Facilitates payment of claims by health insurers to municipalities for early intervention services

Summary of specific provisions

Section one amends Section 3235-a of the insurance law, as added by section 3 of part C of chapter 1 of the laws of 2002, to prohibit accident and health insurance policies from excluding from coverage services provided under title two-A of article twenty-five of the public health law. Section one amends paragraph (c) of section 3235-a to require that the insurer provide a municipality with information on the extent of benefits available to an insured under the policy upon the insurer's receipt of written notice from the municipality as to its subrogation rights. The section also amends paragraph (d) of Section 3235-a to provide that the individualized family services plan, upon certification by the early intervention official, be deemed to meet any precertification, preauthorization and medical necessity requirements imposed on benefits under the policy. Further, section one adds: paragraph (e) to prohibit insurers from denying claims based on the location where services are provided. the duration of the child's condition or that the child's condition is not likely to improve within a time specified in the policy, the absence of a referral by a primary care provider, or that the provider is a non-participating or non-network provider; subsection (f) to provide that the time of loss for the purposes of filing claims shall be the date of payment to the contractor by the municipality; and subsection (g) to require the insurer to issue payment in the amount of the approved costs for early intervention services.

Section two adds two new subparagraphs to section 2559 of the public health law.

Section three provides the effective date.

Justification

Despite Article 25 of the federal Individuals with Disabilities Education Act (IDEA) which mandates public and private commercial insurance to be maximized in financing early intervention (EI) services, reimbursement from third party payers, other than Medicaid, have been minimal leaving the cost of this entitlement to be paid by state and municipal tax dollars.

In recognition of the need to improve recoupment of insurance monies to help pay for EI, the Third Party Reimbursement Task Force of the New York State Early Invention coordinating council was convened in 1999.

That Task Force examined data on billing and recoupment in 1997 and found that private insurance collection was at a low rate of 9%. An updated survey conducted by the New York State Association of County Health Officials of billing and recoupment in 2000 found that, while the amount billed to insurers had almost doubled, the recoupment rate remained a low 11%.

The Task Force also consulted with experts from Massachusetts, Indiana and Virginia, all states that have included in state law the specific requirements necessary to ensure insurance payments for EI. Experts from these three states indicated that requiring insurers to pay for El services minimally impacted insurance premiums and that insurers may in fact have saved money in the long run due to the therapeutic interventions under EI. Experts from the three states confirmed the Task Force's finding that the single most important factor to improve collections as well as reducing administrative burdens was legislation requiring private commercial insurers to pay for EI.

Current insurance law does not include the necessary language to insure that payments are made nor does the language preclude the majority of reasons given for ET denials. As a result, it is necessary that specific language be adopted to fix this problem.

Prior legislative history

A.3719, 2009 and 2010 referred to insurance. A.4399, 2007 and 2008 referred to insurance, A.1014-A, 2005 and 2006 referred to insurance. Same as S.4365-A, 2005 and 2006 referred to insurance. A.6760-A, 2003 and 2004 referred to insurance. Same as S.2410-A 2003 and 2004 referred to insurance. A.11436, 2002 referred to insurance.

New Bill in the Senate

Fiscal implications

None to the state, savings for municipalities.

Effective date

This act shall take effect immediately.