Regulates the scope, manner and performance of review of claims by utilization review agents

1 Co-sponsor

• William J. Larkin Jr.

BILL NUMBER:S5256

Title of bill

An act to amend the public health law and the insurance law, in relation to approvals by a utilization review agent

Purpose

This bill amends the public health and insurance laws related to utilization review and external appeals.

Summary of provisions

Section 1 amends of § 4903 of the public health law to ensure that the failure of a utilization review agent to make a determination shall be deemed an approved claim.

Section 2 adds a new paragraph (b) of Subdivision 5 of § 4905 of the public health law to require that utilization review agents substantiate pre-authorizations in writing, which may be electronic.

Sections 3 amends § 4914 of the public health law to extend the external appeal provider timeframe from 45 days to 4 months in order to conform with recent changes to related patient timeframes.

Sections 4, 5 and 6 make the same changes as Sections 1, 2 and 3 of the bill in the insurance law.

Section 7 - Provides for an effective date of 7/1/14.

Justification

This bill is intended to address certain health plan practices that result in unfair and unilateral reductions of payments and claims denials. This bill strikes a balance, as it preserves all health plan rights to review medical necessity, utilization of services, and claims payment processing but in a manner that provides fairness to providers and a remedy when certain utilization reviews are misapplied by health plans.

New York State law establishes timeframes for utilization review agents to decide whether to pay a claim. If the deadline is missed, the claim is considered to have received an adverse determination, i.e., payment is denied. At that point, the burden is on the provider who must expend time and additional resources appealing the plan's silence. Sections 1 and 4 of this bill specify that plan silence, in response to a submitted claim, is an approved claim rather than a denied claim.

Sections 2 and 5 of the bill require utilization review agents to substantiate pre-authorizations in writing. Chapter 451 of 2007 required a managed care organization to pay for care that it pre-authorized (with limited exceptions). However, there is no requirement that pre-authorizations be provided in writing. In many cases, providers receive the pre-authorization verbally. This section requires verbal pre-authorizations to be confirmed in writing by email, fax or posting on a website to avoid confusion and extra administrative follow-up.

Sections 3 and 6 of the bill conform and harmonize the timeframes for providers and patients/patients' designees to submit external appeals. Legislation was enacted in 2011 that codified New York's external appeal law with the standards in the Patient Protection and Affordable Care Act. The timeframe for patients or patients' designees to submit an appeal to the Department of Financial Services was extended from 45 days to four months. Providers' timeframe for an external appeal remains at 45 days and this legislation provides conforming time frames for patients and providers.

Legislative history

New bill.

Fiscal implications

None.

Effective date

This act shall take effect on July 1, 2014.