S T A T E   O F   N E W   Y O R K
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                                   332

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 7, 2009
                               ___________

Introduced  by  Sens.  BRESLIN,  ADAMS,  DILAN, DUANE, HASSELL-THOMPSON,
  KLEIN, KRUEGER, KRUGER, MONTGOMERY, ONORATO, PARKER, SAMPSON,  SAVINO,
  SCHNEIDERMAN,  SMITH,  STAVISKY -- read twice and ordered printed, and
  when printed to be committed to the Committee on Insurance

AN ACT to amend the insurance law, the public health law and the  social
  services  law,  in  relation  to prompt payment of health care claims,
  dispute resolution relating to conflicts between a third  party  payor
  and  a  health  care  provider; and to amend the insurance law and the
  state finance law, in relation to creating the health insurance  guar-
  anty fund

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

  Section 1.  Section 2601 of the insurance law, paragraphs 4 and  5  of
subsection  (a)  as amended by chapter 547 of the laws of 1997 and para-
graph 6 of subsection (a) as amended by chapter 388 of the laws of 2008,
is amended to read as follows:
  S 2601. Unfair claim settlement practices; penalties. (a) No  insurer,
CORPORATION,  OR ORGANIZATION LICENSED, ORGANIZED, OR CERTIFIED PURSUANT
TO THIS CHAPTER OR ARTICLE FORTY-FOUR OF THE PUBLIC HEALTH LAW AND doing
business in this state shall engage in  unfair  claim  settlement  prac-
tices.  Any  of  the  following  acts  by [an insurer] SUCH ENTITIES, if
committed without just cause and performed with  such  frequency  as  to
indicate  a  general  business  practice,  shall constitute unfair claim
settlement practices:
  (1) knowingly misrepresenting to claimants pertinent facts  or  policy
provisions relating to coverages at issue;
  (2) failing to acknowledge with reasonable promptness pertinent commu-
nications as to claims arising under its policies;
  (3) failing to adopt and implement reasonable standards for the prompt
investigation of claims arising under its policies;

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

                                                           LBD03519-01-9

S. 332                              2

  (4)  not attempting in good faith to effectuate prompt, fair and equi-
table settlements of claims submitted  in  which  liability  has  become
reasonably  clear, except where there is a reasonable basis supported by
specific information available for review by  the  department  that  the
claimant  has caused the loss to occur by arson. After receiving a prop-
erly executed proof of loss, the insurer shall advise  the  claimant  of
acceptance or denial of the claim within thirty working days;
  (5) compelling policyholders to institute suits to recover amounts due
under its policies by offering substantially less than the amounts ulti-
mately recovered in suits brought by them; [or]
  (6)  failing  to promptly disclose coverage pursuant to subsection (d)
or subparagraph (A) of paragraph two of subsection (f) of section  three
thousand four hundred twenty of this chapter;
  (7)  FAILING TO COMPLY WITH SECTION THREE THOUSAND TWO HUNDRED TWENTY-
FOUR-A OF THIS CHAPTER;
  (8) FAILING TO ABIDE BY THE TERMS OF A CONTRACT  WITH  A  HEALTH  CARE
PROVIDER,  INCLUDING FAILURE TO MAKE PAYMENT AT THE CONTRACTED RATES, OR
STATE OR FEDERAL LAWS OR REGULATIONS;
  (9) REQUESTING MEDICAL RECORDS FROM HEALTH CARE PROVIDERS TO  EVALUATE
CLAIMS AT A RATE OR WITH SUCH FREQUENCY WHICH, UPON INVESTIGATION BY THE
SUPERINTENDENT, IS FOUND NOT TO BE JUSTIFIED; OR
  (10)  DENYING  PAYMENT  TO HEALTH CARE PROVIDERS, IN WHOLE OR IN PART,
WHEN, UPON INVESTIGATION BY THE  SUPERINTENDENT,  MORE  THAN  FIFTY  PER
CENTUM  OF THE CLAIMS DENIALS ARE OVERTURNED ON APPEAL PURSUANT TO ARTI-
CLE FORTY-NINE OF THE PUBLIC HEALTH  LAW,  ARTICLE  FORTY-NINE  OF  THIS
CHAPTER  OR  SECTION  TWO  HUNDRED SIX OF THE PUBLIC HEALTH LAW, OR IN A
JUDICIAL PROCEEDING OR ARBITRATION.
  (b) Evidence as to numbers and types of complaints to  the  department
against  [an insurer] SUCH ENTITIES and as to the department's complaint
experience with other  [insurers]  ENTITIES  writing  similar  lines  of
insurance shall be admissible in evidence in any administrative or judi-
cial  proceeding  under  this section or article twenty-four or seventy-
four of this chapter, but, EXCEPT FOR PARAGRAPHS SEVEN, EIGHT, NINE  AND
TEN  OF  SUBSECTION  (A)  OF  THIS SECTION, no [insurer] ENTITY shall be
deemed in violation of this section solely by reason of the numbers  and
types of such complaints.
  (c)  (1)  If it is found, after notice and an opportunity to be heard,
that an insurer has violated this section, each instance  of  noncompli-
ance  with  subsection  (a) [hereof] OF THIS SECTION may be treated as a
separate violation of this section for purposes of ordering  a  monetary
penalty  pursuant  to subsection (b) of section one hundred nine of this
chapter. A violation of this section shall not be a misdemeanor.
  (2) IF IT IS FOUND, AFTER NOTICE AND AN OPPORTUNITY TO BE HEARD,  THAT
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 IS IN VIOLATION OF PARAGRAPHS SEVEN,  EIGHT,  NINE
OR  TEN  OF  SUBSECTION (A) OF THIS SECTION WITH RESPECT TO A PARTICULAR
HEALTH CARE PROVIDER, THE  SUPERINTENDENT  SHALL  REQUIRE  THE  INSURER,
ORGANIZATION, OR CORPORATION TO ESTABLISH AN INTERIM PAYMENT SYSTEM THAT
MAKES PAYMENT TO THE AFFECTED PROVIDER FOR HEALTH CARE SERVICES.
  (A)  SUCH  INTERIM  PAYMENT  SYSTEM  SHALL  CONSIST OF UNIFORM PAYMENT
AMOUNTS MADE ON A WEEKLY BASIS TO THE PROVIDER OF SERVICES BASED ON  THE
MOST RECENTLY AVAILABLE INFORMATION ON THE ACTUAL AVERAGE WEEKLY PAYMENT
AMOUNTS TO THE HEALTH CARE PROVIDER, CALCULATED OVER A SIX MONTH PERIOD,
INCREASED  BY  AN  APPROPRIATE  TREND  FACTOR.  PAYMENT AMOUNTS SHALL BE
RETROACTIVELY ADJUSTED TO REFLECT ACTUAL  AMOUNTS  OWED  PURSUANT  TO  A

S. 332                              3

CLAIM  RECONCILIATION PROCESS. RETROSPECTIVE ADJUSTMENTS FOR OVERPAYMENT
TO PROVIDERS SHALL BE MADE OVER THE SAME  NUMBER  OF  PAYMENTS  AS  WERE
UTILIZED  IN  THE  RECONCILIATION CALCULATION. RETROSPECTIVE ADJUSTMENTS
FOR UNDERPAYMENT TO PROVIDERS SHALL BE MADE IN THE NEXT PAYMENT.
  (B)  THE  SUPERINTENDENT  SHALL REQUIRE AN INTERIM PAYMENT SYSTEM ONLY
FOR AN ENTITY LICENSED OR CERTIFIED PURSUANT  TO  ARTICLE  TWENTY-EIGHT,
THIRTY-SIX OR FORTY OF THE PUBLIC HEALTH LAW, A FACILITY LICENSED PURSU-
ANT  TO  ARTICLE  NINETEEN  OR  THIRTY-ONE  OF THE MENTAL HYGIENE LAW, A
DISPENSER OR PROVIDER OF PHARMACEUTICAL PRODUCTS,  SERVICES  OR  DURABLE
MEDICAL  EQUIPMENT  OR  AN  INDEPENDENT  PRACTICE  ASSOCIATION  WHICH IS
AUTHORIZED TO FURNISH HEALTH CARE SERVICES  UNDER  A  CONTRACT  WITH  AN
INSURER,  CORPORATION OR ORGANIZATION.  THE INTERIM PAYMENT SYSTEM SHALL
BE MAINTAINED FOR SUCH TIME AS SPECIFIED BY THE  SUPERINTENDENT  AND  AT
LEAST  UNTIL  SUCH  TIME  THAT THE INSURER, ORGANIZATION, OR CORPORATION
DEMONSTRATES TO THE SATISFACTION OF THE SUPERINTENDENT THAT  IT  HAS  IN
PLACE  SYSTEMS  THAT  WILL  ENSURE  THAT  IT NO LONGER WILL CONSISTENTLY
VIOLATE THE PROVISIONS  OF THIS SECTION OR THE TERMS OF A CONTRACT  WITH
A HEALTH CARE PROVIDER RELATED TO PAYMENT AND MEDICAL REVIEW.
  S 2. Section 3224-a of the insurance law, as amended by chapter 666 of
the laws of 1997, is amended to read as follows:
  S  3224-a.  Standards  for  prompt,  fair  and equitable settlement of
claims for health care and payments for health  care  services.  In  the
processing of all health care claims submitted under contracts or agree-
ments  issued or entered into pursuant to articles thirty-two, forty-two
and forty-three of this chapter and article  forty-four  of  the  public
health  law  and  all  bills for health care services rendered by health
care providers pursuant to such contracts or agreements, any insurer  or
organization  or  corporation  licensed or certified pursuant to article
forty-three of this chapter or article forty-four of the  public  health
law shall adhere to the following standards:
  (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 days of receipt of  a  claim  or  bill  for  services
rendered.]:
  (1)  FIFTEEN  BUSINESS DAYS OF RECEIPT OF A CLAIM OR BILL FOR SERVICES
RENDERED WHICH IS TRANSMITTED ELECTRONICALLY WITHIN THIRTY DAYS  OF  THE
DATE  THE  SERVICES WERE RENDERED, OR IN THE CASE OF INPATIENT CARE, THE
DATE OF  DISCHARGE,  IN  THE  CORRECT  AMOUNT  PROVIDED  FOR  UNDER  THE
CONTRACT, IF A CONTRACT APPLIES; OR
  (2)  THIRTY  DAYS  OF RECEIPT OF A CLAIM OR BILL FOR SERVICES RENDERED
WHICH IS SUBMITTED IN WRITING OR AN ELECTRONIC TRANSMISSION  WHICH  DOES
NOT COMPLY WITH PARAGRAPH ONE OF THIS SUBSECTION.
  (b)   (1) In a case where the obligation of an insurer or an organiza-
tion 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
reasonably  clear  due to a good faith dispute regarding the eligibility
of a person for coverage, the liability of  another  insurer  or  corpo-

S. 332                              4

ration  or  organization for all or part of the claim, the amount of the
claim, the benefits covered under a contract or agreement, or the manner
in which services were accessed or provided, an insurer or  organization
or  corporation shall pay any undisputed portion of the claim in accord-
ance with this subsection and notify the  policyholder,  covered  person
[or]  AND health care provider in writing within thirty calendar days of
the receipt of the claim:
  [(1)] (A) that it is not obligated  to  pay  the  claim  or  make  the
medical  payment,  IN WHOLE OR IN PART, stating the specific reasons why
it is not liable; or
  [(2)] (B) to request all additional information  needed  to  determine
liability  to pay the claim or make the health care payment, IN WHOLE OR
IN PART, AND
  (C) THE AMOUNT THAT IS TO BE PAID BY THE INSURER  OR  ORGANIZATION  OR
CORPORATION  LICENSED  OR  CERTIFIED  PURSUANT TO ARTICLE FORTY-THREE OF
THIS CHAPTER OR ARTICLE FORTY-FOUR OF THE  PUBLIC  HEALTH  LAW  AND  THE
AMOUNTS  FOR  WHICH  PAYMENT IS DENIED OR IN DISPUTE, SHOWING THE CALCU-
LATIONS FOR PAYMENT, BY SERVICE PROVIDED, INCLUDING CO-PAYMENTS, DEDUCT-
IBLES, SURCHARGES AND FEE-SCHEDULES.
  (2) Upon receipt of  the  information  requested  in  [paragraph  two]
SUBPARAGRAPH  (B)  OF PARAGRAPH ONE of this subsection or an appeal of a
claim or bill for health care services denied pursuant  to  SUBPARAGRAPH
(A)  OF  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] MAKE PAYMENT OR NOTIFY THE POLICYHOLDER,
COVERED PERSON AND HEALTH CARE PROVIDER OF A FINAL DETERMINATION TO DENY
PAYMENT STATING THE SPECIFIC REASONS WHY IT IS NOT LIABLE WITHIN FIFTEEN
CALENDAR DAYS OF THE RECEIPT OF THE INFORMATION REQUESTED.
  (c) [Each] AT LEAST ANNUALLY, THE  SUPERINTENDENT  SHALL  COLLECT  AND
PUBLISH  THE  POSTAL  AND  ELECTRONIC  ADDRESSES TO WHICH POLICYHOLDERS,
COVERED PERSONS AND HEALTH CARE PROVIDERS MAY SUBMIT CLAIMS,  ADDITIONAL
INFORMATION  AND  APPEALS TO EACH INSURER, CORPORATION AND ORGANIZATION.
THIS INFORMATION SHALL INCLUDE ADDRESSES FOR ANY ELECTRONIC TRANSACTIONS
VENDOR OR ANY SUBCONTRACTORS THAT PROCESS CLAIMS ON BEHALF OF THE INSUR-
ER, CORPORATION, OR  ORGANIZATION  AND  INSTRUCTIONS  ON  WHICH  CLAIMS,
INFORMATION OR APPEALS SHOULD BE SUBMITTED TO WHICH ADDRESS.
  (D)  (1)  UNLESS OTHERWISE AGREED TO IN A CONTRACT BETWEEN AN INSURER,
CORPORATION OR ORGANIZATION AND A  HEALTH  CARE  PROVIDER,  AN  INSURER,
CORPORATION  OR  ORGANIZATION  SHALL ALLOW A HEALTH CARE PROVIDER DESIG-
NATED IN SUBPARAGRAPH (B) OF PARAGRAPH TWO OF SUBSECTION (C) OF  SECTION
TWO THOUSAND SIX HUNDRED ONE OF THIS CHAPTER AT LEAST ONE HUNDRED TWENTY
DAYS,  AND ANY OTHER HEALTH CARE PROVIDER AT LEAST SIX MONTHS, TO SUBMIT
A CLAIM AFTER THE PROVIDER  LEARNS  THAT  THE  INSURER,  CORPORATION  OR
ORGANIZATION HAD, AT THE TIME SERVICES WERE DELIVERED, A CONTRACT AND AN
OBLIGATION  TO  REIMBURSE  THE  CLAIMS  FOR  HEALTH  SERVICES  THAT WERE
RECEIVED BY A POLICYHOLDER OR COVERED PERSON OR AFTER THE  PROVIDER  HAS
RECEIVED  A DENIAL, IN WHOLE OR IN PART, FROM ANOTHER ENTITY BELIEVED TO
HAVE AN OBLIGATION TO PAY CLAIMS FOR HEALTH  SERVICES  RECEIVED  BY  THE
POLICYHOLDER  OR COVERED PERSON. AN INSURER, CORPORATION OR ORGANIZATION
SHALL ALLOW A POLICYHOLDER OR COVERED PERSON  AT  LEAST  SIX  MONTHS  TO
SUBMIT  A  CLAIM  AFTER  A HEALTH CARE SERVICE WAS PROVIDED OR AFTER THE
POLICYHOLDER OR COVERED PERSON RECEIVED A  DENIAL  FROM  ANOTHER  ENTITY
THAT PROVIDES HEALTH BENEFITS TO HIM OR HER.
  (2) AN INSURER, CORPORATION OR ORGANIZATION SHALL ALLOW POLICYHOLDERS,
COVERED PERSONS, AND HEALTH CARE PROVIDERS AT LEAST THIRTY CALENDAR DAYS

S. 332                              5

TO  SUBMIT  ANY ADDITIONAL INFORMATION IT REQUESTED PURSUANT TO SUBPARA-
GRAPH (B) OF PARAGRAPH ONE OF SUBSECTION (B) OF THIS SECTION OR THAT  IT
REQUESTED  TO  RESPOND  TO  AN  APPEAL  FILED BY A POLICYHOLDER, COVERED
PERSON, OR HEALTH CARE PROVIDER PURSUANT TO THIS SUBSECTION.
  (3)  PURSUANT TO THIS SUBSECTION, AN INSURER, CORPORATION OR ORGANIZA-
TION SHALL ALLOW A POLICYHOLDER, COVERED PERSON OR HEALTH CARE  PROVIDER
AT LEAST FORTY-FIVE DAYS TO APPEAL, AFTER RECEIPT OF A DENIAL OF A CLAIM
OR  A  BILL  PURSUANT TO SUBPARAGRAPH (A) OF PARAGRAPH ONE OF SUBSECTION
(B) OF THIS SECTION.
  (4) THE DATE OF RECEIPT OF A CLAIM OR ADDITIONAL INFORMATION SHALL BE,
WITH RESPECT TO CLAIMS OR INFORMATION DELIVERED  BY  THE  UNITED  STATES
POSTAL  SERVICE  OR  OTHER DELIVERY SERVICE, THE DATE OF DELIVERY AT THE
SITE SPECIFIED BY THE INSURER,  CORPORATION  OR  ORGANIZATION  WITH  THE
SUPERINTENDENT  PURSUANT TO SUBSECTION (C) OF THIS SECTION; OR SHALL BE,
WITH RESPECT TO CLAIMS OR INFORMATION DELIVERED ELECTRONICALLY, THE DATE
OF ELECTRONIC ACKNOWLEDGMENT FROM THE INSURER, CORPORATION OR  ORGANIZA-
TION  OR  ITS  ELECTRONIC TRANSACTIONS VENDOR.  AN INSURER, CORPORATION,
ORGANIZATION OR ANY AGENT ACTING ON BEHALF OF SUCH  ENTITY  WHO  ACCEPTS
AND RECEIVES CLAIMS IN ELECTRONIC FORMAT SHALL, WITHIN FORTY-EIGHT HOURS
AFTER  THE  RECEIPT OF SUCH A CLAIM, TRANSMIT ELECTRONICALLY AN ACKNOWL-
EDGMENT OF THE RECEIPT OF SUCH A CLAIM TO THE HEALTH  CARE  PROVIDER  OR
ENTITY WHICH SUBMITTED THE CLAIM.
  (5) NO INSURER, CORPORATION OR ORGANIZATION SHALL SEEK TO RECOVER FROM
A HEALTH CARE PROVIDER, OR REDUCE PAYMENT TO A HEALTH CARE PROVIDER, ANY
PORTION OF A PAYMENT BEYOND THE DATE WHICH IS ONE YEAR AFTER THE DATE OF
PAYMENT,  EXCEPT  WHEN THERE IS A REASONABLE BASIS SUPPORTED BY SPECIFIC
INFORMATION AVAILABLE FOR REVIEW BY THE SUPERINTENDENT THAT SUCH PAYMENT
WAS OBTAINED FRAUDULENTLY.
  (E)(1) EXCEPT AS PROVIDED IN PARAGRAPH FOUR OF THIS  SUBSECTION,  EACH
claim  or  bill  for health care services processed in violation of this
section shall constitute a separate violation. In addition to the penal-
ties provided in this chapter, any insurer  or  organization  or  corpo-
ration  that  fails to adhere to the standards contained in this section
shall be obligated to pay to the health care provider or person  submit-
ting  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] AN insurer or organization or corpo-
ration shall not be required to pay interest on such claim.
  [(d)]  (2) EXCEPT AS PROVIDED IN PARAGRAPH FOUR OF THIS SUBSECTION, IN
A CASE WHERE AN INSURER, ORGANIZATION OR CORPORATION FAILS  TO  PAY  THE
INTEREST  AMOUNT  SPECIFIED  IN  THIS  SUBSECTION WITH THE AMOUNT OF THE
CLAIM OR HEALTH CARE PAYMENT, THE SUPERINTENDENT SHALL IMPOSE THE  MAXI-
MUM PENALTY PROVIDED IN THIS CHAPTER.
  (3)   PURSUANT  TO  PARAGRAPH  (G)  OF  SUBDIVISION  FOUR  OF  SECTION
TWENTY-EIGHT HUNDRED SEVEN-E OF THE PUBLIC HEALTH LAW, FOR EACH CLAIM OR
BILL FOR HEALTH CARE SERVICES FOR  WHICH  AN  INSURER,  ORGANIZATION  OR
CORPORATION  CANNOT  ACCEPT  ELECTRONIC  TRANSMISSION FROM A HEALTH CARE
PROVIDER, THE INSURER, ORGANIZATION OR CORPORATION SHALL BE OBLIGATED TO
PAY AN ADDITIONAL AMOUNT OF INTEREST EQUAL TO TWO PERCENT OF THE  AMOUNT
OF THE CLAIM.

S. 332                              6

  (4) IF, AFTER INVESTIGATION, THE SUPERINTENDENT FINDS THAT AN INSURER,
ORGANIZATION,  OR  CORPORATION  HAS PROCESSED NINETY-EIGHT PER CENTUM OF
CLAIMS RECEIVED IN A GIVEN TIME PERIOD IN COMPLIANCE WITH THIS  SECTION,
THEN  ANY REMAINING CLAIMS NOT PROCESSED IN COMPLIANCE WITH THIS SECTION
BUT  WHICH WERE PAID WITHIN SIXTY DAYS OF SUBMISSION AND WITH THE APPRO-
PRIATE INTEREST PAYMENT FOR LATE CLAIMS SHALL NOT CONSTITUTE  VIOLATIONS
OF  THIS  SECTION,  SO  LONG AS SUCH CLAIMS OWED TO AN INDIVIDUAL HEALTH
CARE PROVIDER, IN THE AGGREGATE, DO  NOT  EXCEED  FIVE  PERCENT  OF  THE
ACCOUNTS RECEIVABLE OWED BY THAT INSURER, ORGANIZATION OR CORPORATION TO
THAT HEALTH CARE PROVIDER FOR SUCH PERIOD.
  (F) For the purposes of this section:
  (1)  "policyholder" shall mean a person covered under such policy or a
representative designated by such person; and
  (2) "health care provider" shall mean an entity licensed or  certified
pursuant  to  article  twenty-eight,  thirty-six  or forty of the public
health law, a facility licensed pursuant  to  article  nineteen,  FORMER
ARTICLE  twenty-three or ARTICLE thirty-one of the mental hygiene law, a
health care professional licensed, registered or certified  pursuant  to
title  eight of the education law, a dispenser or provider of pharmaceu-
tical products, services or durable medical equipment,  or  a  represen-
tative designated by such entity or person.
  [(e)]  (G)  IN A CASE WHERE (A) MORE THAN FIVE PERCENT OF THE ACCOUNTS
RECEIVABLE BALANCE DUE TO A HEALTH CARE PROVIDER FROM AN INSURER, ORGAN-
IZATION OR CORPORATION IS WITHHELD BECAUSE THE OBLIGATION TO PAY IS  NOT
REASONABLY  CLEAR  PURSUANT TO SUBSECTION (B) OF THIS SECTION, OR (B) AN
INSURER,  ORGANIZATION  OR  CORPORATION  REQUESTS  A  PATIENT'S  MEDICAL
RECORDS  PURSUANT TO PARAGRAPH TWO OF SUBSECTION (B) OF THIS SECTION FOR
MORE THAN FIVE PERCENT OF CLAIMS SUBMITTED BY A  HEALTH  CARE  PROVIDER,
THERE  SHALL BE A PRESUMPTION THAT PAYMENT HAS NOT BEEN WITHHELD BECAUSE
OF A GOOD FAITH DISPUTE AND THE  SUPERINTENDENT  SHALL  INVESTIGATE  THE
PAYMENT  PRACTICES OF THE INSURER, ORGANIZATION OR CORPORATION. IN ADDI-
TION, THE SUPERINTENDENT SHALL INVESTIGATE THE PAYMENT PRACTICES OF  THE
INSURER, ORGANIZATION OR CORPORATION IN ANY INSTANCE WHERE HE OR SHE HAS
REASON  TO BELIEVE THAT THE INSURER, ORGANIZATION OR CORPORATION HAS NOT
COMPLIED WITH THE PROVISIONS OF THIS SECTION.   IN  DETERMINING  WHETHER
MORE  THAN  FIVE  PERCENT  OF  THE  ACCOUNTS RECEIVABLE BALANCE DUE TO A
HEALTH CARE PROVIDER FROM AN INSURER,  ORGANIZATION  OR  CORPORATION  IS
WITHHELD  OR  WHETHER  MEDICAL  RECORDS ARE REQUESTED FOR MORE THAN FIVE
PERCENT OF THE CLAIMS SUBMITTED BY A HEALTH CARE  PROVIDER,  THE  SUPER-
INTENDENT  SHALL  DISREGARD  CLAIMS  FOR REIMBURSEMENT OF EMERGENCY CARE
RENDERED BY A HEALTH CARE PROVIDER THAT  DOES  NOT  PARTICIPATE  IN  THE
NETWORK OF THE INSURER, ORGANIZATION OR CORPORATION RECEIVING THE CLAIM.
  (H)  Nothing  in this section shall in any way be deemed to impair any
right available to the state to adjust the timing of  its  payments  for
medical  assistance  pursuant  to  title  eleven  of article five of the
social services law, or for child health insurance plan benefits  pursu-
ant  to  title [one-a] ONE-A of article twenty-five of the public health
law or otherwise be deemed to require  adjustment  of  payments  by  the
state for such medical assistance or child health insurance.
  [(f)] (I) In any action brought by the superintendent pursuant to this
section  or article twenty-four of this chapter relating to this section
regarding payments for medical assistance pursuant to  title  eleven  of
article  five  of  the  social services law, child health insurance plan
benefits pursuant to title [one-a] ONE-A of article twenty-five  of  the
public health law, benefits under the voucher insurance program pursuant
to  section  one  thousand  one  hundred twenty-one of this chapter, and

S. 332                              7

benefits under the New York state small business health insurance  part-
nership  program pursuant to article nine-A of the public health law, it
shall be a mitigating factor that the insurer, corporation or  organiza-
tion  is owed any premium amounts, premium adjustments, stop-loss recov-
eries or other payments from the state or one  of  its  fiscal  interme-
diaries under any such program.
  S  3.  Section 206 of the public health law is amended by adding a new
subdivision 26 to read as follows:
  26. (A) THE COMMISSIONER, IN CONSULTATION WITH THE  SUPERINTENDENT  OF
INSURANCE, SHALL ADOPT RULES AND REGULATIONS ESTABLISHING AN ALTERNATIVE
DISPUTE RESOLUTION SYSTEM TO MAKE DETERMINATIONS REGARDING DISAGREEMENTS
BETWEEN HEALTH CARE PROVIDERS AND THIRD PARTY PAYERS CONCERNING PAYMENTS
RELATED  TO  HEALTH CARE SERVICES RENDERED BY HEALTH CARE PROVIDERS, AND
SHALL ADOPT SUCH RULES AND  REGULATIONS  AS  ARE  NECESSARY  TO  PROMOTE
UNIFORMITY  IN  THE  INTERPRETATION OF APPLICABLE LAWS, REGULATIONS, AND
CONTRACTUAL PROVISIONS.
  (B) DEFINITIONS.  A  "HEALTH  CARE  PROVIDER"  SHALL  MEAN  AN  ENTITY
LICENSED  OR  CERTIFIED  PURSUANT TO THIS ARTICLE, ARTICLE THIRTY-SIX OR
FORTY OF THIS CHAPTER, A FACILITY LICENSED PURSUANT TO ARTICLE NINETEEN,
FORMER ARTICLE TWENTY-THREE OR ARTICLE THIRTY-ONE OF THE MENTAL  HYGIENE
LAW,  OR  A  HEALTH  CARE PROFESSIONAL LICENSED, REGISTERED OR CERTIFIED
PURSUANT TO TITLE EIGHT OF THE EDUCATION LAW, OR A REPRESENTATIVE DESIG-
NATED BY SUCH ENTITY OR PERSON. A "THIRD PARTY PAYER" SHALL  INCLUDE  AN
ENTITY  DEFINED  IN  SUBDIVISION  ONE-A  OF SECTION TWENTY-EIGHT HUNDRED
SEVEN-J OF THIS CHAPTER, WITH THE EXCEPTION  OF  GOVERNMENTAL  AGENCIES,
BUT  SHALL  INCLUDE  THIRD PARTY PAYERS THAT ENROLL PERSONS ELIGIBLE FOR
MEDICAL ASSISTANCE PURSUANT TO SECTION THREE HUNDRED SIXTY-FOUR-J OF THE
SOCIAL SERVICES LAW, OR A REPRESENTATIVE DESIGNATED BY SUCH ENTITY.
  (C) ADMINISTRATION  OF  ALTERNATIVE  DISPUTE  RESOLUTION  SYSTEM.  THE
COMMISSIONER  SHALL SELECT AND APPROVE STATEWIDE OR REGIONAL ALTERNATIVE
DISPUTE RESOLUTION AGENTS TO CONDUCT AND DETERMINE  ALTERNATIVE  DISPUTE
RESOLUTION  REVIEWS.  THE  COMMISSIONER SHALL ESTABLISH CRITERIA FOR THE
SELECTION OF SUCH AGENTS, INCLUDING BUT NOT LIMITED TO THE FOLLOWING:
  I. EMPLOYMENT OR CONTROL THROUGH OTHER ARRANGEMENTS  OF  A  SUFFICIENT
NUMBER  OF  PERSONNEL QUALIFIED TO REVIEW DISPUTES, INCLUDING SUFFICIENT
PHYSICIAN AND OTHER CLINICAL SPECIALISTS WHERE APPROPRIATE;
  II. DEMONSTRATION OF AN ABILITY TO REVIEW AND RENDER DECISIONS REGARD-
ING DISPUTES IN A TIMELY MANNER;
  III. ABILITY TO MAKE AVAILABLE FOR INSPECTION BY THE COMMISSIONER  AND
SUPERINTENDENT  OF  INSURANCE  RECORDS  AND  INFORMATION  RELATED TO ITS
REVIEW ACTIVITIES;
  IV. LACK OF CONFLICT OF INTEREST BASED ON PAYER, PROVIDER, OR  PROFES-
SIONAL  AFFILIATION, INCLUDING PROCEDURES TO ENSURE THAT CASES SUBMITTED
FOR REVIEW THAT HAVE BEEN PREVIOUSLY REVIEWED BY THE AGENT IN A SEPARATE
CAPACITY ARE IDENTIFIED FOR REASSIGNMENT TO OTHER AGENTS;
  V. FAMILIARITY WITH BILLING, CODING, AND CLAIMS PAYMENT  PRACTICES  OF
HEALTH CARE PAYERS AND PROVIDERS IN NEW YORK STATE;
  VI.  FAMILIARITY  WITH THE NATURE OF CONTRACTUAL RELATIONSHIPS BETWEEN
PAYERS AND PROVIDERS;
  VII. FAMILIARITY WITH RELEVANT PROVISIONS  OF  THIS  ARTICLE  AND  THE
INSURANCE  LAW AND RELATED RULES AND REGULATIONS CONCERNING THE DELIVERY
AND REVIEW OF, AND BILLING AND PAYMENT FOR, HEALTH CARE SERVICES;
  VIII. ABILITY TO ENSURE CONFIDENTIALITY OF PATIENT INFORMATION;
  IX. ABILITY TO PROMOTE UNIFORMITY IN THE INTERPRETATION OF  APPLICABLE
LAWS,  REGULATIONS, AND CONTRACTUAL PROVISIONS AS DEFINED BY THE COMMIS-
SIONER AND SUPERINTENDENT OF INSURANCE; AND

S. 332                              8

  X. ABILITY TO ESTABLISH POLICIES AND PROCEDURES AND TO CARRY  OUT  THE
PROVISIONS OF THIS SECTION.
  (D)  MINIMUM  AMOUNT  IN  DISPUTE. I. NO DISPUTE SHALL BE ACCEPTED FOR
REVIEW BY THE ALTERNATIVE DISPUTE RESOLUTION SYSTEM UNLESS  THE  CLAIMED
VALUE  OF  THE DISPUTED ITEM OR SERVICE IS FIVE HUNDRED DOLLARS OR MORE,
PROVIDED, HOWEVER, THAT A DISPUTED ITEM OR SERVICE MAY INCLUDE  MULTIPLE
ITEMS  WHOSE  AGGREGATE  VALUE  MEETS  THE  MINIMUM REQUIREMENT WHEN THE
DISPUTE IS ALLEGED TO ARISE FROM THE SAME PATTERN OR PRACTICE APPLIED TO
SUCH MULTIPLE ITEMS.
  II. EXCEPT FOR DISPUTES WHICH MAY BE  CONSIDERED  AND  RESOLVED  UNDER
TITLE  II  OF  ARTICLE FORTY-NINE OF THIS CHAPTER OR TITLE II OF ARTICLE
FORTY-NINE OF THE INSURANCE LAW AS IMPLEMENTED THROUGH  THE  SUPERINTEN-
DENT  OF  INSURANCE  OR  THE  COMMISSIONER'S ADMINISTRATIVE PRACTICES OR
THROUGH REGULATION, THE DISPUTE RESOLUTION SYSTEM  ESTABLISHED  BY  THIS
SUBDIVISION  SHALL  REVIEW  DISAGREEMENTS  RELATED  TO THE PROVISIONS OF
SECTION THREE THOUSAND TWO HUNDRED TWENTY-FOUR-A OF THE  INSURANCE  LAW;
THE  PROVISIONS  OF  STATE OR FEDERAL LAW OR REGULATION; THE PROCESS AND
PROCEDURES UTILIZED BY THIRD PARTY PAYERS FOR  THE  SUBMISSION,  REVIEW,
AND  APPEAL  OF  CLAIMS;  CONTRACTUAL  PROVISIONS RELATED TO PAYMENT AND
MEDICAL REVIEW; AND OTHER DISPUTES RELATED TO PAYMENT AMOUNTS AND  BILL-
ING  AND CLAIMS ADJUDICATION PRACTICES. DISPUTES SUBJECT TO REVIEW SHALL
INCLUDE, BUT NOT BE LIMITED TO:
  A. DISPUTES REGARDING PAYMENT RESULTING FROM THE REVIEW  OF  A  HEALTH
CARE  PROCEDURE,  SERVICE,  OR  SERVICES  CONDUCTED  PURSUANT TO ARTICLE
FORTY-NINE OF THIS CHAPTER OR ARTICLE FORTY-NINE OF THE  INSURANCE  LAW,
REGARDLESS OF WHEN THE REVIEW WAS BEGUN OR COMPLETED; PROVIDED, HOWEVER,
THAT  IF  THE PERSON RECEIVING THE HEALTH CARE PROCEDURE OR SERVICE THAT
GAVE RISE TO THE PAYMENT DISPUTE IS FINANCIALLY LIABLE FOR PART  OR  ALL
OF  THE  DISPUTED  PAYMENT,  SUCH PERSON HAS GIVEN HIS OR HER CONSENT IN
WRITING TO PERMIT THE PROVIDER OR PAYER TO  PURSUE  THE  DISPUTE,  WHICH
CONSENT  MAY BE PROVIDED IN ADVANCE OF THE PROVISION OF THE PROCEDURE OR
SERVICE AND WHICH SHALL BE INCLUDED IN THE MATERIALS  SUBMITTED  TO  THE
REVIEW AGENT IN SUPPORT OF THE REVIEW;
  B.  DISPUTES REGARDING PAYMENT RELATED TO THE PRIOR AUTHORIZATION OF A
SERVICE;
  C. DISPUTES REGARDING PROVISIONS OF STATE OR FEDERAL LAW OR REGULATION
RELATED TO THE APPROPRIATENESS, BILLING,  OR  PAYMENT  FOR  HEALTH  CARE
SERVICES BY THIRD PARTY PAYERS;
  D. DISPUTES RELATED TO CODING OR DETERMINATION OF DIAGNOSES;
  E.  DISPUTES RELATED TO PAYMENT ASSOCIATED WITH THE APPROPRIATENESS OF
THE LEVEL OR SETTING FOR THE DELIVERY OF THE HEALTH CARE SERVICE; AND
  F. DISPUTES  REGARDING  PAYMENT  RELATED  TO  THE  APPROPRIATENESS  OF
SERVICES RENDERED THROUGH THE EMERGENCY DEPARTMENT.
  (E)  TIMEFRAMES. THE ALTERNATIVE DISPUTE RESOLUTION AGENT SHALL REVIEW
AND RENDER A DECISION ON A DISPUTE WITHIN THIRTY DAYS OF THE RECEIPT  OF
ALL  REQUESTED  INFORMATION. THE DECISION WILL BE BASED UPON A REVIEW OF
THE MATERIALS SUBMITTED BY THE PARTIES AND  APPLICABLE  LAWS  AND  REGU-
LATIONS,  IF  ANY, AND SHALL BE IN WRITING. ANY PAYMENT DETERMINED TO BE
OWED BY A HEALTH CARE PROVIDER OR THIRD PARTY  PAYER  PURSUANT  TO  SUCH
DECISION SHALL BE MADE WITHIN THIRTY DAYS OF THE RECEIPT OF THE ALTERNA-
TIVE DISPUTE RESOLUTION AGENT'S DECISION.
  (F)  INTEREST.  WHENEVER  THE  AMOUNT OF PAYMENT MADE BY A THIRD PARTY
PAYER TO A HEALTH CARE PROVIDER  DIFFERS  FROM  THE  AMOUNT  OF  PAYMENT
DETERMINED IN ACCORDANCE WITH THIS SECTION, INTEREST SHALL BE DUE ON ANY
EXCESS  OWED TO THE HEALTH CARE PROVIDER OR THE THIRD PARTY PAYER AT THE
GREATER OF THE RATE EQUAL TO THE RATE SET BY THE COMMISSIONER  OF  TAXA-

S. 332                              9

TION  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 THAT IS THIRTY
DAYS  AFTER  RECEIPT BY THE PROVIDER OR PAYER OF THE ALTERNATIVE DISPUTE
RESOLUTION AGENT'S DECISION. WHEN THE AMOUNT OF INTEREST DUE ON  SUCH  A
CLAIM  IS  LESS  THAN  TWO  DOLLARS,  A THIRD PARTY PAYER OR HEALTH CARE
PROVIDER SHALL NOT BE REQUIRED TO PAY INTEREST ON SUCH CLAIM.
  (G) FEES. THE COMMISSIONER SHALL ESTABLISH A FEE SCHEDULE NECESSARY TO
SUPPORT THE OPERATION OF THE ALTERNATIVE DISPUTE RESOLUTION SYSTEM. FEES
CHARGED SHALL BE BORNE BY THE PARTY THAT DOES  NOT  PREVAIL  OR  PROPOR-
TIONALLY DISTRIBUTED BY DOLLAR VALUE IN CASES OF A MIXED DETERMINATION.
  (H)  PROHIBITIONS.  NO HEALTH CARE PROVIDER OR THIRD PARTY PAYER SHALL
BY CONTRACT, WRITTEN POLICY, OR WRITTEN PROCEDURE PROHIBIT  OR  RESTRICT
THE USE OF THE ALTERNATIVE DISPUTE RESOLUTION SYSTEM ESTABLISHED HEREIN,
NOR  SHALL  USE  OF THE ALTERNATIVE DISPUTE RESOLUTION SYSTEM BE A PRIOR
REQUIREMENT TO SEEKING ANY OTHER REMEDIES OTHERWISE PERMITTED BY LAW  OR
CONTRACT.
  (I)  THE DECISION OF THE ALTERNATIVE DISPUTE RESOLUTION AGENT SHALL BE
ADMISSIBLE IN ANY COURT PROCEEDING.
  (J) THE ALTERNATIVE DISPUTE RESOLUTION AGENT SHALL NOTIFY THE  COMMIS-
SIONER  AND  THE  SUPERINTENDENT  OF  INSURANCE  WHEN  IT  BELIEVES THAT
DISPUTES ADJUDICATED BY IT MAY  CONSTITUTE  A  VIOLATION  OF  APPLICABLE
STATE  OR  FEDERAL  LAW  OR  REGULATION  OR FAIR BUSINESS PRACTICES. THE
COMMISSIONER AND SUPERINTENDENT  OF  INSURANCE  SHALL  INVESTIGATE  SUCH
CASES AND SEEK APPROPRIATE REMEDIES.
  (K)  A  THIRD  PARTY  PAYER  SHALL INCLUDE IN ANY QUARTERLY AND ANNUAL
FILINGS MADE TO THE COMMISSIONER AND  THE  SUPERINTENDENT  OF  INSURANCE
INFORMATION  RELATED  TO  THE  ALTERNATIVE  DISPUTE  RESOLUTION PROCESS,
INCLUDING THE NUMBER OF DISPUTES  BROUGHT  BY  IT  IN  THE  TIME  PERIOD
COVERED  BY THE FILING; THE NUMBER OF DISPUTES BROUGHT AGAINST IT IN THE
TIME PERIOD COVERED BY THE FILING; AND THE DISPOSITION OF SUCH  DISPUTES
WITH  A STATEMENT OF WHETHER IT PREVAILED OR DID NOT PREVAIL IN WHOLE OR
IN PART.
  (1) FOR CLAIM PAYMENT AMOUNTS OR OTHER DISPUTES ELIGIBLE  FOR  DISPUTE
RESOLUTION  PURSUANT  TO  THIS SECTION, NO INSURED PERSON SHALL HAVE ANY
FINANCIAL LIABILITY FOR ANY PORTION OF THE HEALTH CARE PROVIDER'S  BILL,
AND  NO  HEALTH CARE PROVIDER SHALL BILL AN INSURED OR PURSUE COLLECTION
EFFORTS AGAINST SUCH INSURED FOR THE DIFFERENCE BETWEEN THE HEALTH  CARE
PROVIDER'S  BILL  AND  THE THIRD PARTY PAYER'S PAYMENT MADE ON SUCH BILL
EXCEPT FOR DEDUCTIBLES, COINSURANCE BASED ON THE UNDISPUTED  PORTION  OF
THE  BILL,  AND  FOR UNCOVERED SERVICES; PROVIDED THAT THE DEFINITION OF
UNCOVERED SERVICES SHALL NOT INCLUDE ANY SERVICES OR CLAIMS WHICH ARE IN
DISPUTE BETWEEN THE THIRD PARTY PAYER AND THE PROVIDER. THE  PROHIBITION
ON  BILLING  AND  COLLECTION  EFFORTS PRESCRIBED BY THIS PARAGRAPH SHALL
REMAIN IN EFFECT UNTIL THE DISPUTE RESOLUTION AGENT RENDERS A DECISION.
  S 4. Section 2805-a of the public health law is amended  by  adding  a
new subdivision 5 to read as follows:
  5.  EVERY  GENERAL  HOSPITAL  SHALL  ALSO SUBMIT A QUARTERLY REPORT ON
BILLING PROCEDURES FOR THIRD-PARTY  PAYORS  AND  PAYMENTS.  SUCH  REPORT
SHALL  INCLUDE  BUT  NOT  BE LIMITED TO, A LISTING OF THE NUMBER OF DAYS
FROM THE DATE SERVICES WERE RENDERED UNTIL A CLAIM WAS  SUBMITTED  TO  A
THIRD-PARTY  PAYOR  FOR  SUCH SERVICES, THE NUMBER OF DAYS FROM THE DATE
THAT A CLAIM WAS SUBMITTED UNTIL PAYMENT WAS  RECEIVED,  THE  NUMBER  OF
DAYS  FROM  THE  DATE THAT PAYMENT WAS RECEIVED UNTIL THE DATE THAT SUCH
PAYMENT WAS POSTED, AND SUCH OTHER INFORMATION AS THE COMMISSIONER DEEMS
APPROPRIATE.

S. 332                             10

  S 5. Paragraph (g) of subdivision 4 of section 2807-e  of  the  public
health law, as amended by chapter 255 of the laws of 1994, is amended to
read as follows:
  (g) The commissioner, in consultation with the superintendent [and the
commissioner  of  social  services] OF INSURANCE, shall establish proce-
dures  for  requiring  third-party  payors  to  accept  the   electronic
submission  of  claims  information  for  inpatient  or  ambulatory care
services made pursuant to the provision of this section.  A  THIRD-PARTY
PAYOR VIOLATES THIS SUBDIVISION IN EACH INSTANCE THAT THE PAYOR FAILS TO
ACCEPT  ELECTRONICALLY  A  CLAIM THAT A HEALTH CARE PROVIDER ATTEMPTS TO
SUBMIT ELECTRONICALLY. ANY  THIRD-PARTY  PAYOR  VIOLATING  THIS  SECTION
AFTER  JANUARY  FIRST,  TWO  THOUSAND  NINE, MUST PAY TWO PERCENT OF THE
FINAL CLAIM AMOUNT TO THE HEALTH CARE PROVIDER AS  A  PENALTY  FOR  EACH
VIOLATION.  HOWEVER,  THE  COMMISSIONER  SHALL PROMULGATE A SCHEDULE FOR
GRADUAL COMPLIANCE WITH THE PROVISIONS OF THIS PARAGRAPH BY  THIRD-PARTY
PAYORS  THAT  CONTRACT  WITH  THE DEPARTMENT UNDER SECTION THREE HUNDRED
SIXTY-FOUR-J OF THE SOCIAL SERVICES LAW AND ARE CONTROLLED BY, SPONSORED
BY, OR OTHERWISE AFFILIATED THROUGH A COMMON  GOVERNANCE  OR  THROUGH  A
PARENT  CORPORATION  WITH  ONE OR MORE PRIVATE, NOT-FOR-PROFIT OR PUBLIC
GENERAL HOSPITALS OR DIAGNOSTIC AND TREATMENT CENTERS LICENSED  PURSUANT
TO  THIS ARTICLE.  SUCH SCHEDULE SHALL BE BASED ON THE MANAGEMENT INFOR-
MATION SYSTEMS CAPACITY AND ENROLLMENT OF SUCH PAYORS AND SHALL  REQUIRE
COMPLIANCE WITH THIS PARAGRAPH BY NO LATER THAN JULY FIRST, TWO THOUSAND
TEN.
  S  6.  Subdivision  21  of section 364-j of the social services law is
amended by adding a new paragraph (g) to read as follows:
  (G) THE DEPARTMENT OF HEALTH SHALL, BY MARCH FIRST, TWO  THOUSAND  TEN
AND  ANNUALLY  BY  DECEMBER FIRST THEREAFTER, ANNOUNCE THE PREMIUM RATES
EFFECTIVE FOR THE NEXT RATE  YEAR.    THE  DEPARTMENT  OF  HEALTH  SHALL
FURTHER  COMMENCE  PAYMENT OF THE NEW RATES ON APRIL FIRST, TWO THOUSAND
TEN AND ANNUALLY ON JANUARY FIRST THEREAFTER.  NOTWITHSTANDING  SUBDIVI-
SION  FIVE  OF  SECTION  ONE HUNDRED SEVENTY-NINE-P OF THE STATE FINANCE
LAW, IN THE EVENT THAT  THE  DEPARTMENT  OF  HEALTH  FAILS  TO  COMMENCE
PAYMENT  OF THE NEW RATES BY APRIL FIRST, TWO THOUSAND TEN OR BY JANUARY
FIRST THEREAFTER, THE DEPARTMENT OF HEALTH SHALL  PAY  INTEREST  ON  ANY
INCREASE  IN  THE RATES OVER THE PRIOR YEAR'S RATES AT THE INTEREST RATE
SPECIFIED IN SECTION ONE HUNDRED SEVENTY-NINE-G  OF  THE  STATE  FINANCE
LAW.
  S  7.  The  opening  paragraph of subparagraph (i) of paragraph (a) of
subdivision 5 of section  4900 of the public health law, as  amended  by
chapter 558 of the laws of 1999, is amended to read as follows:
  AN  INDIVIDUAL health care [procedures, treatments or services] PROCE-
DURE, TREATMENT OR UNIT OF SERVICE FOR WHICH A UTILIZATION REVIEW  AGENT
CHOOSES  TO  UNIQUELY  DETERMINE MEDICAL NECESSITY REGARDLESS OF WHETHER
THE HEALTH CARE PROCEDURE, TREATMENT OR UNIT OF SERVICE  IS  PART  OF  A
COURSE  OF  TREATMENT  CONSISTING  OF MULTIPLE PROCEDURES, TREATMENTS OR
UNITS OF SERVICE
  S 8. Subparagraph (A) of paragraph (b) of  subdivision  5  of  section
4900  of the public health law, as amended by chapter 558 of the laws of
1999, is amended to read as follows:
  (A) [services] AN INDIVIDUAL HEALTH CARE PROCEDURE, TREATMENT OR  UNIT
OF  SERVICE  provided  within  a  clinical trial FOR WHICH A UTILIZATION
REVIEW AGENT CHOOSES TO UNIQUELY DETERMINE MEDICAL NECESSITY  REGARDLESS
OF  WHETHER  THE  HEALTH CARE PROCEDURE, TREATMENT OR UNIT OF SERVICE IS
PART OF A COURSE OF TREATMENT CONSISTING OF MULTIPLE PROCEDURES,  TREAT-
MENTS, OR UNITS OF SERVICE, and

S. 332                             11

  S 9. Subparagraph (A) of paragraph 1 of subsection (e) of section 4900
of  the insurance law, as amended by chapter 558 of the laws of 1999, is
amended to read as follows:
  (A)  AN  INDIVIDUAL  health  care [procedures, treatments or services]
PROCEDURE, TREATMENT OR UNIT OF SERVICE FOR WHICH A  UTILIZATION  REVIEW
AGENT  CHOOSES  TO  UNIQUELY  DETERMINE  MEDICAL NECESSITY REGARDLESS OF
WHETHER THE HEALTH CARE PROCEDURE, TREATMENT OR UNIT OF SERVICE IS  PART
OF  A  COURSE OF TREATMENT CONSISTING OF MULTIPLE PROCEDURES, TREATMENTS
OR UNITS OF SERVICE
  S 10. Subparagraph (A) of paragraph 2 of  subsection  (e)  of  section
4900  of  the  insurance  law,  as amended by chapter 558 of the laws of
1999, is amended to read as follows:
  (A) [services] AN INDIVIDUAL HEALTH CARE PROCEDURE, TREATMENT OR  UNIT
OF  SERVICE  provided  within  a  clinical trial FOR WHICH A UTILIZATION
REVIEW AGENT CHOOSES TO UNIQUELY DETERMINE MEDICAL NECESSITY  REGARDLESS
OF  WHETHER  THE  HEALTH CARE PROCEDURE, TREATMENT OR UNIT OF SERVICE IS
PART OF A COURSE OF TREATMENT CONSISTING OF MULTIPLE PROCEDURES,  TREAT-
MENTS, OR UNITS OF SERVICE, and
  S 11. Section 4900 of the public health law is amended by adding a new
subdivision 7-g to read as follows:
  7-G.  "RETROSPECTIVE  ADVERSE DETERMINATION" MEANS AN ADVERSE DETERMI-
NATION THAT AN ENROLLEE, AN ENROLLEE'S DESIGNEE, OR AN ENROLLEE'S HEALTH
CARE PROVIDER RECEIVES FROM A UTILIZATION REVIEW AGENT AFTER THE  ENROL-
LEE  HAS RECEIVED A HEALTH CARE SERVICE, REGARDLESS OF WHEN THE UTILIZA-
TION REVIEW AGENT BEGAN ITS REVIEW OF THE SERVICE.
  S 12. Section 4900 of the insurance law is amended  by  adding  a  new
subsection (g-7) to read as follows:
  (G-7)  "RETROSPECTIVE ADVERSE DETERMINATION" MEANS AN ADVERSE DETERMI-
NATION THAT AN ENROLLEE, AN ENROLLEE'S DESIGNEE, OR AN ENROLLEE'S HEALTH
CARE PROVIDER RECEIVES FROM A UTILIZATION REVIEW AGENT AFTER THE  ENROL-
LEE  HAS RECEIVED A HEALTH CARE SERVICE, REGARDLESS OF WHEN THE UTILIZA-
TION REVIEW AGENT BEGAN ITS REVIEW OF THE SERVICE.
  S 13. Paragraph (b) of subdivision 1 of section  4902  of  the  public
health law, as amended by chapter 586 of the laws of 1998, is amended to
read as follows:
  (b)  Development  of  written  policies and procedures that govern all
aspects of the utilization review  process  and  a  requirement  that  a
utilization  review agent shall maintain and make available to enrollees
and health care providers  a  written  description  of  such  procedures
including  procedures to appeal an adverse determination together with a
description, jointly promulgated by the commissioner and the superinten-
dent of insurance as required pursuant to subdivision  five  of  section
forty-nine  hundred  fourteen  of  this  article, of the external appeal
process established pursuant to title two of this article and  the  time
frames  for  such  appeals.  THE  UTILIZATION  REVIEW AGENT SHALL NOTIFY
PROVIDERS AND ENROLLEES AT LEAST TWENTY BUSINESS DAYS BEFORE IT  CHANGES
ITS POLICIES AND PROCEDURES;
  S  14.  Paragraph 2 of subsection (a) of section 4902 of the insurance
law, as amended by chapter 586 of the laws of 1998, is amended  to  read
as follows:
  (2)  Development  of  written  policies and procedures that govern all
aspects of the utilization review  process  and  a  requirement  that  a
utilization  review  agent shall maintain and make available to insureds
and health care providers  a  written  description  of  such  procedures
including  procedures to appeal an adverse determination together with a
description, jointly promulgated by the superintendent and  the  commis-

S. 332                             12

sioner  of health as required pursuant to subsection (e) of section four
thousand nine hundred fourteen of this article, of the  external  appeal
process  established  pursuant to title two of this article and the time
frames  for  such  appeals.  THE  UTILIZATION  REVIEW AGENT SHALL NOTIFY
PROVIDERS AND ENROLLEES AT LEAST TWENTY BUSINESS DAYS BEFORE IT  CHANGES
ITS POLICIES AND PROCEDURES;
  S  15.  Paragraph  (c)  of subdivision 1 of section 4902 of the public
health law, as added by chapter 705 of the laws of 1996, is  amended  to
read as follows:
  (c) Utilization of written clinical review criteria developed pursuant
to a utilization review plan CONSISTENT WITH THE REQUIREMENTS OF SECTION
FORTY-NINE  HUNDRED TEN OF THIS ARTICLE; MADE AVAILABLE TO ENROLLEES AND
HEALTH CARE  PROVIDERS,  UPON  REQUEST,  IN  SUFFICIENT  SPECIFICITY  TO
APPRISE  THE  PROVIDER  OF EVERY CASE-SPECIFIC CLINICAL REVIEW CRITERION
AND STANDARD USED IN THE REVIEW PROCESS; WITH ADVANCE NOTICE OF AT LEAST
TWENTY BUSINESS DAYS TO CONTRACTED PROVIDERS OF CHANGES TO SUCH CRITERIA
AND STANDARDS;
  S 16. Paragraph 3 of subsection (a) of section 4902 of  the  insurance
law,  as added by chapter 705 of the laws of 1996, is amended to read as
follows:
  (3) Utilization of written clinical review criteria developed pursuant
to a utilization review plan CONSISTENT WITH THE REQUIREMENTS OF SECTION
FOUR THOUSAND NINE HUNDRED TEN OF THIS  ARTICLE;  MADE  AVAILABLE,  UPON
REQUEST, TO ENROLLEES AND HEALTH CARE PROVIDERS IN SUFFICIENT SPECIFICI-
TY TO APPRISE THE PROVIDER OF EVERY CASE-SPECIFIC CLINICAL REVIEW CRITE-
RION  AND STANDARD USED IN THE REVIEW PROCESS; WITH ADVANCE NOTICE OF AT
LEAST TWENTY BUSINESS DAYS TO CONTRACTED PROVIDERS OF  CHANGES  TO  SUCH
CRITERIA AND STANDARDS;
  S  17.  Paragraph  (h)  of subdivision 1 of section 4902 of the public
health law, as added by chapter 705 of the laws of 1996, is  amended  to
read as follows:
  (h) Establishment of a requirement that emergency services rendered to
an  enrollee  shall  not  be  subject  to  prior authorization OR NOTICE
REQUIREMENTS  OF  FEWER  THAN  FIVE  DAYS  FOLLOWING  RECEIPT  OF  THESE
SERVICES,  UNLESS OTHERWISE AGREED TO BY A HEALTH CARE PLAN AND A HEALTH
CARE PROVIDER, nor shall reimbursement for such services be  denied  [on
retrospective  review;  provided,  however,]  FOR ANY REASON EXCEPT that
such services [are] WERE NOT medically necessary to stabilize  or  treat
an emergency condition.
  S  18.  Paragraph 8 of subsection (a) of section 4902 of the insurance
law, as added by chapter 705 of the laws of 1996, is amended to read  as
follows:
  (8) Establishment of a requirement that emergency services rendered to
an  insured  shall  not  be  subject  to  prior  authorization OR NOTICE
REQUIREMENTS  OF  FEWER  THAN  FIVE  DAYS  FOLLOWING  RECEIPT  OF  THESE
SERVICES,  UNLESS OTHERWISE AGREED TO BY A HEALTH CARE PLAN AND A HEALTH
CARE PROVIDER, nor shall reimbursement for such services be  denied  [on
retrospective  review;  provided,  however,]  FOR ANY REASON EXCEPT that
such services [are] WERE NOT medically necessary to stabilize  or  treat
an emergency condition.
  S 19. Subdivision 2 of section 4903 of the public health law, as added
by chapter 705 of the laws of 1996, is amended to read as follows:
  2.    A  UTILIZATION  REVIEW  AGENT  SHALL NOT REQUIRE AN ENROLLEE, AN
ENROLLEE'S DESIGNEE OR AN ENROLLEE'S HEALTH  CARE  PROVIDER  TO  REQUEST
PRE-AUTHORIZATION FOR HEALTH CARE SERVICES MORE THAN SEVEN BUSINESS DAYS
IN  ADVANCE  OF  THE  DATE  ON  WHICH  THE  SERVICES  ARE PROPOSED TO BE

S. 332                             13

PROVIDED. A utilization review agent shall  make  a  utilization  review
determination  involving [health care] SUCH services [which require pre-
authorization] and provide notice of [a] ITS determination to the enrol-
lee  or  enrollee's  designee and the enrollee's health care provider by
telephone and in writing within three business days of  receipt  of  the
necessary information.
  S 20. Subdivision 7 of section 4905 of the public health law, as added
by chapter 705 of the laws of 1996, is amended to read as follows:
  7.  When  making  prospective,  concurrent  and retrospective determi-
nations, utilization review agents shall collect only  such  information
as  is  necessary  to  make  such  determination and shall not routinely
require health care providers to numerically code  diagnoses  or  proce-
dures  to be considered for certification or routinely request copies of
medical records of all patients reviewed. During prospective or  concur-
rent  review,  copies  of  medical  records  shall only be required when
necessary to verify that the health care services subject to such review
are medically necessary. In such cases, only the necessary  or  relevant
sections  of  the medical record shall be required. A utilization review
agent may request copies of partial or complete medical records  retros-
pectively.  [This  subdivision  shall  not  apply  to health maintenance
organizations licensed pursuant to article forty-three of the  insurance
law or certified pursuant to article forty-four of this chapter.]
  S 21. Section 4905 of the public health law is amended by adding a new
subdivision 16 to read as follows:
  16. A PRE-AUTHORIZATION APPROVAL GRANTED BY A UTILIZATION REVIEW AGENT
IS  A BINDING COMMITMENT TO MAKE PAYMENT FOR SPECIFIC SERVICES PERFORMED
AND PRE-AUTHORIZED, EXCEPT IN CASES WHERE THE SERVICES WERE RENDERED  TO
AN INDIVIDUAL NOT ENROLLED IN A PLAN AT THE TIME SERVICES WERE RENDERED,
OR  WHEN  THERE  IS A REASONABLE BASIS SUPPORTED BY SPECIFIC INFORMATION
AVAILABLE FOR REVIEW  BY  THE  SUPERINTENDENT  OF  INSURANCE  THAT  SUCH
APPROVAL  WAS  OBTAINED  FRAUDULENTLY.   IN THE EVENT THAT MORE THAN ONE
PAYOR IS RESPONSIBLE FOR PAYMENT  FOR  HEALTH  CARE  SERVICES  RENDERED,
PRE-AUTHORIZATION SHALL NOT PRECLUDE ANY CLAIM BY THE PAYOR FOR INDEMNI-
FICATION  OR  CONTRIBUTION  FROM  OTHER  PAYORS RESPONSIBLE FOR PAYMENT.
SPECIFIC SERVICES MAY INCLUDE  SPECIFIC  PROCEDURES,  SITE  OF  SERVICE,
INPATIENT ADMISSION OR A TREATMENT PLAN FOR A CHRONIC PATIENT.
  S  22. The public health law is amended by adding a new section 4908-a
to read as follows:
  S 4908-A. ENFORCEMENT. IN ADDITION TO ANY OTHER  POWERS  CONFERRED  ON
THE  COMMISSIONER TO ENFORCE THIS CHAPTER, THE COMMISSIONER MAY TAKE THE
FOLLOWING ACTIONS WHEN ENTITIES SUBJECT TO THIS  TITLE  FAIL  TO  COMPLY
WITH THE PROVISIONS OF THIS TITLE.
  1.  THE  COMMISSIONER  MAY  REQUIRE  AN  ENTITY TO SUBMIT A CORRECTIVE
ACTION PLAN AND PERIODIC UPDATES UNTIL  THE  COMMISSIONER  IS  SATISFIED
THAT  THE  ENTITY  IS IN COMPLIANCE AND HAS ADOPTED THE NECESSARY PROCE-
DURES TO ENSURE FUTURE COMPLIANCES.
  2. THE COMMISSIONER MAY IMPOSE A FINE OF UP TO  ONE  THOUSAND  DOLLARS
FOR EACH VIOLATION OF THIS TITLE.
  3. THE COMMISSIONER MAY RENEW WITH RESTRICTIONS OR REFUSE TO RENEW THE
REGISTRATION OF A UTILIZATION REVIEW AGENT.
  4.  THE  COMMISSIONER  MAY  REVOKE  THE  REGISTRATION OF A UTILIZATION
REVIEW AGENT.
  5. THE COMMISSIONER MAY RESTRICT THE  REGISTRATION  OF  A  UTILIZATION
REVIEW AGENT TO PERFORM PARTICULAR TYPES OF UTILIZATION REVIEW UNTIL THE
AGENT COMPLIES WITH THIS TITLE.

S. 332                             14

  S 23. Subsection (b) of section 4903 of the insurance law, as added by
chapter 705 of the laws of 1996, is amended to read as follows:
  (b)  A  UTILIZATION  REVIEW  AGENT  SHALL  NOT REQUIRE AN ENROLLEE, AN
ENROLLEE'S DESIGNEE OR AN ENROLLEE'S HEALTH  CARE  PROVIDER  TO  REQUEST
PRE-AUTHORIZATION FOR HEALTH CARE SERVICES MORE THAN SEVEN BUSINESS DAYS
IN  ADVANCE  OF  THE  DATE  ON  WHICH  THE  SERVICES  ARE PROPOSED TO BE
PROVIDED. A utilization review agent shall  make  a  utilization  review
determination  involving [health care] SUCH services [which require pre-
authorization] and provide  notice  of  [a]  ITS  determination  to  the
insured  or insured's designee and the insured's health care provider by
telephone and in writing within three business days of  receipt  of  the
necessary information.
  S  24.  Section  4905  of the insurance law is amended by adding a new
subsection (p) to read as follows:
  (P) A PRE-AUTHORIZATION APPROVAL GRANTED BY A UTILIZATION REVIEW AGENT
IS A BINDING COMMITMENT TO MAKE PAYMENT FOR SPECIFIC SERVICES  PERFORMED
AND  PRE-AUTHORIZED, EXCEPT IN CASES WHERE THE SERVICES WERE RENDERED TO
AN INDIVIDUAL NOT ENROLLED IN A PLAN AT THE TIME  SERVICES  WERE  DELIV-
ERED, OR WHEN THERE IS A REASONABLE BASIS SUPPORTED BY SPECIFIC INFORMA-
TION  AVAILABLE  FOR REVIEW BY THE SUPERINTENDENT THAT SUCH APPROVAL WAS
OBTAINED FRAUDULENTLY.  IN THE EVENT THAT MORE THAN ONE PAYOR IS RESPON-
SIBLE FOR PAYMENT FOR HEALTH CARE SERVICES  RENDERED,  PRE-AUTHORIZATION
SHALL  NOT  PRECLUDE  ANY  CLAIM  BY  THE  PAYOR  FOR INDEMNIFICATION OR
CONTRIBUTION FROM  OTHER  PAYORS  RESPONSIBLE  FOR  PAYMENT.    SPECIFIC
SERVICES  MAY  INCLUDE  SPECIFIC  PROCEDURES, SITE OF SERVICE, INPATIENT
ADMISSION OR A TREATMENT PLAN FOR A CHRONIC PATIENT.
  S 25. The insurance law is amended by adding a new section  4908-a  to
read as follows:
  S  4908-A.  ENFORCEMENT.  IN ADDITION TO ANY OTHER POWERS CONFERRED ON
THE SUPERINTENDENT TO ENFORCE THIS CHAPTER, THE SUPERINTENDENT MAY  TAKE
THE FOLLOWING ACTIONS WHEN ENTITIES SUBJECT TO THIS TITLE FAIL TO COMPLY
WITH THE PROVISIONS OF THIS TITLE.
  (A)  THE  SUPERINTENDENT  MAY REQUIRE AN ENTITY TO SUBMIT A CORRECTIVE
ACTION PLAN AND PERIODIC UPDATES UNTIL THE SUPERINTENDENT  IS  SATISFIED
THAT THE ENTITY COMPLIES.
  (B) THE SUPERINTENDENT MAY IMPOSE A FINE OF UP TO ONE THOUSAND DOLLARS
FOR EACH VIOLATION OF THIS TITLE.
  (C)  THE SUPERINTENDENT MAY RENEW WITH RESTRICTIONS OR REFUSE TO RENEW
THE REGISTRATION OF A UTILIZATION REVIEW AGENT.
  (D) THE SUPERINTENDENT MAY REVOKE THE REGISTRATION  OF  A  UTILIZATION
REVIEW AGENT.
  (E)  THE SUPERINTENDENT MAY RESTRICT THE REGISTRATION OF A UTILIZATION
REVIEW AGENT TO PERFORM PARTICULAR TYPES OF UTILIZATION REVIEW UNTIL THE
AGENT COMPLIES WITH THIS TITLE.
  S 26. Subsection (e) of section 7402 of the insurance law  is  amended
to read as follows:
  (e)  Is  found,  after  examination,  to be in such condition that its
further transaction of business will be hazardous to its  policyholders,
creditors,  or  the  public.    THIS  SHALL INCLUDE A HEALTH INSURER, AS
DEFINED IN ARTICLE EIGHTY OF THIS CHAPTER, THAT IS  CONSISTENTLY  UNABLE
TO   MEET  THE  REQUIREMENTS  OF  SECTION  THREE  THOUSAND  TWO  HUNDRED
TWENTY-FOUR-A OF THIS CHAPTER.
  S 27. Section 7403 of the insurance law is amended  by  adding  a  new
subsection (e) to read as follows:
  (E)(1)  UPON A DETERMINATION BY THE SUPERINTENDENT AND THE REHABILITA-
TOR THAT FUNDS FROM THE NEW YORK  HEALTH  INSURANCE  GUARANTY  FUND  ARE

S. 332                             15

NECESSARY  TO  MEET  THE REQUIREMENTS OF ARTICLE EIGHTY OF THIS CHAPTER,
THE SUPERINTENDENT SHALL MAKE AVAILABLE SUCH  FUNDS  AS  ARE  NECESSARY,
PURSUANT TO THE REQUIREMENTS OF SUCH ARTICLE.
  (2)  THE  SUPERINTENDENT  SHALL ADVANCE SUCH FUNDS AS MAY BE NECESSARY
PURSUANT TO SUBSECTION (D) OF SECTION EIGHT THOUSAND FOUR OF THIS  CHAP-
TER. THE REHABILITATOR AND THE SUPERINTENDENT SHALL ESTABLISH A PLAN, IF
POSSIBLE, FOR REPAYMENT OF THE ADVANCE, AT A RATE OF INTEREST DETERMINED
BY THE SUPERINTENDENT.
  (3)  ADVANCES, PURSUANT TO PARAGRAPH TWO OF THIS SUBSECTION, SHALL, IN
ALL RESPECTS EXCEPT TO RATE OF INTEREST, BE SUBJECT TO THE PROVISIONS OF
SECTION ONE THOUSAND THREE HUNDRED SEVEN OF THIS CHAPTER, PROVIDED  THAT
IN  THE  EVENT THAT AN INSURER WHICH HAS RECEIVED AN ADVANCE PURSUANT TO
THIS SUBSECTION IS SUBSEQUENTLY THE SUBJECT OF AN ORDER OF  LIQUIDATION,
THE  CLAIM  OF  THE  FUND FOR THE ADVANCE AND ANY ACCRUED INTEREST SHALL
HAVE PRIORITY ABOVE CLAIMS OF ALL  NONSECURED  CREDITORS,  PROVIDED  THE
REQUIREMENTS  OF ARTICLE EIGHTY OF THIS CHAPTER HAVE BEEN MET, AND SHALL
BE PAID IMMEDIATELY TO THE FUND OR  AS  SOON  AS  ASSETS  ARE  AVAILABLE
THEREFOR.
  S  28.  Paragraph 1 of subsection (f) of section 7405 of the insurance
law, as amended by chapter 33 of the laws of 2005, is amended to read as
follows:
  (1) No later than one hundred eighty  days  after  a  final  order  of
liquidation  with an adjudication of insolvency of an insurer by a court
of competent jurisdiction of this state, the liquidator may in his  sole
discretion  make  application to the court for approval of a proposal to
disburse assets out of marshalled assets, from  time  to  time  as  such
assets  become available, to any fund established by article seventy-six
of this chapter, article six-A of the workers' compensation law and  any
foreign  entity  performing a similar function, AND ANY FUND ESTABLISHED
PURSUANT TO ARTICLE EIGHTY OF THIS CHAPTER, PROVIDED THAT  THE  REQUIRE-
MENTS  OF SUBSECTION (A) OF SECTION EIGHT THOUSAND THREE OF THIS CHAPTER
HAVE BEEN MET, having obligations because of  such  insolvency.  If  the
liquidator  determines  that  there are insufficient assets to disburse,
the application authorized by this subsection shall be considered satis-
fied by a filing by the liquidator stating the reasons for this determi-
nation.
  S 29. The insurance law is amended by adding a new article 80 to  read
as follows:
                               ARTICLE 80
                     HEALTH INSURANCE GUARANTY FUND
SECTION 8001. PURPOSE.
        8002. DEFINITIONS.
        8003. NEW  YORK  HEALTH  INSURANCE  CONSUMER PROTECTION SECURITY
                FUND.
        8004. POWERS OF THE SUPERINTENDENT.
  S 8001. PURPOSE. THE PURPOSE OF THIS ARTICLE  IS  TO  PROTECT  COVERED
INDIVIDUALS  AGAINST  THE  FAILURE  OR  INABILITY OF A HEALTH INSURER TO
PERFORM ITS CONTRACTUAL  OBLIGATIONS  DUE  TO  FINANCIAL  IMPAIRMENT  OR
INSOLVENCY. TO PROVIDE THIS PROTECTION, THE LEGISLATURE HEREBY CREATES A
NEW  YORK  HEALTH  INSURANCE  GUARANTY  FUND TO SERVE AS A GUARANTY FUND
MECHANISM CAPABLE OF INSURING THAT THE FINANCIAL OBLIGATIONS  OF  HEALTH
INSURERS TO THEIR ENROLLEES AND HEALTH CARE PROVIDERS ARE SATISFIED.
  S 8002. DEFINITIONS. AS USED IN THIS ARTICLE:
  (A)  "FUND"  MEANS  THE  NEW YORK HEALTH INSURANCE CONSUMER PROTECTION
SECURITY FUND CREATED BY THIS ARTICLE.

S. 332                             16

  (B) "HEALTH  INSURER"  MEANS  ANY  ORGANIZATION  OR  ENTITY  PROVIDING
REIMBURSEMENT FOR A COVERED EXPENSE UNDER ANY INDIVIDUAL, GROUP OR BLAN-
KET POLICY OR CONTRACT COVERING THE KINDS OF INSURANCE DESCRIBED IN ITEM
(I)  OF  PARAGRAPH  THREE  OF SUBSECTION (A) OF SECTION ONE THOUSAND ONE
HUNDRED  THIRTEEN  OF THIS CHAPTER AND LICENSED UNDER ARTICLE THIRTY-TWO
OR FORTY-TWO OF THIS CHAPTER, WHICH IS NOT A MEMBER OF,  OR  PARTICIPANT
IN,  OR A SUBSIDIARY OF A MEMBER OF OR PARTICIPANT IN, THE FUNDS CREATED
PURSUANT TO ARTICLES SEVENTY-FIVE, SEVENTY-SIX AND SEVENTY-SEVEN OF THIS
CHAPTER; A CORPORATION ORGANIZED UNDER ARTICLE FORTY-THREE OF THIS CHAP-
TER; OR AN ORGANIZATION CERTIFIED UNDER ARTICLE FORTY-FOUR OF THE PUBLIC
HEALTH LAW.
  (C) "CONTRACTUAL OBLIGATION" MEANS ANY PAYMENT OR  REIMBURSEMENT  OWED
BY  A  HEALTH INSURER FOR A COVERED BENEFIT UNDER A POLICY, CONTRACT, OR
COMPREHENSIVE HEALTH BENEFITS PLAN.
  (D) "IMPAIRED HEALTH INSURER" MEANS A  HEALTH  INSURER  FOR  WHOM  THE
SUPERINTENDENT  HAS INITIATED A PROCEEDING UNDER THE PROVISIONS OF ARTI-
CLE SEVENTY-FOUR OF THIS CHAPTER.
  (E) "COMMISSIONER" MEANS THE COMMISSIONER OF TAXATION AND FINANCE.
  S 8003. NEW YORK HEALTH INSURANCE CONSUMER PROTECTION  SECURITY  FUND.
(A)  CONSISTENT  WITH THE PROVISIONS OF SUBDIVISION ONE OF SECTION NINE-
TY-TWO-FF OF THE STATE FINANCE LAW, THERE IS HEREBY  ESTABLISHED  A  NEW
YORK  HEALTH  INSURANCE  GUARANTY  FUND.  SUCH FUND SHALL BE USED IN THE
PAYMENT OF UNPAID CONTRACTUAL OBLIGATIONS, IN WHOLE OR IN  PART,  BY  AN
IMPAIRED HEALTH INSURER, AFTER APPLICATION OF ANY FUNDS AVAILABLE FROM A
PROCEEDING IMPLEMENTED PURSUANT TO ARTICLE SEVENTY-FOUR OF THIS CHAPTER.
  (B)(1)  PAYMENT INTO THE FUND BY HEALTH INSURERS SHALL BE MADE THROUGH
AN ASSESSMENT BASED ON THE PREMIUMS RECEIVED BY  A  HEALTH  INSURER  FOR
BUSINESS  IN  THIS  STATE  FOR  THE  MOST RECENT CALENDAR YEAR FOR WHICH
PREMIUM INFORMATION IS AVAILABLE.  THE  SUPERINTENDENT  SHALL  ESTABLISH
ASSESSMENT  LEVELS  SUFFICIENT  TO  FULLY  PAY  ALL  UNPAID CLAIMS OF AN
IMPAIRED HEALTH INSURER, PURSUANT TO SUBSECTIONS (B),  (C)  AND  (D)  OF
SECTION  EIGHT THOUSAND FOUR OF THIS ARTICLE, AND TO REPAY ANY TRANSFERS
MADE PURSUANT TO SUBDIVISION FIVE OF SECTION SEVENTY-TWO  OF  THE  STATE
FINANCE LAW.
  (2)  THE  SUPERINTENDENT  MAY  EXEMPT,  ABATE OR DEFER, IN WHOLE OR IN
PART, THE ASSESSMENT OF A HEALTH INSURER IF  THE  SUPERINTENDENT  DETER-
MINES  THAT  PAYMENT OF THE ASSESSMENT WOULD ENDANGER THE ABILITY OF THE
HEALTH INSURER TO FULFILL  ITS  CONTRACTUAL  OBLIGATIONS  OR  PLACE  THE
HEALTH  INSURER  IN  AN  UNSAFE OR UNSOUND FINANCIAL CONDITION.   IN THE
EVENT THAT HEALTH INSURERS PARTICIPATING IN THE  FUND  DUE  TO  BENEFITS
PROVIDED PURSUANT TO TITLE ELEVEN OF ARTICLE FIVE OF THE SOCIAL SERVICES
LAW,  TITLE  ONE-A  OF  ARTICLE  TWENTY-FIVE OF THE PUBLIC HEALTH LAW OR
SECTION THREE HUNDRED SIXTY-NINE-EE OF THE SOCIAL SERVICES  LAW  DO  NOT
RECEIVE  PAYMENTS FROM THE GOVERNMENT AGENCY RESPONSIBLE FOR ADMINISTER-
ING SUCH PROGRAMS, IN ADDITION TO REGULAR PREMIUM  PAYMENTS,  WHICH  ARE
EQUAL  TO THE AMOUNT OF ANY ASSESSMENT PRIOR TO THE DATE THAT PAYMENT OF
ANY SUCH ASSESSMENT IS DUE, THEN THE SUPERINTENDENT  SHALL  EXEMPT  SUCH
HEALTH INSURERS FROM SUCH ASSESSMENT.
  (3)  IN  THE EVENT AN ASSESSMENT AGAINST A HEALTH INSURER IS EXEMPTED,
ABATED OR DEFERRED, IN WHOLE OR  IN  PART,  THE  AMOUNT  BY  WHICH  THAT
ASSESSMENT  IS  EXEMPTED,  ABATED  OR DEFERRED SHALL BE ASSESSED AGAINST
OTHER HEALTH INSURERS IN A MANNER CONSISTENT WITH THIS SECTION.
  (C) REPAYMENT OF HEALTH INSURERS WHEN FUNDS BECOME  AVAILABLE  FROM  A
PROCEEDING  PURSUANT  TO  ARTICLE  SEVENTY-FOUR OF THIS CHAPTER SHALL BE
PROPORTIONATE TO THE CONTRIBUTION FROM EACH HEALTH INSURER.

S. 332                             17

  S 8004. POWERS OF THE SUPERINTENDENT.  (A)  FOR  ANY  IMPAIRED  HEALTH
INSURER,  THE  SUPERINTENDENT  SHALL  DIRECT  THE  COMMISSIONER  TO MAKE
PAYMENTS FROM THE NEW YORK HEALTH INSURANCE GUARANTY FUND TO ENSURE THAT
PAYMENTS TO HEALTH CARE PROVIDERS,  OR  INDEMNITY  PAYMENTS  TO  COVERED
INDIVIDUALS,  ARE  MADE  IN  FULL  FOR  SERVICES PROVIDED THAT WOULD NOT
OTHERWISE BE FULLY REIMBURSED DESPITE THE PROCEEDINGS IMPLEMENTED PURSU-
ANT TO ARTICLE SEVENTY-FOUR OF THIS CHAPTER.  SERVICES  PROVIDED  EITHER
PRIOR  TO  THE IMPLEMENTATION OF A PROCEEDING UNDER ARTICLE SEVENTY-FOUR
OF THIS CHAPTER OR AFTER IMPLEMENTATION  OF  SUCH  PROCEEDING  SHALL  BE
ELIGIBLE  FOR REIMBURSEMENT, IN PART OR IN WHOLE, FROM THE FUND. PAYMENT
IN FULL SHALL BE  DETERMINED  BY  THE  TERMS  OF  THE  HEALTH  INSURANCE
CONTRACT,  ANY  CONTRACT BETWEEN A HEALTH CARE PROVIDER AND THE IMPAIRED
HEALTH INSURER AND ANY APPLICABLE STATE OR FEDERAL LAWS OR REGULATIONS.
  (B) THE SUPERINTENDENT SHALL DIRECT THE COMMISSIONER TO MAKE  PAYMENTS
TO  ENSURE  THAT  PAYMENT  IN  FULL IS MADE TO HEALTH CARE PROVIDERS, OR
INDEMNITY PAYMENTS TO COVERED INDIVIDUALS, FOR SERVICES PROVIDED  BEFORE
THE  IMPLEMENTATION  OF  PROCEEDINGS PURSUANT TO ARTICLE SEVENTY-FOUR OF
THIS CHAPTER WITHIN THIRTY DAYS OF THE IMPLEMENTATION OF  SUCH  PROCEED-
ING.
  (C)  THE  SUPERINTENDENT  SHALL DIRECT THE COMMISSIONER TO ENSURE THAT
PAYMENT IN FULL IS MADE TO HEALTH CARE PROVIDERS, OR INDEMNITY  PAYMENTS
TO  COVERED  INDIVIDUALS, FOR SERVICES PROVIDED AFTER THE IMPLEMENTATION
OF PROCEEDINGS PURSUANT TO ARTICLE SEVENTY-FOUR OF THIS  CHAPTER  WITHIN
THIRTY DAYS OF RECEIPT OF A CLAIM.
  (D)  IF NECESSARY, THE SUPERINTENDENT SHALL DIRECT THE COMMISSIONER TO
ADVANCE  MONIES  FROM  THE  FUND  TO  COMPLY  WITH  THE  PROVISIONS   OF
SUBSECTIONS (B) AND (C) OF THIS SECTION.
  (E)  THE SUPERINTENDENT SHALL NOTIFY THE DIRECTOR OF THE BUDGET OF THE
NEED FOR MONIES TO  BE  TRANSFERRED  PURSUANT  TO  SUBDIVISION  FIVE  OF
SECTION SEVENTY-TWO OF THE STATE FINANCE LAW TO MEET THE REQUIREMENTS OF
SUBSECTIONS (B), (C) AND (D) OF THIS SECTION.
  (F) THE SUPERINTENDENT SHALL DIRECT THE COMMISSIONER TO USE THE MONIES
OF  THE FUND TO REPAY ANY TRANSFERS MADE PURSUANT TO SUBDIVISION FIVE OF
SECTION SEVENTY-TWO OF THE STATE FINANCE LAW, WHEN SUCH FUNDS  ARE  PAID
PURSUANT TO SUBSECTION (B) OF SECTION EIGHT THOUSAND THREE OF THIS ARTI-
CLE.
  S  30.  Section 72 of the state finance law is amended by adding a new
subdivision 5 to read as follows:
  5. NOTWITHSTANDING ANY PROVISION OF LAW TO THE CONTRARY, UPON  NOTIFI-
CATION  FROM  THE  SUPERINTENDENT OF INSURANCE OF THE NEED FOR MONIES TO
MEET THE REQUIREMENTS OF SUBSECTIONS (B), (C) AND (D) OF  SECTION  EIGHT
THOUSAND  FOUR  OF  THE  INSURANCE LAW, THE DIRECTOR OF THE BUDGET SHALL
TRANSFER SUCH FUNDS AS ARE NECESSARY.
  S 31. The state finance law is amended by adding a new  section  92-ff
to read as follows:
  S  92-FF.  NEW YORK HEALTH INSURANCE GUARANTY FUND. 1. THERE IS HEREBY
ESTABLISHED IN THE CUSTODY OF THE  COMMISSIONER  OF  THE  DEPARTMENT  OF
TAXATION  AND  FINANCE  AN  ACCOUNT OF THE MISCELLANEOUS SPECIAL REVENUE
FUND TO BE KNOWN AS THE NEW YORK HEALTH  INSURANCE  CONSUMER  PROTECTION
SECURITY FUND ACCOUNT.
  2.  NOTWITHSTANDING ANY OTHER LAW, RULE OR REGULATION TO THE CONTRARY,
THE COMMISSIONER OF  TAXATION  AND  FINANCE  IS  HEREBY  AUTHORIZED  AND
DIRECTED  TO  RECEIVE  FOR  DEPOSIT TO THE CREDIT OF THE NEW YORK HEALTH
INSURANCE GUARANTY FUND ACCOUNT, ASSESSMENTS IMPOSED PURSUANT TO ARTICLE
EIGHTY OF THE INSURANCE LAW AND TRANSFERS FROM THE GENERAL FUND PURSUANT
TO SUBDIVISION FIVE OF SECTION SEVENTY-TWO OF THIS ARTICLE.

S. 332                             18

  3. THE COMMISSIONER OF TAXATION AND FINANCE SHALL MAKE  PAYMENTS  FROM
THE  MONIES  ON  DEPOSIT  IN THE NEW YORK HEALTH INSURANCE GUARANTY FUND
ACCOUNT IN THE AMOUNTS AND AT THE TIMES DETERMINED BY THE SUPERINTENDENT
OF INSURANCE.
  S 32. This act shall take effect immediately, except that sections one
through  twelve  and  sections  seventeen through thirty-one of this act
shall take effect January  1,  2010  and  sections  thirteen,  fourteen,
fifteen  and  sixteen  of this act shall take effect on the sixtieth day
after it shall have become a law; provided, however, that the amendments
to section 364-j of the social services law made by section six of  this
act  shall  not  affect  the  repeal of such section and shall be deemed
repealed therewith; and provided further, however, that effective  imme-
diately, the addition, amendment and/or repeal of any rule or regulation
or  other administrative action 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.