S T A T E O F N E W Y O R K
________________________________________________________________________
311
2009-2010 Regular Sessions
I N S E N A T E
(PREFILED)
January 7, 2009
___________
Introduced by Sen. MAZIARZ -- read twice and ordered printed, and when
printed to be committed to the Committee on Insurance
AN ACT to amend the insurance law and the public health law, in relation
to establishing procedures for the collection of overpayments from
health care providers based upon eligibility of the insured; and
requiring insurers to notify health care professionals by written and
electronic formats regarding particular billing codes; and requiring
contracts entered into with a health care provider to include certain
information
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Section 3224-a of the insurance law is amended by adding a
new subsection (b-1) to read as follows:
(B-1) WHERE AN INSURER OR ORGANIZATION OR CORPORATION SEEKS A REFUND
FROM A HEALTH CARE PROVIDER OF A PAYMENT PREVIOUSLY MADE FOR HEALTH CARE
SERVICES:
(1) IN A CASE WHERE AN INSURER OR ORGANIZATION OR CORPORATION IS SEEK-
ING A REFUND FOR PAYMENT PREVIOUSLY MADE BASED UPON A GOOD FAITH BELIEF
REGARDING THE ELIGIBILITY OF A PERSON FOR COVERAGE, OR THE LIABILITY OF
ANOTHER INSURER OR CORPORATION OR ORGANIZATION FOR ALL OR PART OF THE
CLAIM, THE INSURER OR ORGANIZATION OR CORPORATION MUST NOTIFY THE HEALTH
CARE PROVIDER IN WRITING THE AMOUNT OF THE REFUND BEING SOUGHT, THE
SPECIFIC REASONS WHY THE REFUND IS BEING SOUGHT, AND ANY INFORMATION IT
MAY HAVE REGARDING ANOTHER INSURER, ORGANIZATION, CORPORATION OR OTHER
ENTITY THAT MAY BE LEGALLY OBLIGATED TO MAKE PAYMENT. IF THE INSURER,
ORGANIZATION OR CORPORATION SEEKING THE REFUND DOES NOT MAINTAIN ANY
SUCH INFORMATION, IT SHALL SO STATE ON THE NOTICE TO THE HEALTH CARE
PROVIDER. NOTICE OF SUCH REFUND DEMAND SHALL BE MADE AS SOON AS REASON-
ABLY PRACTICABLE AFTER RECEIPT OF INFORMATION THAT SUCH INSURER, ORGAN-
IZATION OR CORPORATION WAS NOT RESPONSIBLE FOR PAYMENT. FAILURE TO IDEN-
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD01165-02-9
S. 311 2
TIFY SUCH OTHER RESPONSIBLE PAYOR WHERE SUCH INFORMATION IS KNOWN TO THE
INSURER, OR ORGANIZATION OR CORPORATION, OR FAILURE TO TIMELY NOTIFY THE
HEALTH CARE PROVIDER ONCE SUCH INFORMATION IS RECEIVED REGARDING THAT
SUCH INSURER, ORGANIZATION OR CORPORATION WAS NOT RESPONSIBLE FOR
PAYMENT, SHALL BAR SUCH INSURER, ORGANIZATION OR CORPORATION FROM
ATTEMPTING TO OBTAIN THE REFUND OF THE PREVIOUS PAYMENT. THE HEALTH CARE
PROVIDER FROM WHOM THE REFUND IS SOUGHT MAY SUBMIT SUCH CLAIM TO THE
LEGALLY RESPONSIBLE INSURER, CORPORATION OR ORGANIZATION FOR PAYMENT.
FOR THE PURPOSES OF COMPLYING WITH ANY TIME LIMITATION THE INSURER,
ORGANIZATION OR CORPORATION LEGALLY RESPONSIBLE FOR PAYMENT MAY HAVE
REGARDING THE SUBMISSION OF CLAIMS, THE DATE OF NOTICE OF THE REFUND
DEMAND FROM THE INSURER, ORGANIZATION OR CORPORATION SEEKING THE REFUND
SHALL BE DEEMED TO BE THE DATE OF THE RENDERING OF HEALTH CARE SERVICES.
SUCH TIME LIMITATION OF THE LEGALLY RESPONSIBLE INSURER, CORPORATION OR
ORGANIZATION SHALL BE EXCUSED WHERE THE IDENTITY OF SUCH INSURER, CORPO-
RATION OR ORGANIZATION CANNOT REASONABLY BE IDENTIFIED WITHIN THE TIME
LIMITATION. ALL UTILIZATION REVIEW, AS DEFINED BY ARTICLE FORTY-NINE OF
THIS CHAPTER AND ARTICLE FORTY-NINE OF THE PUBLIC HEALTH LAW, PERFORMED
BY THE INSURER, ORGANIZATION OR CORPORATION SEEKING THE REFUND SHALL BE
BINDING ON THE LEGALLY RESPONSIBLE INSURER, ORGANIZATION OR CORPORATION
TO WHOM THE HEALTH CARE PROVIDER SUBSEQUENTLY SUBMITS THE CLAIM. THE
CLAIM SHALL NOT BE DENIED BY THE LEGALLY RESPONSIBLE INSURER, ORGANIZA-
TION OR CORPORATION ON THE BASIS OF LACK OF AUTHORIZATION TO PROVIDE
SUCH HEALTH CARE SERVICES.
(2) IN A CASE WHERE THE INSURER OR ORGANIZATION OR CORPORATION IS
SEEKING THE REFUND BASED UPON A DETERMINATION REGARDING THE AMOUNT OF
THE CLAIM PAID, SUCH INSURER MAY NOT ATTEMPT TO COLLECT SUCH PREVIOUS
PAYMENT UNLESS THE FOLLOWING CAN BE DEMONSTRATED:
(I) THE INSURER, ORGANIZATION OR CORPORATION HAS IDENTIFIED IN WRITING
THE FINDING OF EACH AND EVERY CLAIM REVIEWED SUFFICIENT TO GIVE THE
HEALTH CARE PROVIDER REASONABLY SPECIFIC NOTICE WHY SUCH PREVIOUS
PAYMENT WAS ALLEGEDLY INAPPROPRIATELY MADE;
(II) THE INSURER, ORGANIZATION OR CORPORATION PROVIDES TO THE HEALTH
CARE PROVIDER A FULL AND MEANINGFUL OPPORTUNITY TO CHALLENGE THE FIND-
INGS ON THE CLAIMS REVIEWED PRIOR TO THE COMMENCEMENT OF ANY ADVERSARIAL
PROCEEDING TO COLLECT ANY SUCH PREVIOUS PAYMENT ALLEGEDLY INAPPROPRIATE-
LY MADE; AND
(III) SUCH INSURER, ORGANIZATION OR CORPORATION HAS DETERMINED AND
NOTIFIED THE HEALTH CARE PROVIDER IN WRITING IF THERE HAVE BEEN UNDER-
PAYMENTS TO SUCH HEALTH CARE PROVIDER AND THE FULL AMOUNT OF THE UNDER-
PAYMENTS HAVE BEEN SUBTRACTED FROM THE TOTAL AMOUNT OF PREVIOUS PAYMENTS
ALLEGEDLY INAPPROPRIATELY MADE.
(3) IN NO EVENT MAY AN INSURER, ORGANIZATION OR CORPORATION, WITHOUT
THE CONSENT OF THE HEALTH CARE PROVIDER FROM WHOM THE REFUND IS SOUGHT,
USE EXTRAPOLATION TO DETERMINE THE TOTAL OF SUCH PREVIOUS PAYMENTS
ALLEGEDLY INAPPROPRIATELY MADE. SUCH CONSENT MAY NOT BE OBTAINED BY
INCLUSION IN THE GENERAL CONTRACT OF THE HEALTH CARE PROVIDER WITH THE
INSURER, ORGANIZATION OR CORPORATION. IF EXTRAPOLATION IS USED TO DETER-
MINE THE TOTAL AMOUNT THE INSURER, ORGANIZATION OR CORPORATION MUST, IN
ADDITION TO MEETING THE REQUIREMENTS OF PARAGRAPH TWO OF THIS
SUBSECTION:
(I) PROVIDE INFORMATION TO THE HEALTH CARE PROVIDER HOW THE SAMPLE OF
CLAIMS WAS SELECTED UPON WHICH THE EXTRAPOLATED TOTAL WAS DETERMINED, AS
WELL AS THE ERROR RATE;
S. 311 3
(II) DEMONSTRATE THAT THE SAMPLE OF CLAIMS REVIEWED WAS SUFFICIENT IN
SIZE TO PERMIT A GENERALIZATION FOR ALL CLAIMS SUBMITTED DURING THE TIME
PERIOD UNDER REVIEW;
(III) IDENTIFY THE FINDINGS OF EACH AND EVERY CLAIM REVIEWED IN SUCH
SUFFICIENT DETAIL AS TO APPRISE THE HEALTH CARE PROVIDER WHY IT WAS
DETERMINED THAT THE PREVIOUS PAYMENT WAS ALLEGEDLY INAPPROPRIATELY MADE;
(IV) ASSURE THAT THE FINDINGS OF THE CLAIMS REVIEWED ARE NOT EXTRAPO-
LATED TO CLAIMS THAT WERE SUBMITTED OUTSIDE OF THE PERIOD OF TIME THAT
CLAIMS WERE REVIEWED;
(V) PROVIDE TO THE HEALTH CARE PROVIDER A FULL AND MEANINGFUL OPPORTU-
NITY TO CHALLENGE THE FINDINGS ON THE CLAIMS REVIEWED, AS WELL AS THE
MANNER BY WHICH THE TOTAL AMOUNT OF PREVIOUS PAYMENTS ALLEGEDLY INAPPRO-
PRIATELY MADE WAS DETERMINED, PRIOR TO THE COMMENCEMENT OF ANY ADVER-
SARIAL PROCEEDING TO COLLECT ANY SUCH INAPPROPRIATE PREVIOUS PAYMENTS;
AND
(VI) DETERMINED IF THERE HAVE BEEN UNDERPAYMENTS TO SUCH HEALTH CARE
PROVIDER AND THOSE AMOUNTS HAVE BEEN USED TO OFFSET ANY RESPONSIBILITY
OF THE HEALTH CARE PROVIDER TO REPAY THE PREVIOUS PAYMENTS ALLEGEDLY
INAPPROPRIATELY MADE.
(4) IN NO EVENT MAY A REFUND FOR A PREVIOUS PAYMENT BE SOUGHT WHERE
UTILIZATION REVIEW PURSUANT TO ARTICLE FORTY-NINE OF THIS CHAPTER OR
ARTICLE FORTY-NINE OF THE PUBLIC HEALTH LAW HAVE BEEN PERFORMED, EXCEPT
AS PROVIDED IN PARAGRAPH ONE OF THIS SUBSECTION.
(5) IN NO EVENT MAY A REFUND FOR A PREVIOUS PAYMENT BE SOUGHT EXCEPT
AS OTHERWISE PROVIDED BY THIS SUBSECTION.
(6) IN NO EVENT MAY AN INSURER, ORGANIZATION OR CORPORATION, WITHOUT
THE CONSENT OF THE HEALTH CARE PROVIDER, ATTEMPT TO OBTAIN SUCH PREVIOUS
PAYMENTS DETERMINED TO HAVE BEEN INAPPROPRIATELY MADE, AS SET FORTH IN
THIS SUBSECTION, BY OFFSETTING FUTURE PAYMENTS DUE TO SUCH HEALTH CARE
PROVIDER. SUCH CONSENT MAY NOT BE OBTAINED BY INCLUSION IN THE GENERAL
CONTRACT BETWEEN THE HEALTH CARE PROVIDER AND THE INSURER, ORGANIZATION
OR CORPORATION.
(7) THE HEALTH CARE PROVIDER SHALL BE GIVEN A PERIOD OF TIME OF NO
LESS THAN SIX MONTHS TO REFUND PREVIOUS PAYMENTS THAT HAVE BEEN, AS SET
FORTH IN THIS SUBSECTION, DETERMINED TO BE INAPPROPRIATELY MADE.
S 2. Subsection (d) of section 4803 of the insurance law, as added by
chapter 705 of the laws of 1996, is amended to read as follows:
(d) An insurer shall develop and implement policies and procedures to
ensure that health care providers participating in the [the] in-network
benefits portion of an insurer's network for a managed care product are
regularly informed of information maintained by the insurer to evaluate
the performance or practice of the health care professional. The insurer
shall consult with health care professionals in developing methodologies
to collect and analyze provider profiling data. Insurers shall provide
any such information and profiling data and analysis to these health
care professionals. Such information, data or analysis shall be provided
on a periodic basis appropriate to the nature and amount of data and the
volume and scope of services provided. SUCH INFORMATION, DATA AND ANALY-
SIS SHALL BE PROVIDED TO THE SUPERINTENDENT AT THE SAME TIME SUCH INFOR-
MATION, DATA AND ANALYSIS IS PROVIDED TO HEALTH CARE PROFESSIONALS. Any
profiling data used to evaluate the performance or practice of such a
health care professional shall be measured against stated criteria and
an appropriate group of health care professionals using similar treat-
ment modalities serving a comparable patient population. Upon presenta-
tion of such information or data, each such health care professional
shall be given the opportunity to discuss the unique nature of the
S. 311 4
health care professional's patient population which may have a bearing
on the professional's profile and to work cooperatively with the insurer
to improve performance. AN INSURER SHALL, ON A PERIODIC BASIS, NOTIFY
HEALTH CARE PROFESSIONALS BY WRITTEN AND ELECTRONIC FORMATS REGARDING
PARTICULAR BILLING CODES USED BY HEALTH CARE PROFESSIONALS WHICH MAY BE
OVERUTILIZED OR INAPPROPRIATELY UTILIZED. SUCH NOTIFICATION SHALL BE A
CONDITION PRECEDENT TO TAKE ANY ACTION TO RECOUP PREVIOUSLY PAID
PAYMENTS UNDER SECTION THREE THOUSAND TWO HUNDRED TWENTY-FOUR-A OF THIS
CHAPTER.
S 3. Subdivision 4 of section 4406-d of the public health law, as
added by chapter 705 of the laws of 1996, is amended to read as follows:
4. A health care plan shall develop and implement policies and proce-
dures to ensure that health care professionals are regularly informed of
information maintained by the health care plan to evaluate the perform-
ance or practice of the health care professional. The health care plan
shall consult with health care professionals in developing methodologies
to collect and analyze health care professional profiling data. Health
care plans shall provide any such information and profiling data and
analysis to health care professionals. Such information, data or analy-
sis shall be provided on a periodic basis appropriate to the nature and
amount of data and the volume and scope of services provided. SUCH
INFORMATION, DATA AND ANALYSIS SHALL ALSO BE PROVIDED TO THE DEPARTMENT
AT THE SAME TIME THE INFORMATION, DATA AND ANALYSIS IS PROVIDED TO
HEALTH CARE PROFESSIONALS. Any profiling data used to evaluate the
performance or practice of a health care professional shall be measured
against stated criteria and an appropriate group of health care profes-
sionals using similar treatment modalities serving a comparable patient
population. Upon presentation of such information or data, each health
care professional shall be given the opportunity to discuss the unique
nature of the health care professional's patient population which may
have a bearing on the health care professional's profile and to work
cooperatively with the health care plan to improve performance. A
HEALTH CARE PLAN SHALL, ON A PERIODIC BASIS, NOTIFY HEALTH CARE PROFES-
SIONALS BY WRITTEN AND ELECTRONIC FORMATS REGARDING PARTICULAR BILLING
CODES USED BY HEALTH CARE PROFESSIONALS WHICH MAY BE OVERUTILIZED OR
INAPPROPRIATELY UTILIZED. SUCH NOTIFICATION SHALL BE A CONDITION PRECE-
DENT TO TAKING ANY ACTION TO RECOUP PAYMENTS PREVIOUSLY PAID AS PROVIDED
UNDER SECTION THREE THOUSAND TWO HUNDRED TWENTY-FOUR-A OF THE INSURANCE
LAW.
S 4. Subsection (e) of section 3217-b of the insurance law, as added
by chapter 586 of the laws of 1998, is amended to read as follows:
(e) Contracts entered into between an insurer and a health care
provider shall include terms which prescribe:
(1) the method by which payments to a provider, including any prospec-
tive or retrospective adjustments thereto, shall be calculated;
(2) the time periods within which such calculations will be completed,
the dates upon which any such payments and adjustments shall be deter-
mined to be due, and the dates upon which any such payments and adjust-
ments will be made;
(3) a description of the records or information relied upon to calcu-
late any such payments and adjustments, and a description of how the
provider can access a summary of such calculations and adjustments;
(4) the process to be employed to resolve disputed incorrect or incom-
plete records or information and to adjust any such payments and adjust-
ments which have been calculated by relying on any such incorrect or
incomplete records or information so disputed; provided, however, that
S. 311 5
nothing herein shall be deemed to authorize or require the disclosure of
personally identifiable patient information or information related to
other individual health care providers or the plan's proprietary data
collection systems, software or quality assurance or utilization review
methodologies; [and]
(5) the right of either party to the contract to seek resolution of a
dispute arising pursuant to the payment terms of such contracts through
a proceeding under article seventy-five of the civil practice law and
rules;
(6) THAT THE INSURER WILL NOTIFY THE PROVIDER, ELECTRONICALLY AND IN
WRITING, AS SOON AS REASONABLY PRACTICABLE, OF SPECIFIC CHANGES TO THE
APPLICABLE PAYMENT SCHEDULE AND/OR SPECIFIC CHANGES TO THE MANNER BY
WHICH PAYMENTS WILL BE CALCULATED;
(7) THAT A PROVIDER CAN OBTAIN SPECIFIC INFORMATION FROM THE INSURER
REGARDING THE PAYMENT FOR A PARTICULAR SERVICE OR SERVICES, OR THE
MANNER BY WHICH PAYMENTS WILL BE CALCULATED, BY SUBMITTING A REQUEST IN
WRITING OR BY SUBMITTING A REQUEST VIA ELECTRONIC MEANS; AND
(8) THAT THE PROVIDER WILL BE ABLE TO OBTAIN THE MOST CURRENT INFORMA-
TION MAINTAINED BY THE INSURER REGARDING THE ELIGIBILITY OF A PARTICULAR
PATIENT TO RECEIVE COVERED SERVICES. A VIOLATION OR FAILURE TO PERFORM
ANY OBLIGATION IMPOSED UNDER THIS SECTION SHALL RESULT IN A CIVIL PENAL-
TY NOT TO EXCEED ONE THOUSAND DOLLARS FOR EACH SUCH VIOLATION OR
FAILURE.
S 5. Subdivision 5-a of section 4406-c of the public health law, as
added by chapter 586 of the laws of 1998, is amended to read as follows:
5-a. Contracts entered into between a plan and a health care provider
shall include terms which prescribe:
(a) the method by which payments to a provider, including any prospec-
tive or retrospective adjustments thereto, shall be calculated;
(b) the time periods within which such calculations will be completed,
the dates upon which any such payments and adjustments shall be deter-
mined to be due, and the dates upon which any such payments and adjust-
ments will be made;
(c) a description of the records or information relied upon to calcu-
late any such payments and adjustments, and a description of how the
provider can access a summary of such calculations and adjustments;
(d) the process to be employed to [resolved] RESOLVE disputed incor-
rect or incomplete records or information and to adjust any such
payments and adjustments which have been calculated by relying on any
such incorrect or incomplete records or information and to adjust any
such payments and adjustments which have been calculated by relying on
any such incorrect or incomplete records or information so disputed;
provided, however, that nothing herein shall be deemed to authorize or
require the disclosure of personally identifiable patient information or
information related to other individual health care providers or the
plan's proprietary data collection systems, software or quality assur-
ance or utilization review methodologies; [and]
(e) the right of either party to the contract to seek resolution of a
dispute arising pursuant to the payment terms of such contract through a
proceeding under article seventy-five of the civil practice law and
rules;
(F) THAT THE PLAN WILL NOTIFY THE PROVIDER, ELECTRONICALLY AND IN
WRITING, AS SOON AS REASONABLY PRACTICABLE, OF SPECIFIC CHANGES TO THE
APPLICABLE PAYMENT SCHEDULE AND/OR SPECIFIC CHANGES TO THE MANNER BY
WHICH PAYMENTS WILL BE CALCULATED;
S. 311 6
(G) THAT THE PROVIDER CAN OBTAIN SPECIFIC INFORMATION FROM THE PLAN
REGARDING THE PAYMENT FOR A PARTICULAR SERVICE OR SERVICES, OR THE
MANNER BY WHICH PAYMENTS WILL BE CALCULATED, BY SUBMITTING A REQUEST IN
WRITING OR BY SUBMITTING A REQUEST VIA ELECTRONIC MEANS; AND
(H) THAT THE PROVIDER WILL BE ABLE TO OBTAIN THE MOST CURRENT INFORMA-
TION MAINTAINED BY THE PLAN REGARDING THE ELIGIBILITY OF A PARTICULAR
PATIENT TO RECEIVE COVERED SERVICES. A VIOLATION OR FAILURE TO PERFORM
ANY OBLIGATION IMPOSED UNDER THIS SECTION SHALL RESULT IN A CIVIL PENAL-
TY NOT TO EXCEED ONE THOUSAND DOLLARS FOR EACH SUCH VIOLATION OR
FAILURE.
S 6. This act shall take effect on the sixtieth day after it shall
have become a law.