§ 4406-C — Prohibitions

New York § 4406-C

• Jurisdiction: New York
• Law PBH: Public Health
• Art. 44: Health Maintenance Organizations

Text

§ 4406-c. Prohibitions. 1. For purposes of this section, "health care\nplan" shall mean a health maintenance organization licensed pursuant to\narticle forty-three of the insurance law or certified pursuant to this\narticle or an independent practice association certified or recognized\npursuant to this article or a medical group.\n 2. No health care plan shall by contract or written policy or written\nprocedure prohibit or restrict any health care provider from disclosing\nto any subscriber, enrollee, patient, designated representative or,\nwhere appropriate, prospective enrollee, (hereinafter collectively\nreferred to as enrollee) any information that such provider deems\nappropriate regarding:\n (a) a condition or a course of treatment with an enrollee including\nthe availability of other therapies, consultations, or tests; or\n (b) the provisions, terms, or requirements of the health care plan's\nproducts as they relate to the enrollee, where applicable.\n 3. No health care plan shall by contract, written policy, written\nprocedure or practice prohibit or restrict any health care provider from\nfiling a complaint, making a report or commenting to an appropriate\ngovernmental body regarding the policies or practices of such health\ncare plan which the provider believes may negatively impact upon the\nquality of, or access to, patient care. Nor shall a health care plan\ntake any adverse action, including but not limited to refusing to renew\nor execute a contract or agreement with a health care provider as\nretaliation against a health care provider for filing a complaint,\nmaking a report or commenting to an appropriate governmental body\nregarding policies or practices of such health care plan which may\nviolate this chapter or the insurance law including subsection (g), (k),\n(l), (l-1) or (1-2) of section forty-three hundred three of the\ninsurance law.\n 4. No health care plan shall by contract, written policy or written\nprocedure prohibit or restrict any health care provider from advocating\nto the health care plan on behalf of the enrollee for approval or\ncoverage of a particular course of treatment or for the provision of\nhealth care services.\n 5. No contract or agreement between a health care plan and a health\ncare provider shall contain any clause purporting to transfer to the\nhealth care provider, other than a medical group, by indemnification or\notherwise any liability relating to activities, actions or omissions of\nthe health care plan as opposed to those of the health care provider.\n 5-a. Contracts entered into between a plan and a health care provider\nshall include terms which prescribe:\n (a) the method by which payments to a provider, including any\nprospective or retrospective adjustments thereto, shall be calculated;\n (b) 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 dates upon which any such payments and\nadjustments will be made;\n (c) 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 (d) the process to be employed to resolved 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 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 (e) 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 5-b. No contract entered into with health care providers shall be\nenforceable if it includes terms which transfer financial risk to\nproviders, in a manner inconsistent with the provisions of paragraph (c)\nof subdivision one of section forty-four hundred three of this article,\nor penalize providers for unfavorable case mix so as to jeopardize the\nquality of or enrollees' appropriate access to medically necessary\nservices; provided, however, that payment at less than prevailing fee\nfor service rates or capitation shall not be deemed or presumed prima\nfacie to jeopardize quality or access.\n 5-c. (a) No health care plan shall implement an adverse reimbursement\nchange to a contract with a health care professional that is otherwise\npermitted by the contract, unless, prior to the effective date of the\nchange, the health care plan gives the health care professional with\nwhom the health care plan has directly contracted and who is impacted by\nthe adverse reimbursement change, at least ninety days written notice of\nthe change. If the contracting health care professional objects to the\nchange that is the subject of the notice by the health care plan, the\nhealth care professional may, within thirty days of the date of the\nnotice, give written notice to the health care plan to terminate his or\nher contract with the health care plan effective upon the implementation\ndate of the adverse reimbursement change. For the purposes of this\nsubdivision, the term "adverse reimbursement change" shall mean a\nproposed change that could reasonably be expected to have a material\nadverse impact on the aggregate level of payment to a health care\nprofessional, 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\nsubdivision shall not apply where: (i) 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 (ii) 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 (b) Nothing in this subdivision shall create a private right of action\non behalf of a health care professional against a health care plan for\nviolations of this subdivision.\n * 5-d. If a contract between a plan and a hospital is not renewed or\nis terminated by either party, the parties shall continue to abide by\nthe terms of such contract, including reimbursement terms, for a period\nof two months from the effective date of termination or, in the case of\na non-renewal, from the end of the contract period. Notice shall be\nprovided to all enrollees potentially affected by such termination or\nnon-renewal within fifteen days after commencement of the two-month\nperiod. The commissioner shall have the authority to waive the two-month\nperiod upon the request of either party to a contract that is being\nterminated for cause. This subdivision shall not apply where both\nparties mutually agree in writing to the termination or non-renewal and\nthe plan provides notice to the enrollee at least thirty days in advance\nof the date of contract termination.\n * NB Repealed June 30, 2027\n 5-e. At least sixty days prior to the termination of a contract\nbetween a hospital and a health care plan, the parties shall utilize a\nmutually agreed upon mediator to assist in resolving any outstanding\ncontractual issues. The results of the mediation shall not be binding on\nthe parties.\n 6. No health care plan which provides coverage for prescription drugs\nshall require, or enter into a contract which permits, a copayment which\nexceeds the usual and customary cost of such prescribed drug.\n * 7. No health maintenance organization which provides coverage for\nprescription drugs and for which cost-sharing, deductibles or\nco-insurance obligations are determined by category of prescription\ndrugs shall impose cost-sharing, deductibles or co-insurance obligations\nfor any prescription drug that exceeds the dollar amount of\ncost-sharing, deductibles or co-insurance obligations for non-preferred\nbrand drugs or its equivalent (or brand drugs if there is no\nnon-preferred brand drug category).\n * NB There are 2 sub 7's\n * 7. Any contract provision, written policy or written procedure in\nviolation of this section shall be deemed to be void and unenforceable.\n * NB There are 2 sub 7's\n 8. (a) No health care plan shall by contract, written policy or\nprocedure, or by any other means, deny payment to a general hospital\ncertified pursuant to article twenty-eight of this chapter for a claim\nfor medically necessary inpatient services, observation services, or\nemergency department services provided by a general hospital solely on\nthe basis that the general hospital did not comply with certain\nadministrative requirements of such health care plan with respect to\nthose services.\n (b) Nothing in this subdivision shall preclude a general hospital and\na health care plan 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: (i) any requirement for timely notification must provide\nfor a reasonable extension of timeframes for notification for services\nprovided on weekends or federal holidays, (ii) any agreed to reduction\nin payment for failure to meet administrative requirements, including\ntimely notification shall not exceed seven and one-half percent of the\npayment amount otherwise due for the service provided, and (iii) any\nagreed to reduction in payment for failure to meet administrative\nrequirements including timely notification shall not be imposed if the\npatient's coverage could not be determined by the hospital after\nreasonable efforts at the time the services were provided.\n (c) The provisions of this subdivision shall not apply to the denial\nof a claim: (i) based on a reasonable belief of a health care plan of\nfraud or intentional misconduct resulting in a misrepresentation of\npatient diagnosis or the services provided, or abusive billing; (ii)\nwhen required by a state or federal government program or coverage that\nis provided by this state or a municipality thereof to its respective\nemployees, retirees or members; (iii) that is a duplicate claim, is a\nclaim submitted late pursuant to subsection (g) of section thirty-two\nhundred twenty-four-a of the insurance law, or is for services for a\nbenefit that is not covered under the insured's contract or for a\npatient determined to be ineligible for coverage; (iv) except in the\ncase of medically necessary inpatient services resulting from an\nemergency admission, where there is not an existing participating\nprovider agreement between a health care plan and a general hospital; or\n(v) where the hospital has repeatedly and systematically, over the\nprevious twelve month period, failed to seek prior authorization for\nservices for which prior authorization was required.\n (d) For purposes of this subdivision, an "administrative requirement"\nshall not include requirements: (i) imposed on a health care plan or\nprovider pursuant to federal or state laws, regulations or guidance; or\n(ii) established by the state or federal government applicable to health\ncare plans offering benefits under a state or federal government\nprogram.\n (e) The prohibition on denials set forth in this subdivision shall not\napply to claims for services for which a request for preauthorization\nwas denied by the health care plan prior to delivery of the service.\n 9. A health care plan shall not require a prior authorization\ndetermination for services provided in a neonatal intensive care unit of\na general hospital certified pursuant to article twenty-eight of this\nchapter. Nothing in this subdivision shall prohibit a health care plan\nfrom denying a claim for such services if the services are subsequently\ndetermined not medically necessary.\n 10. (a) Any contract or other arrangement entered into by a health\ncare plan for the provision and administration of pharmacy benefit\nmanagement services on behalf of individuals enrolled in a managed care\nprovider, as defined in section three hundred sixty-four-j of the social\nservices law, shall be based on a pass-through pricing model and include\nthe following requirements:\n (i) Payment to the pharmacy benefit manager for pharmacy benefit\nmanagement services shall be limited to the actual ingredient costs,\ndispensing fees paid to pharmacies, and an administrative fee that\ncovers the cost of providing pharmacy benefit management services\npursuant to a contract described in this paragraph. The department may\nestablish a maximum administrative fee;\n (ii) The pharmacy benefit manager shall identify all sources and\namounts of income, payments, and financial benefits to the pharmacy\nbenefit manager related to the provision and administration of pharmacy\nbenefit management services on behalf of the health care plan,\nincluding, but not limited to, any pricing discounts, rebates of any\nkind, inflationary payments, credits, clawbacks, fees, grants,\nchargebacks, reimbursements, or other benefits and shall ensure that any\nportion of such income, payments, and financial benefits is passed\nthrough to the health care plan in full to reduce the reportable\ningredient cost;\n (iii) The pharmacy benefit manager shall fully disclose to the\ndepartment and to the health care plan the sources and amounts of all\nincome, payments, and financial benefits referred to in subparagraph\n(ii) of this paragraph received by the pharmacy benefit manager;\n (iv) The pharmacy benefit manager shall identify all ingredient costs\nand dispensing fees or similar payments made by the pharmacy benefit\nmanager to any pharmacy in connection with the contract or other\narrangement;\n (v) The pharmacy benefit manager shall not utilize any form of spread\npricing in any contract or other arrangement with health care plans. For\npurposes of this subdivision "spread pricing" means any amount charged\nor claimed by the pharmacy benefit manager in excess of the amount paid\nto pharmacies on behalf of the health care plan less an administrative\nfee as described in this paragraph. Any such excess amount shall be\nremitted to the health care plan on a quarterly basis;\n (vi) Pharmacy benefit managers shall make their payment model for\nadministrative fees available to the health care plan and to the\ndepartment. The health care plan shall, if so directed by the\ndepartment, make changes to the payment model and resubmit an amended\ncontract or contracts to the department for review and approval.\n (b) Any changes to premiums resulting from such contracts shall be\nsubject to certification by the state's actuary as actuarially\nappropriate.\n (c) Contracts or other arrangements subject to this subdivision shall\nbe submitted to the department for review and approval as required by\nand in accordance with state law and the regulations of the department.\nContracts or other arrangements subject to this subdivision existing and\nin force at the time of enactment of this subdivision shall be submitted\nto the department for review and approval on or before July first, two\nthousand nineteen.\n 11. A contract between a health care plan and a health care provider\nshall include a provision that requires the health care provider to have\nin place business processes to ensure the timely provision of provider\ndirectory information to the health care plan. A health care provider\nshall submit such provider directory information to a health care plan,\nat a minimum, when a provider begins or terminates a network agreement\nwith a health care plan, when there are material changes to the content\nof the provider directory information of such health care provider, and\nat any other time, including upon the health care plan's request, as the\nhealth care provider determines to be appropriate. For purposes of this\nsubsection, "provider directory information" shall include the name,\naddress, specialty, telephone number, and digital contact information of\nsuch health care provider; whether the provider is accepting new\npatients; for mental health and substance use disorder services\nproviders, any affiliations with participating facilities certified or\nauthorized by the office of mental health or the office of addiction\nservices and supports, and any restrictions regarding the availability\nof the individual provider's services; and in the case of physicians,\nboard certification, languages spoken, and any affiliations with\nparticipating hospitals.\n 12. A contract between a health care plan and a health care provider\nshall include a provision that states that the provider shall reimburse\nthe enrollee for the full amount paid by the enrollee in excess of the\nin-network cost-sharing amount, plus interest at an interest rate\ndetermined by the commissioner in accordance with 42 U.S.C. §\n300gg-139(b), for the services involved when the enrollee is provided\nwith inaccurate network status information by the health care plan 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 health care plan provides\ninaccurate network status information to the enrollee indicating the\nprovider was a participating provider when such provider was not a\nparticipating provider, the health care plan shall reimburse the\nprovider for the out-of-network services regardless of whether the\nenrollee's coverage includes out-of-network services. Nothing in this\nsubdivision shall prohibit a health care provider from requiring in the\nterms of a contract with a health care plan that the health care plan\nremove, at the time of termination of such contract, the provider from\nthe health care plan's provider directory or that the health care plan\nbear financial responsibility for providing inaccurate network status\ninformation to an enrollee.\n 13. (a) No contract or agreement between a health plan subject to this\narticle and a health care provider, other than a residential health care\nfacility as defined by section twenty-eight hundred one of this chapter,\nshall include a provision that:\n (i) contains a most-favored-nation provision; or\n (ii) restricts the ability of a health plan, an entity that contracts\nwith a health care plan for a provider network, or a health care\nprovider to disclose: (A) actual claims costs; or (B) price or quality\ninformation required to be disclosed under federal law, including the\nallowed amount, negotiated rates or discounts, or any other\nclaim-related financial obligations, including, but not limited to,\npatient cost-sharing covered by the provider contract to any subscriber,\nenrollee, group, or other entity receiving health care services pursuant\nto the contract, or to any public compilation of reimbursement data such\nas the New York all payer database required by law or regulation,\nprovided that no disclosure shall include protected health information\nor other information covered by statutory or other privilege.\n (b) For purposes of this subdivision, the term "health plan" shall\ninclude:\n (i) an insurer licensed pursuant to the insurance law or a health\nmaintenance organization certified pursuant to this article; and\n (ii) a third-party administrator, affiliated with an insurer or health\nmaintenance organization, who administers a health benefit plan.\n * 14. (a) A health care plan may pay a claim for reimbursement made by\na provider using a credit card, virtual credit card, or electronic funds\ntransfer payment method that imposes on the provider a specifically\nidentified fee or similar dedicated charge to process the payment if in\nadvance of using such reimbursement method:\n (i) The health care plan notifies the provider of the potential fees\nor other charges associated with the use of the credit card, virtual\ncredit card, or electronic funds transfer payment;\n (ii) The health care plan offers the provider an alternative payment\nmethod that does not impose fees or similar charges on the provider; and\n (iii) 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 (b) A decision pursuant to paragraph (a) of this subdivision shall\nremain in effect until the provider notifies the health care plan, in\nwriting, of a change to the designated payment type.\n (c) If a health care plan contracts with a vendor to process payments\nof providers' claims, the health care plan shall require the vendor to\ncomply with the provisions of paragraph (a) of this subdivision.\n (d) 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 subdivision.\n (e) For any contract that is in effect on or before the effective date\nof this subdivision or that is entered into, amended or renewed on or\nafter the effective date of this subdivision, a health care plan 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 (ii) of paragraph (a) of this subdivision.\n (f) For purposes of this section, the following definitions shall\napply:\n (i) "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 health\ncare plan to provide health care services to an enrollee.\n (ii) "Virtual credit card" shall mean a single-use series of numbers\nlinked to a fixed dollar amount and provided by a health care plan to a\nprovider for the purpose of paying a claim for health care services\nperformed by the provider.\n * NB Effective June 17, 2026\n