance marketplace. With many health care practitioners facing an ever increasing amount of payments due from HMOs arid other health insurers, these practitioners are increasingly vulnerable to the financial failure of an HMO or other health insurer. The recent insolvencies of HIP-New Jersey and Harvard Pilgrim demonstrated the impact such a default can have on the health care system, as health care practitioners were left with over millions in unpaid claims. Rating agencies continue to sound wamings about health plans. Two plans, Kaiser Permanente and Partners Health Plan, closed down In New York State last year. In addition, the Hudson Valley based HMO Wellcare, defaulted on millions of dollars of provider payments last year before securing a cash infusion from outside investors. New York State long ago recognized the need to protect policyholders, consumers and certain health care providers in the event an insurer becomes insolvent. The Life Insurance Guarantee Fund, for example, ensures that benefits are paid to life insurance policyholders and annuitants, as well as accident and health insurance policyholders and health care providers, in certain circumstances. The Property and Casualty Security Fund is in place to ensure that auto insurance policyholders, injured workers and the health care providers that treat these patients are made whole in the event of an insolvency. New York State should provide the same protections for the health care providers who contract with HMOs and health insurers, and the enrollees of such plans. While existing law prevents health care providers from billing consumers in the event of health plan insolvency, this protection only applies if the provider had a contract with the insolvent health plan, leaving consumers enrolled in indemnity plan, PPOs and POS plans vulnerable. And no protection is afforded to hospitals, clinics, physicians, home care providers and other segments of our medical community who rendered necessary services with the expectation of being reimbursed. The creation of a fund for these situations is appropriate and long overdue, and nearly 20 other states provide these protections.
Legislative history
2007/2008 - S.726A Remained in the Senate Committee on Insurance 2005/2006 - S.1382 Remained in the Senate Committee on Insurance
2003/2004 - S.5744-A Remained in Senate Insurance Committee/A.6844-A Passed Assembly
Fiscal implications
None.
Effective date
Immediately, except that sections one through twelve and sections 17 through 31 take effect January 1, 2010; and sections 13, 14, 15 and 16 shall take effect 60 days after this act shall have become a law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.