S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                   315

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                               (PREFILED)

                             January 7, 2009
                               ___________

Introduced  by M. of A. MAGNARELLI, GALEF, JOHN, LUPARDO, MARKEY, ROBIN-
  SON -- Multi-Sponsored by -- M. of A. ALESSI, CHRISTENSEN,  ESPAILLAT,
  HOOPER,  McENENY, PHEFFER, WEISENBERG -- read once and referred to the
  Committee on Insurance

AN ACT to amend the insurance law, in relation to prompt  settlement  of
  claims for health care and payments for health care services

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Subsections (a), (b) and  (c)  of  section  3224-a  of  the
insurance  law,  as  amended  by  chapter  666  of the laws of 1997, are
amended to read as follows:
  (a) Except in a case where the obligation of an insurer or  an  organ-
ization  or corporation licensed or certified pursuant to article forty-
three of this chapter or article forty-four of the public health law  to
pay  a  claim  submitted  by a policyholder or person covered under such
policy or make a payment to a health care  provider  is  not  reasonably
clear,  or when there is a reasonable basis supported by specific infor-
mation available for review by the superintendent  that  such  claim  or
bill  for health care services rendered was submitted fraudulently, such
insurer or organization or corporation shall pay the claim to a  policy-
holder  or  covered  person  or make a payment to a health care provider
within [forty-five] THIRTY days of  receipt  of  a  claim  or  bill  for
services rendered.
  (b) In a case where the obligation of an insurer or an organization or
corporation  licensed  or  certified  pursuant to article forty-three of
this chapter or article forty-four of the public health  law  to  pay  a
claim or make a payment for health care services rendered is not reason-
ably  clear  due  to a good faith dispute regarding the eligibility of a
person for coverage, the liability of another insurer or corporation  or
organization  for all or part of the claim, the amount of the claim, the

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
              

                                                           LBD00539-01-9

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benefits covered under a contract or agreement, or the manner  in  which
services were accessed or provided, an insurer or organization or corpo-
ration  shall pay any undisputed portion of the claim in accordance with
this  subsection  and  notify the policyholder, covered person or health
care provider in writing within [thirty] FIFTEEN calendar  days  of  the
receipt of the claim:
  (1)  that  it  is  not  obligated to pay the claim or make the medical
payment, stating the specific reasons why it is not liable; or
  (2) to request all additional information needed to determine  liabil-
ity to pay the claim or make the health care payment AND TO RECEIVE SUCH
INFORMATION  IN  SUCH  A  MANNER  THAT  WILL  ACCOMMODATE THE ELECTRONIC
SUBMISSION AND TRACKING OF SUCH REQUESTED ADDITIONAL INFORMATION.
  Upon receipt of the information requested in  paragraph  two  of  this
subsection  or  an  appeal  of  a claim or bill for health care services
denied pursuant to paragraph one  of  this  subsection,  an  insurer  or
organization  or corporation licensed pursuant to article forty-three of
this chapter or article forty-four of the public health law shall comply
with subsection (a) of this section OR  IF  THE  CLAIM  IS  DENIED,  THE
PROVIDER SHALL COMPLY WITH PARAGRAPH THREE OF THIS SUBSECTION.
  (3) IN CASES WHERE A PROVIDER HAS SUBMITTED ADDITIONAL INFORMATION AND
THE  INSURER,  AFTER  RECEIVING  SUCH ADDITIONAL INFORMATION, DETERMINES
THAT IT WILL DENY THE CLAIM, THE PROVIDER  SHALL  BE  NOTIFIED  OF  SUCH
DENIAL IN WRITING WITHIN FIFTEEN CALENDAR DAYS OF SUCH DENIAL.
  (c) Each claim or bill for health care services processed in violation
of  this  section  shall constitute a separate violation. In addition to
the penalties provided IN ARTICLE TWENTY-FOUR OF THIS CHAPTER AND  ELSE-
WHERE  in  this chapter, any insurer or organization or corporation that
fails to adhere to the standards contained  in  this  section  shall  be
obligated  to  pay  to the health care provider or person submitting the
claim, in full settlement of the claim or bill for health care services,
the amount of the claim or health care  payment  plus  interest  on  the
amount  of  such claim or health care payment of the greater of the rate
equal to the rate set by the commissioner of taxation  and  finance  for
corporate  taxes  pursuant to paragraph one of subsection (e) of section
one thousand ninety-six of the tax law or twelve percent per  annum,  to
be  computed from the date the claim or health care payment was required
to be made. When the amount of interest due on  such  a  claim  is  less
[then]  THAN  two  dollars,  and  insurer or organization or corporation
shall not be required to pay interest on such claim.
  S 2. Section 3224-a of the insurance law is amended by adding two  new
subsections (g) and (h) to read as follows:
  (G)  IN  ADDITION TO THE PROVISIONS OF SUBSECTION (C) OF THIS SECTION,
ANY POLICYHOLDER OR HEALTH CARE PROVIDER MAY COMMENCE  AN  ACTION  IN  A
COURT  OF  COMPETENT  JURISDICTION  ON  HIS OR HER OWN BEHALF AGAINST AN
INSURER FOR FAILURE TO  COMPLY  WITH  ANY  OF  THE  PROVISIONS  OF  THIS
SUBSECTION.  SUCH  ACTION  SHALL  BE  BROUGHT IN THE COUNTY IN WHICH THE
ALLEGED VIOLATION OCCURRED OR WHERE THE COMPLAINANT RESIDES.  THE  COURT
MAY  IMPOSE  THE  CIVIL  PENALTY  PROVIDED FOR IN SUBSECTION (C) OF THIS
SECTION AND/OR THE PENALTY PROVIDED FOR IN SUBSECTION (A) OF SECTION TWO
THOUSAND FOUR HUNDRED SIX OF THIS CHAPTER. ANY FINAL ORDER ISSUED PURSU-
ANT TO THIS SUBSECTION MAY AWARD COSTS OF LITIGATION, INCLUDING  REASON-
ABLE  ATTORNEYS'  FEES, TO THE PREVAILING PARTY WHENEVER THE COURT DEEMS
SUCH AWARD IS APPROPRIATE.  IN  ANY  ACTION  BROUGHT  PURSUANT  TO  THIS
SUBSECTION, THE SUPERINTENDENT MAY INTERVENE AS A MATTER OF RIGHT.
  (H)  EVERY  SIX  MONTHS,  INSURERS  SHALL PREPARE A LIST OF CLAIMS FOR
WHICH THEY WILL ALWAYS REQUEST OPERATIVE NOTES AND/OR  DOCUMENTATION  OF

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MEDICAL  NECESSITY AND SHALL MAKE SUCH LIST AVAILABLE TO ALL PARTICIPAT-
ING PROVIDERS. INSURERS SHALL ACCOMMODATE THE ELECTRONIC SUBMISSION  AND
TRACKING  OF SUCH OPERATIVE NOTES AND/OR DOCUMENTATION OF MEDICAL NECES-
SITY AT THE TIME OF SUBMISSION OF THE INITIAL CLAIM.
  S  3.  Subsection (a) of section 2406 of the insurance law, as amended
by chapter 666 of the laws of 1997, is amended to read as follows:
  (a) If the hearing was on a charge of a defined violation  the  super-
intendent  shall  make  an  order  on his report and serve a copy of the
findings and order upon the person charged with the  violation  and  any
intervenor.  If  the  superintendent finds that the person complained of
has engaged in a defined violation, the order shall require  the  person
to  cease  and desist from engaging in such defined violation.  Further-
more, if the superintendent finds, after notice and  hearing,  that  the
person  complained  of has engaged in an act prohibited by section three
thousand two hundred twenty-four-a of this chapter,  the  superintendent
is  authorized  to levy a civil penalty against such person in an amount
up to five hundred dollars per day for each day beyond the date  that  a
bill or claim was to be processed in accordance with section three thou-
sand  two  hundred  twenty-four-a of this chapter, but in no event shall
such penalty exceed five thousand dollars; AND FURTHERMORE,  THE  SUPER-
INTENDENT  MAY REVOKE ANY LICENSE ISSUED TO AN INSURER LICENSED PURSUANT
TO THIS CHAPTER IF, AFTER NOTICE AND HEARING, HE OR SHE FINDS THAT  SUCH
INSURER HAS FAILED TO COMPLY WITH ANY REQUIREMENT IMPOSED UPON IT BY THE
PROVISIONS  OF  THIS  SECTION MORE THAN SIX TIMES WITHIN A CALENDAR YEAR
AND IF IN HIS OR HER JUDGMENT SUCH REVOCATION IS REASONABLY NECESSARY TO
PROTECT THE INTERESTS OF THE PEOPLE OF THIS  STATE.  THE  SUPERINTENDENT
MAY  IN  HIS  OR  HER DISCRETION REINSTATE ANY SUCH LICENSE IF HE OR SHE
FINDS THAT A GROUND FOR SUCH REVOCATION NO LONGER EXISTS.
  S 4. Section 3217-a of the insurance law is amended by  adding  a  new
subsection (f) to read as follows:
  (F)  NOTWITHSTANDING  ANY  CONTRARY  PROVISION OF LAW, ANY EMPLOYER IN
THIS STATE PROVIDING A SELF-INSURED EMPLOYEE WELFARE  BENEFIT  PLAN,  AS
DEFINED  IN  THE  EMPLOYEE  RETIREMENT  INCOME  SECURITY ACT OF 1974, AS
AMENDED, SHALL PROVIDE INSUREDS  WITH  IDENTIFICATION  CARDS  INDICATING
THAT SUCH INSURED'S PLAN IS A SELF-INSURED PLAN AND SHALL INFORM PROVID-
ERS ON REQUEST THAT SUCH INSURED'S PLAN IS A SELF-INSURED PLAN.
  S 5. This act shall take effect on the one hundred eightieth day after
it shall have become a law; provided, however, that effective immediate-
ly,  the  addition,  amendment  and/or  repeal of any rule or regulation
necessary for the implementation of this act on its effective  date  are
authorized  and  directed  to  be  made  and completed on or before such
effective date.