Relates to payments from the New York state medical indemnity fund

1. A request for review of a claim denial or for prior authorization for payment or reimbursement from the medical indemnity fund for a qualifying health care cost must be made by the claimant no later than sixty days from receipt of the denial, at the claimant's option, by either (a) making application to the court where the judgment was awarded or the case was settled, or (b) following the administrative process established by regulations of the commissioner to review claim denials.

2. A request for review of a determination by the fund administrator that the relevant provisions of public health law section 2999-j(6) have not been met and/or that the plaintiff or claimant is not a qualified plaintiff may be made by any of the parties, no later than sixty days from receipt of the denial, by making application to the court wherein the judgment was awarded or the case was settled.

Section 2 amends Public Health Law § 2999-j(2) and (4) to prohibit the Fund from prohibiting reimbursement of qualifying health care costs solely on the basis that the cost is therapeutic in nature or that it may benefit other members of the household. This section further provides that qualifying health care costs to be paid from the medical indemnity fund shall be reimbursed at the usual and customary cost, which shall mean the 80th percentile of all charges for a particular health care service performed by a provider in the same or similar specialty and provided in the same geographical areas as reported in a benchmarking database maintained by a non-profit entity designated by the Superintendent of Financial Services. If no such rate is available, reimbursed shall be calculated on the basis of no less than 130% of Medicaid or Medicare, whichever is more. If no Medicaid or Medicare rate exists, the Commissioner shall provide for reimbursement rates by regulation.

Section 3 makes technical amendments to Public Health Law 2999-h (1).

Section 4 establishes a Consumer and Stakeholder workgroup with members appointed by the Governor, Senate and Assembly. The workgroup must be consulted prior to the promulgation of any rules or regulations.

Section 5 provides that the act take effect 45 days after it becomes law.

Justification

The New York State Medical Indemnity Fund ("Fund") was a Medicaid Redesign Team Initiative enacted in 2011 to provide a funding source for future health care costs associated with birth-related neurological injuries in order to reduce medical malpractice premium costs. Enrollees in the Fund are plaintiffs in medical malpractice actions who have received either court-approved settlements or judgments deeming the plaintiffs' neurological impairments to be birth-related. Participation in the Fund is mandatory.

The Fund has been in operation for more than four years, and the experiences of the parents of children who are required to rely on the Fund in lieu of direct compensation for their medical and health care expenses have exposed issues with the administration of the Fund.

Under the current law and Commissioner's regulations payment rates for medical and health care services covered by the Fund have been limited. While services provided by private physicians are reimbursed at a rate of 80% of the usual and customary cost as determined by FAIR Health, Inc. (a not-for-profit corporation established to provide an independent database of information of health care costs), all other services are reimbursed at Medicaid rates. Children in the Fund may already be eligible for Medicaid, in which case this reimbursement benchmark provides no benefit. At this rate, families struggle to find providers and often have to pay for care out of pocket. Many children are unable to access the quality of care they need and their families expected they would receive in exchange for relinquishing their right to a medical malpractice judgment award or settlement. This legislation remedies that by increasing the reimbursement rates for health care costs from the fund. It is also important to note that the Fund is well funded. Recent budgets appropriate over $50 million for this purpose, and each year this amount is largely unspent.

Current regulations allow for administrative appeals before a Department of Health Administrative Law Judge. The administrative law judge's decision is final and may only be appealed by bringing an Article 78 proceeding-a proceeding that is both costly and lengthy. Many feel that the current regulations do not provide an impartial appeal. This legislation will remedy this by providing families the option of appealing through the current process or returning to the court that judgment or settlement was entered.

In addition, the legislation provides that a denial of enrollment in the Fund may also be reviewed by making application where the judgment was awarded or the case was settled. Under the current law the only avenue to appeal a denial of enrollment was by bringing an Article 78 proceeding. By allowing the parties to bring an action in the court where the case was settled or the judgment was awarded will save time and money as this is a court already familiar with the proceedings. Section 3 of this bill also makes technical amendments regarding eligibility for the Fund to address issues raised in Matter of K.O. v. Lawsky, 50 Misc.3d 742, in which the Fund found the plaintiff not qualified despite a Judge's finding to the contrary, based on the fact that the infant was not admitted at the time of the injury. While the Court found that the Fund acted arbitrarily in denying enrollment, these changes would clarify the intent of this provision.

The Department has recently proposed regulations that would prohibit approval of qualifying health care costs that are therapeutic in nature or that, while they benefit the neurologically injured child, may also provide an ancillary benefit to other members of the household. This legislation would expressly prohibit these limitations and would also establish a workgroup of parents and stakeholders that shall be consulted prior to the promulgation of any regulations.

The children and the families of children who have sustained birth-related neurological injuries due to malpractice deserve to have their future health care costs and services they need paid for by the Fund they are required to participate in. When enacted, it was not anticipated that families would face hurdles or prohibitions on health care costs that are found to be necessary by a treating physician. The provisions of this bill will work to remedy current flaw in the Fund and ensure it functions as originally intended.

Legislative history

New bill.

Fiscal implications

None.

Effective date

45 days after enactment.