S T A T E O F N E W Y O R K
________________________________________________________________________
694
2017-2018 Regular Sessions
I N A S S E M B L Y
January 9, 2017
___________
Introduced by M. of A. MAGNARELLI, GALEF, LUPARDO -- Multi-Sponsored by
-- M. of A. HOOPER -- 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 237 of the laws of 2009, 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 or forty-seven 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 ("covered person") or make a payment to a health care
provider is not reasonably clear, or when there is a reasonable basis
supported by specific information available for review by the super-
intendent 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 policyholder or covered person or make a
payment to a health care provider within thirty days of receipt of a
claim or bill for services rendered that is transmitted via the internet
or electronic mail, or [forty-five] THIRTY days of receipt of a claim or
bill for services rendered that is submitted by other means, such as
paper or facsimile.
(b) In a case where the obligation of an insurer or an organization or
corporation licensed or certified pursuant to article forty-three or
forty-seven 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 eligi-
bility of a person for coverage, the liability of another insurer or
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD00559-01-7
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corporation 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 organ-
ization or corporation 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 calen-
dar 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.
(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.
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 or certified pursuant to article
forty-three or forty-seven 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.
(c) (1) Except as provided in paragraph two 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 ARTICLE TWENTY-FOUR OF THIS CHAPTER OR ELSEWHERE 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] AN insurer or organization or corporation shall not be
required to pay interest on such claim.
(2) Where a violation of this section is determined by the superinten-
dent as a result of the superintendent's own investigation, examination,
audit or inquiry, an insurer or organization or corporation licensed or
certified pursuant to article forty-three or forty-seven of this chapter
or article forty-four of the public health law shall not be subject to a
civil penalty prescribed in paragraph one of this subsection, if the
superintendent determines that the insurer or organization or corpo-
ration has otherwise processed at least ninety-eight percent of the
claims submitted in a calendar year in compliance with this section;
provided, however, nothing in this paragraph shall limit, preclude or
exempt an insurer or organization or corporation from payment of a claim
and payment of interest pursuant to this section. This paragraph shall
not apply to violations of this section determined by the superintendent
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resulting from individual complaints submitted to the superintendent by
health care providers or policyholders.
§ 2. Section 3224-a of the insurance law is amended by adding two new
subsections (k) and (l) to read as follows:
(K) 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.
(L) EVERY SIX MONTHS, INSURERS SHALL PREPARE A LIST OF CLAIMS FOR
WHICH THEY WILL ALWAYS REQUEST OPERATIVE NOTES AND/OR DOCUMENTATION OF
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.
§ 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.
§ 4. Section 3217-a of the insurance law is amended by adding a new
subsection (g) to read as follows:
(G) 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.
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§ 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 is
authorized and directed to be made and completed on or before such
effective date.