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History
- Referred to insurance
- Referred to insurance
Full text
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Sponsor's memo
BILL NUMBER:S257
Title of bill
An act to amend the insurance law, in relation to imposing certain limits, requirements and prohibitions regarding the seeking of refunds by certain insurers, organizations or corporations from health care providers
Purpose
To protect physicians and other health care providers from HMOs and insurers seeking refunds from them many months or years after payment is made to such provider for care rendered.
Summary of provisions
Amends section 3224-a of the insurance law by adding a new subsection (b-l). This new section would require that insurers have no more than 180 days to file for a refund in the case of a fraudulent claim, with written notice explaining the reason for the refund. Furthermore, this new section requires insurers seeking refunds to provide the health care provider with written notice that explains in detail the reasons for the refund and provides the provider with opportunity to challenge the refund results. Written notice shall be made in not less than thirty days prior to the seeking of a refund or the making of adjustments.
Justification
Currently, New York State's Prompt Payment Law requires HMOs and other insurers to pay undisputed physician and other provider claims within 45 days after they are received by such HMO or insurer. However, one manner by which HMOs and insurers have frequently attempted to skirt this requirement has been to make payment on the claim to the provider within the 45 day time limit, but then seek a refund of such payment, claiming it was an overpayment or an improper payment. These attempted refunds are sought months and, at times, years after payment is made to the physician or other provider. These refund requests can be for thousands of dollars, and can present an enormous financial hardship for individual physicians, particularly small and sole physician practices. Currently, there is virtually no limitation in law to these refund requests, except for the six-year statute of limitations applicable to all contracts in New York State. Certainly, should an insurer suspect that the claim was submitted fraudulently, such insurer should have an opportunity to seek redress and a refund. However, these refund requests go well beyond reviewing previously paid claims for detecting fraud, and are being used to essentially permit health plans to avoid compliance with the Prompt Payment Law. This legislation would address this problem and strike an appropriate balance between permitting insurers to ensure proper review of claims, while at the same time giving physicians and other providers the security of knowing that they will not have to be coerced to pay potentially tens of thousands of dollars in inappropriate refund requests so that the insurer can evade the prompt payment law.
Legislative history
S.1399 of 2009/2010; Referred to Senate Insurance Committee.
S.109/A.6058 of 2007/2007; Referred to Senate Insurance Committee. S.1987/A.3106 of 2005/2006; Referred to Senate Insurance Committee. S.3015A/A/8941A of 2003/2004; Referred to Senate Insurance Committee.
Fiscal implications
None.
Effective date
Immediately and shall not apply to any agreement executed on or before such date.
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