Requires health plans with coverage of out of plan medical services to provide certain information to insureds, subscribers and enrollees

Summary of provisions

Section 1 of the bill amends section 3217-a of the Insurance Law to require all health insurance contracts;managed care health insurance contracts; or any other health insurance contract or product for which the superintendent deems appropriate to disclose to its subscribers and enrollees a description of its methodology for reimbursing health care treatment by physicians not participating in the plan's network, which shall be expressed as a percentage of the usual cost of care provided by physicians not participating in the health plan's network of providers (as determined by a non-profit benchmarking database known as FAIR Health). Moreover, this section would also require a health insurance company to disclose to their enrollees upon request the anticipated out of pocket costs for specific health care services received on an out of network basis, which shall be based upon the difference between the estimated actual cost of the service (as determined by FAIR Health) and the health insurance company's out of network reimbursement methodology.

Section 2 of the bill empowers the superintendent of Insurance to disapprove issuance of a health insurance policy offering coverage for out of network care that will not provide significant coverage of the usual costs of receiving care out of the plan's network.

Sections 3 and 4 of the bill makes corresponding changes in relation to the disclosure obligation to Section 4324 of the Insurance Law and Section 4408 of the Public Health Law.

Justification

Some consumers and employers choose to have health insurance policies that permit them to receive care from a non-participating physician because it permits them to see the health care provider of their choice. However, this system has been fraught with problems. As a condition of settlements with the Attorney General in 2009, several health insurance companies agreed to discontinue the use of the flawed database for determining payments when patients receive care outside of a plan's network of physicians. Money was contributed toward creating a new database to be maintained by a new unaffiliated

non-profit organization, called FAIR Health, Inc. The purpose of the database is to assure that patients, employers and health insurers have accurate information concerning the true cost of out-of-network medical services. The new database is now operational for reporting medical charge data. This development was applauded by the consumer and provider community.

In the meantime, however, a number of insurers have changed their methodology for covering out-of-network care to methodologies that appear at first blush to cover costs adequately, but, in fact, often result in severely inadequate coverage for patients. It is the intention of this legislation to ensure that the new database developed as a result of the Attorney General's 2009 investigation and report is utilized as intended.

This legislation empowers the Superintendent of Insurance to disapprove issuance of a health insurance policy offering coverage for out of network care that will not provide significant coverage of the usual costs of receiving care out of the plan's network. It would also better assure that health insurance companies are informing their enrollees how their coverage policies for out of network care compare to the actual cost of services. Finally, It would better protect employers and patients from purchasing policies that purport to, but in fact fail to, provide adequate coverage for out of network care.

Legislative history

New bill.

Fiscal implications

None to the state.

Effective date

This act shall take effect 60 days after enactment and apply to all policies and contracts issued, renewed, modified, altered or amended on or after such date.