§ 4325 — Prohibitions

New York § 4325

• Jurisdiction: New York
• Law ISC: Insurance
• Art. 43: Non-profit Medical and Dental Indemnity, or Health and Hospital Service Corporations

Text

§ 4325. Prohibitions. (a) No corporation organized under this article\nshall by contract, written policy or written procedure prohibit or\nrestrict any health care provider from disclosing to any subscriber,\ndesignated representative or, where appropriate, prospective subscriber,\n(hereinafter collectively referred to as subscriber) any information\nthat such provider deems appropriate regarding:\n (1) a condition or a course of treatment with a subscriber including\nthe availability of other therapies, consultations, or tests; or\n (2) the provisions, terms, or requirements of the corporation's\nproducts as they relate to the subscriber.\n (b) No corporation organized under this article shall by contract,\nwritten policy, written procedure or practice prohibit or restrict any\nhealth care provider from filing a complaint, making a report or\ncommenting to an appropriate governmental body regarding the policies or\npractices of such corporation which the provider believes may negatively\nimpact upon the quality of or access to patient care. Nor shall a\ncorporation organized under this article take any adverse action,\nincluding but not limited to refusing to renew or execute a contract or\nagreement with a health care provider as retaliation against a health\ncare provider for filing a complaint, making a report or commenting to\nan appropriate governmental body regarding policies or practices of such\ncorporation which may violate this chapter including subsection (g),\n(k), (1), (1-1) or (1-2) of section forty-three hundred three of this\narticle.\n (c) No corporation organized under this article shall by contract,\nwritten policy or written procedure prohibit or restrict any health care\nprovider from advocating to the corporation on behalf of the subscriber\nfor approval or coverage of a particular course of treatment.\n (d) No contract or agreement between a corporation organized under\nthis article and a health care provider shall contain any clause\npurporting to transfer to the health care provider by indemnification or\notherwise any liability relating to activities, actions or omissions of\nthe corporation as opposed to the health care provider.\n (e) Contracts entered into between an insurer and a health care\nprovider shall include terms which prescribe:\n (1) the method by which payments to a provider, including any\nprospective or retrospective adjustments thereto, shall be calculated;\n (2) the time periods within which such calculations will be completed,\nthe dates upon which any such payments and adjustments shall be\ndetermined to be due, and the rates upon which any such payments and\nadjustments will be made;\n (3) a description of the records or information relied upon to\ncalculate any such payments and adjustments, and a description of how\nthe provider can access a summary of such calculations and adjustments;\n (4) the process to be employed to resolve disputed incorrect or\nincomplete records or information and to adjust any such payments and\nadjustments which have been calculated by relying on any such incorrect\nor incomplete records or information so disputed; provided, however,\nthat nothing herein shall be deemed to authorize or require the\ndisclosure of personally identifiable patient information or information\nrelated to other individual health care providers or the plan's\nproprietary data collection systems, software or quality assurance or\nutilization review methodologies; and\n (5) the right of either party to the contract to seek resolution of a\ndispute arising pursuant to the payment terms of such contract through a\nproceeding under article seventy-five of the civil practice law and\nrules.\n (f) No contract entered into between an insurer and a health care\nprovider shall be enforceable if it includes terms which transfer\nfinancial risk to providers, in a manner inconsistent with the\nprovisions of paragraph (c) of subdivision one of section forty-four\nhundred three of the public health law, or penalize providers for\nunfavorable case mix so as to jeopardize the quality of or insureds'\nappropriate access to medically necessary services; provided, however,\nthat payment at less than prevailing fee for service rates or capitation\nshall not be deemed or presumed prima facie to jeopardize quality or\naccess.\n (g)(1) No insurer shall implement an adverse reimbursement change to a\ncontract with a health care professional that is otherwise permitted by\nthe contract, unless, prior to the effective date of the change, the\ninsurer gives the health care professional with whom the insurer has\ndirectly contracted and who is impacted by the adverse reimbursement\nchange, at least ninety days written notice of the change. If the\ncontracting health care professional objects to the change that is the\nsubject of the notice by the insurer, the health care professional may,\nwithin thirty days of the date of the notice, give written notice to the\ninsurer to terminate his or her contract with the insurer effective upon\nthe implementation date of the adverse reimbursement change. For the\npurposes of this subsection, the term "adverse reimbursement change"\nshall mean a proposed change that could reasonably be expected to have a\nmaterial adverse impact on the aggregate level of payment to a health\ncare professional, and the term "health care professional" shall mean a\nhealth care professional licensed, registered or certified pursuant to\ntitle eight of the education law. The notice provisions required by this\nsubsection shall not apply where: (A) such change is otherwise required\nby law, regulation or applicable regulatory authority, or is required as\na result of changes in fee schedules, reimbursement methodology or\npayment policies established by a government agency or by the American\nMedical Association's current procedural terminology (CPT) codes,\nreporting guidelines and conventions; or (B) such change is expressly\nprovided for under the terms of the contract by the inclusion of or\nreference to a specific fee or fee schedule, reimbursement methodology\nor payment policy indexing mechanism.\n (2) Nothing in this subsection shall create a private right of action\non behalf of a health care professional against an insurer for\nviolations of this subsection.\n (h) No corporation or insurer organized or licensed under this chapter\nwhich provides coverage for prescription drugs shall require, or enter\ninto a contract which permits, a copayment which exceeds the usual and\ncustomary cost of such prescribed drug.\n (i) Any contract provision, written policy or written procedure in\nviolation of this section shall be deemed to be void and unenforceable.\n * (j) If a contract between a corporation and a hospital is not\nrenewed or is terminated by either party, the parties shall continue to\nabide by the terms of such contract, including reimbursement terms, for\na period of two months from the effective date of termination or, in the\ncase of a non-renewal, from the end of the contract period. Notice shall\nbe provided to all subscribers potentially affected by such termination\nor non-renewal within fifteen days after commencement of the two-month\nperiod. The commissioner of health shall have the authority to waive the\ntwo-month period upon the request of either party to a contract that is\nbeing terminated for cause. This subsection shall not apply where both\nparties mutually agree in writing to the termination or non-renewal and\nthe corporation provides notice to the subscriber at least thirty days\nin advance of the date of contract termination.\n * NB Repealed June 30, 2027\n (k) (1) No corporation organized under this article shall by written\ncontract, written policy or procedure, or by any other means, deny\npayment to a general hospital certified pursuant to article twenty-eight\nof the public health law for a claim for medically necessary inpatient\nservices, observation services, or emergency department services\nprovided by a general hospital solely on the basis that the general\nhospital did not comply with certain administrative requirements of such\ncorporation with respect to those services.\n (2) Nothing in this subsection shall preclude a general hospital and a\ncorporation from agreeing to certain administrative requirements\nrelating to payment for inpatient services, observation services, or\nemergency department services, including, but not limited to timely\nnotification that medically necessary inpatient services have been\nprovided and to reductions in payment for failure to comply with certain\nadministrative requirements including timely notification; provided,\nhowever that: (A) any requirement for timely notification must provide\nfor a reasonable extension of timeframes for notification for services\nprovided on weekends or federal holidays, (B) any agreed to reduction in\npayment for failure to meet administrative requirements including timely\nnotification shall not exceed seven and one-half percent of the payment\namount otherwise due for the services provided, and (C) any agreed to\nreduction in payment for failure to meet administrative requirements\nincluding timely notification shall not be imposed if the patient's\ninsurance coverage could not be determined by the hospital after\nreasonable efforts at the time the services were provided.\n (3) The provisions of this subsection shall not apply to the denial of\na claim: (A) based on a reasonable belief of a corporation of fraud or\nintentional misconduct resulting in misrepresentation of patient\ndiagnosis or the services provided, or abusive billing by a corporation;\n(B) when required by a state or federal government program or coverage\nthat is provided by this state or a municipality thereof to its\nrespective employees, retirees or members; (C) that is a duplicate\nclaim, is a claim submitted late pursuant to subsection (g) of section\nthirty-two hundred twenty-four-a of this article, or is for services for\na benefit that is not covered under the insured's contract or for a\npatient determined to be ineligible for coverage; (D) except in the case\nof medically necessary inpatient services resulting from an emergency\nadmission, where there is not an existing participating provider\nagreement between such corporation and a general hospital; or (E) where\nthe hospital has repeatedly and systematically, over the previous twelve\nmonth period, failed to seek prior authorization for services for which\nprior authorization was required.\n (4) For purposes of this subsection, an "administrative requirement"\nshall not include requirements: (A) imposed on a corporation or provider\npursuant to federal or state laws, regulations or guidance; (B)\nestablished by the state or federal government applicable to\ncorporations offering benefits under a state or federal government\nprogram.\n (5) The prohibition on denials set forth in this subsection shall not\napply to claims for services for which a request for preauthorization\nwas denied by the corporation prior to delivery of the service.\n (l) A corporation organized under this article shall not require a\nprior authorization determination for services provided in a neonatal\nintensive care unit of a general hospital certified pursuant to article\ntwenty-eight of the public health law. Nothing in this subsection shall\nprohibit a corporation organized under this article from denying a claim\nfor such services if the services are subsequently determined not\nmedically necessary.\n (m) At least sixty days prior to the termination of a contract between\na hospital and an organization, the parties shall utilize a mutually\nagreed upon mediator to assist in resolving any outstanding contractual\nissues. The results of the mediation shall not be binding on the\nparties.\n (n) A contract between a corporation and a health care provider shall\ninclude a provision that requires the health care provider to have in\nplace business processes to ensure the timely provision of provider\ndirectory information to the corporation. A health care provider shall\nsubmit such provider directory information to a corporation, at a\nminimum, when a provider begins or terminates a network agreement with a\ncorporation, when there are material changes to the content of the\nprovider directory information of the health care provider, and at any\nother time, including upon the corporation's request, as the health care\nprovider determines to be appropriate. For purposes of this subsection,\n"provider directory information" shall include the name, address,\nspecialty, telephone number, and digital contact information of such\nhealth care provider; whether the provider is accepting new patients;\nfor mental health and substance use disorder services providers, any\naffiliations with participating facilities certified or authorized by\nthe office of mental health or the office of addiction services and\nsupports, and any restrictions regarding the availability of the\nindividual provider's services; and in the case of physicians, board\ncertification, languages spoken, and any affiliations with participating\nhospitals.\n (o) A contract between a corporation and a health care provider shall\ninclude a provision that states that the provider shall reimburse the\ninsured for the full amount paid by the insured in excess of the\nin-network cost-sharing amount, plus interest at an interest rate\ndetermined by the superintendent in accordance with 42 U.S.C. §\n300gg-139(b), for the services involved when the insured is provided\nwith inaccurate network status information by the corporation in a\nprovider directory or in response to a request that stated that the\nprovider was a participating provider when the provider was not a\nparticipating provider. In the event the corporation provides inaccurate\nnetwork status information to the insured indicating the provider was a\nparticipating provider when such provider was not a participating\nprovider, the corporation shall reimburse the provider for the\nout-of-network services regardless of whether the insured's coverage\nincludes out-of-network services. Nothing in this subsection shall\nprohibit a health care provider from requiring in the terms of a\ncontract with a corporation that the corporation remove, at the time of\ntermination of such contract, the provider from the corporation's\nprovider directory or that the corporation bear financial responsibility\nfor providing inaccurate network status information to an insured.\n * (p) (1) A corporation organized under this article may pay a claim\nfor reimbursement made by a provider using a credit card, virtual credit\ncard, or electronic funds transfer payment method that imposes on the\nprovider a specifically identified fee or similar charge dedicated to\nprocess the payment if in advance of using such reimbursement method:\n (A) The corporation notifies the provider of the potential fees or\nother charges associated with the use of the credit card, virtual credit\ncard, or electronic funds transfer payment;\n (B) The corporation offers the provider an alternative payment method\nthat does not impose fees or similar charges on the provider; and\n (C) The provider or a designee of the provider elects to accept\npayment of the claim using the credit card, virtual credit card, or\nelectronic funds transfer payment method.\n (2) A decision pursuant to paragraph one of this subsection shall\nremain in effect until the provider notifies the corporation, in\nwriting, of a change to the designated payment type.\n (3) If a corporation contracts with a vendor to process payments of\nproviders' claims, the insurer shall require the vendor to comply with\nthe provisions of paragraph one of this subsection.\n (4) No policy or contract issued, renewed, modified, altered or\namended after the effective date of this section shall contain\nprovisions allowing for waiver of the notice requirements contained in\nthis subsection.\n (5) For any contract that is in effect on or before the effective date\nof this subsection or that is entered into, amended or renewed on or\nafter the effective date of this subsection, a corporation that\ninitiates a payment to a provider using, or changes the payment method\nto, a health care electronic funds transfers and remittance advice\ntransaction shall not charge a fee solely to transmit the payment to the\nprovider unless the provider elects to accept payment in accordance with\nsubparagraph (B) of paragraph one of this subsection.\n (6) For purposes of this subsection, the following terms shall have\nthe following meanings:\n (A) "Provider" shall mean a health care professional or a group of\nhealth care professionals licensed pursuant to title eight of the\neducation law that has a participating provider contract with a\ncorporation to provide health care services to an insured.\n (B) "Virtual credit card" shall mean a single-use series of numbers\nlinked to a fixed dollar amount and provided by a corporation organized\nunder this article to a provider for the purpose of paying a claim for\nhealth care services performed by the provider.\n * NB Effective June 17, 2026\n