Amd Ins L, generally; add SS23 & 24, amd SS4408, 4900, 4903, 4904, 4910 & 4914, Pub Health L; add Art 7 SS701
- 704, Fin Serv L
Establishes protections to prevent surprise medical bills including network adequacy requirements, claim submission requirements, adequacy of and access to out-of-network care and prohibition of excessive emergency charges.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A7253
SPONSOR: Montesano TITLE OF BILL: An act to amend the insurance law, the public health
law and the financial services law, in relation to establishing
protections to prevent surprise medical bills including network adequacy
requirements, claim submission requirements, adequacy of and access to
out-of-network care and prohibition of excessive emergency charges; and
providing for the repeal of certain provisions upon expiration thereof
PURPOSE OR GENERAL IDEA OF BILL: This bill establishes consumer
protections from surprise medical bills by: requiring certain disclo-
sures from insurers, health care providers and hospitals; requiring
adequate access to care; establishing a minimum reimbursement for out-
of-network services; and prohibiting excessive emergency room charges.
SUMMARY OF SPECIFIC PROVISIONS: Section one amends Insurance Law §
3217-a(a) to make several conforming changes and require insurers to
provide several additional disclosures. For all policies offering out-
of-network coverage pursuant to § 3420(b)&(c) of this article, the
insurer must provide a clear description of the methodology used to
determine reimbursement for out-of-network health care services, includ-
ing a description of the amount set forth as a percentage of the usual
and customary cost for out-of-network health care services and examples
of anticipated out-of-pocket costs.
Section two amends Insurance Law § 3217-a(b) to require the insurer
disclose, upon request, whether a health care provider scheduled to
perform services is in-network and where applicable, 1) the dollar
amount the insurer will pay for specific out-of-network services, and 2)
information permitting an insured or prospective insured to determine
anticipated out-of-pocket costs for out-of-network services in a
geographical area, based upon the difference the insurer will reimburse
and the usual and customary cost.
Section three amends Insurance Law § 3217-a(f) to define the usual and
customary cost as the eightieth percentile of all charges for a partic-
ular health care service performed in the same or similar specialty and
provided in the same geographical area as reported by FAIR Health, Inc.
Section four amends Insurance Law § 3217-d(d) to provide that comprehen-
sive policies under this article must provide access to out-of-network
services if there is no in-network provider.
Section five amends Insurance Law § 3224-a to require an insurer, a
corporation or organization under Article 43 or Article 47 of this chap-
ter and HMOs under Article 44 of the Public Health Law to accept claims
submitted through the internet, e-mail or fax.
Section six adds a new § 3240 to the Insurance Law. Section 3240(a)
requires that an insurer, a corporation organized pursuant to Article 43
and a municipal cooperative health benefit plan under Article 47 of this
chapter maintain an adequate network. Sections 3240(b) & (c) requires an
insurer, a corporation organized pursuant to Article 43, a municipal
cooperative health benefit plan certified under Article 47 of this Chap-
ter and an HMO under article 44 of the Public Health Law to provide: 1)
significant coverage of the usual and customary cost of out-of-network
services; and 2) to offer at least one policy or contract option in each
geographical region covered that provides coverage for at least 80% of
the usual and customary cost of out-of-network health care services,
after imposition of a deductible.
Section seven amends Insurance Law § 4306-c to require Article 43 corpo-
rations and municipal cooperative health benefit plans certified pursu-
ant to Article 47 that utilize a network of providers to provide access
to out-of-network services.
Section eight amends Insurance Law § 4324 to make the changes outlined
in section one of this bill to Article 43 corporations.
Section nine amends Insurance Law § 4324 to make the changes outlined in
section two of this bill applicable to Article 43 corporations.
Section ten amends Insurance Law § 4324 to define the usual and custom-
ary cost for purposes of this section.
Sections 11, 12, 13, 14 and 15 amend Article 49 of the Insurance Law to
establish a procedure for the review and appeal of denials of out-of-
network referrals.
Section 16 adds Public Health Law § 23-§ 24 requiring physicians to
submit a claim form with a patient bill and requiring care professionals
and hospitals to provide certain disclosures.
Section 17 amends Public Health Law § 4408 to make the same disclosures
detailed in sections one and eight of this bill applicable to HMOs.
Section 18 amends Public Health Law § 4408 make the same changes
provided in sections two and nine of this bill applicable to HMOs.
Section 19 amends Public Health Law § 4408 to define the usual and
customary cost of out-of-network services.
Sections 20, 21, 22, 23 and 24 amend Article 49 of the Public Health Law
to establish a procedure for the review and appeal of denials of out-of-
network referrals.
Section 25 amends the Financial Services Law to establish a new Article
7 to prohibit excessive charges for emergency services. This article
establishes a binding dispute resolution process and criteria for deter-
mining what constitutes excessive charges.
Section 26 provides that this act shall take effect on January 1, 2014,
provided, however, that: 1) policies renewed on and after such date this
act shall take effect on the renewal date; 2) sections 12, 16, 21 and 25
shall apply to health care services provided on and after such date and
section 26 shall be deemed repealed on January 1, 2016; and 3) sections
11, 13, 14, 15, 20, 22, 23 and 24 of this act shall apply to denials
issued on and after such date.
JUSTIFICATION: Some consumers choose health insurance policies that
permit them to receive care from a nonparticipating provider because it
allows them to see the health care provider of their choice. However,
this out-of-network system has been fraught with problems. In February
2008, then Attorney General Andrew M. Cuomo announced an investigation
into a scheme by health insurers to defraud consumers by manipulating
the reasonable and customary rates, As part of this investigation, the
Attorney General announced his intent to file suit against Ingenix, Inc.
(a health care pricing database), subsidiary of United Health Group,
asserting that the rates found in the database were lower than the actu-
al cost of medical expenses. According to the Attorney General, this
allowed health insurance companies to deny a portion of provider claims
inappropriately, thereby pushing costs down to members. In January 2009,
United Health Group reached a settlement with the Attorney General
whereby they agreed to pay S50 million to fund a not-for-profit entity
to develop a new, independent product to replace its database. As a
result, FAIR Health, Inc. was established with the mission of ensuring
transparency in health care costs.
The FAIR Health database is now operational for reporting medical charge
data. However, since the fall of Ingenix, a number of insurers have
begun using Medicare rates as the benchmark for determining reimburse-
ment of out-of-network costs. This often results in what some deem to be
inadequate reimbursement. This legislation is intended to ensure that
the FAIR Health database is appropriately utilized. The New York Times
recently reported an instance in which a patient was billed 52,800 for
half an hour of anesthesia provided by an out-of-network anesthesiolo-
gist during a routine colonoscopy provided by a participating provider.
The Department of Financial Services recently released a report detail-
ing the challenges consumers face with unexpected medical billings. This
legislation would address these concerns by requiring certain disclo-
sures by health care providers, hospitals and insurers to prevent
surprise medical bills. This bill also protects consumers by ensuring
they have adequate access to in-network services, with the capability to
go out-of-network in the event there is no in-network provider.
Furthermore, this legislation protects consumers from excessive charges
for emergency services.
LEGISLATIVE HISTORY: S.7745 of 2012; Passed Senate
FISCAL IMPLICATIONS: None.
EFFECTIVE DATE: This act shall take effect on January 1, 2014 with
certain provisions.
