§ 3224-A — Standards for prompt, fair and equitable settlement of claims for health care and payments for health care services

§ 3224-a. Standards for prompt, fair and equitable settlement of\nclaims for health care and payments for health care services. In the\nprocessing of all health care claims submitted under contracts or\nagreements issued or entered into pursuant to this article and articles\nforty-two, forty-three and forty-seven of this chapter and article\nforty-four of the public health law and all bills for health care\nservices rendered by health care providers pursuant to such contracts or\nagreements, any insurer or organization or corporation licensed or\ncertified pursuant to article forty-three or forty-seven of this chapter\nor article forty-four of the public health law shall adhere to the\nfollowing standards:\n (a) Except in a case where the obligation of an insurer or an\norganization or corporation licensed or certified pursuant to article\nforty-three or forty-seven of this chapter or article forty-four of the\npublic health law to pay a claim submitted by a policyholder or person\ncovered under such policy ("covered person") or make a payment to a\nhealth care provider is not reasonably clear, or when there is a\nreasonable basis supported by specific information available for review\nby the superintendent that such claim or bill for health care services\nrendered was submitted fraudulently, such insurer or organization or\ncorporation shall pay the claim to a policyholder or covered person or\nmake a payment to a health care provider within thirty days of receipt\nof a claim or bill for services rendered that is transmitted via the\ninternet or electronic mail, or forty-five days of receipt of a claim or\nbill for services rendered that is submitted by other means, such as\npaper or facsimile.\n (b) In a case where the obligation of an insurer or an organization or\ncorporation licensed or certified pursuant to article forty-three or\nforty-seven of this chapter or article forty-four of the public health\nlaw to pay a claim or make a payment for health care services rendered\nis not reasonably clear due to a good faith dispute regarding the\neligibility of a person for coverage, the liability of another insurer\nor corporation or organization for all or part of the claim, the amount\nof the claim, the benefits covered under a contract or agreement, or the\nmanner in which services were accessed or provided, an insurer or\norganization or corporation shall pay any undisputed portion of the\nclaim in accordance with this subsection and notify the policyholder,\ncovered person or health care provider in writing, and through the\ninternet or other electronic means for claims submitted in that manner,\nwithin thirty calendar days of the receipt of the claim:\n (1) whether the claim or bill has been denied or partially approved;\n (2) which claim or medical payment that it is not obligated to pay\nstating the specific reasons why it is not liable; and\n (3) to request all additional information needed to determine\nliability to pay the claim or make the health care payment; and\n (4) of the specific type of plan or product the policyholder or\ncovered person is enrolled in; provided that nothing in this section\nshall authorize discrimination based on the source of payment.\n Upon receipt of the information requested in paragraph three of this\nsubsection or an appeal of a claim or bill for health care services\ndenied pursuant to this subsection, an insurer or organization or\ncorporation licensed or certified pursuant to article forty-three or\nforty-seven of this chapter or article forty-four of the public health\nlaw shall comply with subsection (a) of this section; provided, that if\nthe insurer or organization or corporation licensed or certified\npursuant to article forty-three or forty-seven of this chapter or\narticle forty-four of the public health law determines that payment or\nadditional payment is due on the claim, such payment shall be made to\nthe policyholder or covered person or health care provider within\nfifteen days of the determination. Any denial or partial approval of\nclaim or payment and the specific reasons for such denial or partial\napproval pursuant to this subsection shall be prominently displayed on a\nwritten notice with at least twelve-point type. A partial approval of\nclaim or payment shall state at the top of such written notice with at\nleast fourteen-point type bold: "NOTICE OF PARTIAL APPROVAL OF MEDICAL\nCOVERAGE". A denial of claim or payment shall state at the top of such\nwritten notice with at least fourteen-point type bold: "NOTICE OF DENIAL\nOF MEDICAL COVERAGE". Any additional terms or conditions included on\nsuch notice of partial approval or such notice of denial, such as but\nnot limited to time restraints to file an appeal, shall be included with\nat least twelve-point type.\n (c) (1) Except as provided in paragraph two of this subsection, each\nclaim or bill for health care services processed in violation of this\nsection shall constitute a separate violation. In addition to the\npenalties provided in this chapter, any insurer or organization or\ncorporation that fails to adhere to the standards contained in this\nsection shall be obligated to pay to the health care provider or person\nsubmitting the claim, in full settlement of the claim or bill for health\ncare services, the amount of the claim or health care payment plus\ninterest on the amount of such claim or health care payment of the\ngreater of the rate equal to the rate set by the commissioner of\ntaxation and finance for corporate taxes pursuant to paragraph one of\nsubsection (e) of section one thousand ninety-six of the tax law or\ntwelve percent per annum, to be computed from the date the claim or\nhealth care payment was required to be made. When the amount of interest\ndue on such a claim is less then two dollars, and insurer or\norganization or corporation shall not be required to pay interest on\nsuch claim.\n (2) Where a violation of this section is determined by the\nsuperintendent as a result of the superintendent's own investigation,\nexamination, audit or inquiry, an insurer or organization or corporation\nlicensed or certified pursuant to article forty-three or forty-seven of\nthis chapter or article forty-four of the public health law shall not be\nsubject to a civil penalty prescribed in paragraph one of this\nsubsection, if the superintendent determines that the insurer or\norganization or corporation has otherwise processed at least\nninety-eight percent of the claims submitted in a calendar year in\ncompliance with this section; provided, however, nothing in this\nparagraph shall limit, preclude or exempt an insurer or organization or\ncorporation from payment of a claim and payment of interest pursuant to\nthis section. This paragraph shall not apply to violations of this\nsection determined by the superintendent resulting from individual\ncomplaints submitted to the superintendent by health care providers or\npolicyholders.\n (d) For the purposes of this section:\n (1) "policyholder" shall mean a person covered under such policy or a\nrepresentative designated by such person;\n (2) "health care provider" shall mean an entity licensed or certified\npursuant to article twenty-eight, thirty-six or forty of the public\nhealth law, a facility licensed pursuant to article nineteen or\nthirty-one of the mental hygiene law, a fiscal intermediary operating\nunder section three hundred sixty-five of the social services law, a\nhealth care professional licensed, registered or certified pursuant to\ntitle eight of the education law, a dispenser or provider of\npharmaceutical products, services or durable medical equipment, or a\nrepresentative designated by such entity or person;\n (3) "plan or product" shall mean:\n (i) Medicaid coverage provided pursuant to section three hundred\nsixty-four-j of the social services law;\n (ii) a child health insurance plan certified pursuant to section\ntwenty-five hundred eleven of the public health law;\n (iii) basic health program coverage certified pursuant to section\nthree hundred sixty-nine-gg of the social services law, including the\nspecific rating group the policyholder or covered person is enrolled in;\n (iv) coverage purchased on the New York insurance exchange established\npursuant to section two hundred sixty-eight-b of the public health law;\nand\n (v) any other comprehensive health insurance coverage subject to\narticle thirty-two, forty-three, or forty-seven of this chapter, or\narticle forty-four of the public health law; and\n (4) "emergency services" shall have the meaning set forth in\nsubparagraph (D) of paragraph nine of subsection (i) of section three\nthousand two hundred sixteen of this article, subparagraph (D) of\nparagraph four of subsection (k) of section three thousand two hundred\ntwenty-one of this article and subparagraph (D) of paragraph two of\nsubsection (a) of section four thousand three hundred three of this\nchapter.\n (e) Nothing in this section shall in any way be deemed to impair any\nright available to the state to adjust the timing of its payments for\nmedical assistance pursuant to title eleven of article five of the\nsocial services law, or for child health insurance plan benefits\npursuant to title one-a of article twenty-five of the public health law\nor otherwise be deemed to require adjustment of payments by the state\nfor such medical assistance or child health insurance.\n (f) In any action brought by the superintendent pursuant to this\nsection or article twenty-four of this chapter relating to this section\nregarding payments for medical assistance pursuant to title eleven of\narticle five of the social services law, child health insurance plan\nbenefits pursuant to title one-a of article twenty-five of the public\nhealth law, benefits under the voucher insurance program pursuant to\nsection one thousand one hundred twenty-one of this chapter, and\nbenefits under the New York state small business health insurance\npartnership program pursuant to article nine-A of the public health law,\nit shall be a mitigating factor that the insurer, corporation or\norganization is owed any premium amounts, premium adjustments, stop-loss\nrecoveries or other payments from the state or one of its fiscal\nintermediaries under any such program.\n (g) Time period for submission of claims. (1) Except as otherwise\nprovided by law, health care claims must be initially submitted by\nhealth care providers within one hundred twenty days after the date of\nservice to be valid and enforceable against an insurer or organization\nor corporation licensed or certified pursuant to article forty-three or\narticle forty-seven of this chapter or article forty-four of the public\nhealth law. Provided, however, that nothing in this subsection shall\npreclude the parties from agreeing to a time period or other terms which\nare more favorable to the health care provider. Provided further that,\nin connection with contracts between organizations or corporations\nlicensed or certified pursuant to article forty-three of this chapter or\narticle forty-four of the public health law and health care providers\nfor the provision of services pursuant to section three hundred\nsixty-four-j or three hundred sixty-nine-ee of the social services law\nor title I-A of article twenty-five of the public health law, nothing\nherein shall be deemed: (i) to preclude the parties from agreeing to a\ndifferent time period but in no event less than ninety days; or (ii) to\nsupersede contract provisions in existence at the time this subsection\ntakes effect except to the extent that such contracts impose a time\nperiod of less than ninety days.\n (2) This subsection shall not abrogate any right or reduce or limit\nany additional time period for claim submission provided by law or\nregulation specifically applicable to coordination of benefits in effect\nprior to the effective date of this subsection.\n (h) (1) An insurer or organization or corporation licensed or\ncertified pursuant to article forty-three or article forty-seven of this\nchapter or article forty-four of the public health law shall permit a\nparticipating health care provider to request reconsideration of a claim\nthat is denied exclusively because it was untimely submitted pursuant to\nsubsection (g) of this section. The insurer or organization or\ncorporation shall pay such claim pursuant to the provisions of paragraph\ntwo of this subsection if the health care provider can demonstrate both\nthat: (i) the health care provider's non-compliance was a result of an\nunusual occurrence; and (ii) the health care provider has a pattern or\npractice of timely submitting claims in compliance with subdivision (g)\nof this section.\n (2) An insurer or organization or corporation licensed or certified\npursuant to article forty-three or article forty-seven of this chapter\nor article forty-four of the public health law may reduce the\nreimbursement due to a health care provider for an untimely claim that\notherwise meets the requirements of paragraph one of this subsection by\nan amount not to exceed twenty-five percent of the amount that would\nhave been paid had the claim been submitted in a timely manner;\nprovided, however, that nothing in this subsection shall preclude a\nhealth care provider and an insurer or organization or corporation from\nagreeing to a lesser reduction. The provisions of this subsection shall\nnot apply to any claim submitted three hundred sixty-five days after the\ndate of service, in which case the insurer or organization or\ncorporation may deny the claim in full.\n (i) Except where the parties have developed a mutually agreed upon\nprocess for the reconciliation of coding disputes that includes a review\nof submitted medical records to ascertain the correct coding for\npayment, a general hospital certified pursuant to article twenty-eight\nof the public health law shall, upon receipt of payment of a claim for\nwhich payment has been adjusted based on a particular coding to a\npatient including the assignment of diagnosis and procedure, have the\nopportunity to submit the affected claim with medical records supporting\nthe hospital's initial coding of the claim within thirty days of receipt\nof payment. Upon receipt of such medical records, an insurer or an\norganization or corporation licensed or certified pursuant to article\nforty-three or forty-seven of this chapter or article forty-four of the\npublic health law shall review such information to ascertain the correct\ncoding for payment based on national coding guidelines accepted by the\ncenters for Medicare and Medicaid services or the American medical\nassociation, to the extent there are codes for such services, including\nICD-10 guidelines to the extent available, and process the claim,\nincluding the correct coding, in accordance with the timeframes set\nforth in subsection (a) of this section. In the event the insurer,\norganization, or corporation processes the claim consistent with its\ninitial determination, such decision shall be accompanied by a statement\nof the insurer, organization or corporation setting forth the specific\nreasons why the initial adjustment was appropriate. An insurer,\norganization, or corporation that increases the payment based on the\ninformation submitted by the general hospital, shall pay to the general\nhospital interest on the amount of such increase at the rate set by the\ncommissioner of taxation and finance for corporate taxes pursuant to\nparagraph one of subsection (e) of section one thousand ninety-six of\nthe tax law, to be computed from the date thirty days after initial\nreceipt of the claim if transmitted electronically or forty-five days\nafter initial receipt of the claim if transmitted by paper or facsimile.\nProvided, however, a failure to remit timely payment shall not\nconstitute a violation of this section. Neither the initial or\nsubsequent processing of the claim by the insurer, organization, or\ncorporation shall be deemed an adverse determination as defined in\nsection four thousand nine hundred of this chapter if based solely on a\ncoding determination. Nothing in this subsection shall apply to those\ninstances in which the insurer or organization, or corporation has a\nreasonable suspicion of fraud or abuse or when an insurer, organization,\nor corporation engages in reasonable fraud, waste and abuse detection\nefforts; provided, however, to the extent any subsequent payment\nadjustments are made as a result of the fraud, waste and abuse detection\nprocesses or efforts, such payment adjustments shall be consistent on\nthe coding guidelines required by this subsection.\n (j) An insurer or an organization or corporation licensed or certified\npursuant to article forty-three or forty-seven of this chapter or\narticle forty-four of the public health law or a student health plan\nestablished or maintained pursuant to section one thousand one hundred\ntwenty-four of this chapter shall accept claims submitted by a\npolicyholder or covered person, in writing, including through the\ninternet, by electronic mail or by facsimile.\n (k) The superintendent, in conjunction with the commissioner of\nhealth, shall convene a health care administrative simplification\nworkgroup. The workgroup shall consist of stakeholders, including but\nnot limited to, insurers, hospitals, physicians and consumers or their\nrepresentatives, to study and evaluate mechanisms to reduce health care\nadministrative costs and complexities through standardization,\nsimplification and technology. Areas to be examined by the workgroup\nshall include claims submission and payment, claims attachments,\npreauthorization practices, provider credentialing, insurance\neligibility verification, and access to electronic medical records. The\nworkgroup shall report on its findings and recommendations to the\nsuperintendent, the commissioner of health, the speaker of the assembly\nand the temporary president of the senate within eighteen months of the\neffective date of this subsection.\n (l) Payments to nonparticipating or nonpreferred providers of\nambulance services licensed under article thirty of the public health\nlaw. (1) Whenever an insurer or an organization, or corporation licensed\nor certified pursuant to article forty-three or forty-seven of this\nchapter or article forty-four of the public health law provides that any\nhealth care claims submitted under contracts or agreements issued or\nentered into pursuant to this article or article forty-two, forty-three\nor forty-seven of this chapter and article forty-four of the public\nhealth law are payable to a participating or preferred provider of\nambulance services for services rendered, the insurer, organization, or\ncorporation licensed or certified pursuant to article forty-three or\nforty-seven of this chapter or article forty-four of the public health\nlaw shall be required to pay such benefits either directly to any\nsimilarly licensed nonparticipating or nonpreferred provider at the\nusual and customary charge, which shall not be excessive or\nunreasonable, when the provider has rendered such services, has on file\na duly executed assignment of benefits, and has caused notice of such\nassignment to be given to the insurer, organization, or corporation\nlicensed or certified pursuant to article forty-three or forty-seven of\nthis chapter or article forty-four of the public health law or jointly\nto such nonparticipating or nonpreferred provider and to the insured,\nsubscriber, or other covered person; provided, however, that in either\ncase the insurer, organization, or corporation licensed or certified\npursuant to article forty-three or forty-seven of this chapter or\narticle forty-four of the public health law shall be required to send\nsuch benefit payments directly to the provider who has the assignment on\nfile. When payment is made directly to a provider of ambulance services\nas authorized by this section, the insurer, organization, or corporation\nlicensed or certified pursuant to article forty-three or forty-seven of\nthis chapter or article forty-four of the public health law shall give\nwritten notice of such payment to the insured, subscriber, or other\ncovered person.\n (2) An insurer shall provide reimbursement for those services\nprescribed by this section at rates negotiated between the insurer and\nthe provider of such services. In the absence of agreed upon rates, an\ninsurer shall pay for such services at the usual and customary charge,\nwhich shall not be excessive or unreasonable.\n (3) Nothing contained in this section shall be deemed to prohibit the\npayment of different levels of benefits or from having differences in\ncoinsurance percentages applicable to benefit levels for services\nprovided by participating or preferred providers and nonparticipating or\nnonpreferred providers.\n The provisions of this section shall not apply to policies that do not\ninclude coverage for ambulance services.\n