Proud to serve New York State’s 

Not-For-Profit Hospitals, Health Systems, 

and Continuing Care Providers

Daniel Sisto, President

2010 BOARD OF TRUSTEES

OFFICERS

Chairman

JOSEPH QUAGLIATA    Oceanside 

Chairman­Elect

HERBERT PARDES, M.D.    New York 

Secretary

JOSEPH MCDONALD    Buffalo 

Treasurer

LINDA BRADY, M.D.    Buffalo 

Immediate Past Chairman

DAVID KRUCZLNICKI    Glens Falls 

Past Chairmen

MICHAEL DOWLING    Great Neck 

STEVEN GOLDSTEIN     ochester  R

STANLEY BREZENOFF    New York 

.

FORMER CHAIRS

GLADYS GEORGE,  SQ.   E   New York 

JON SCHANDL R   E   White Plains 

JOHN SPICER    New Rochelle

CLASS OF 2010

C. WILLIAM BROWN    Rochester 

THOMAS CARM N   A   Watertown 

JOAN CONBOY    Little Falls 

SAMUEL DANIEL, M.D.    New York 

WENDY GOLDSTEIN    Brooklyn 

JAMES HARDEN    Rockville Centre 

ANNETTE LEAHY    Newark 

JOEL SELIGMAN    Mount Kisco 

WILLIAM STRECK, M.D.    Cooperstown 

BETSY WRIGHT    Jamestown

CLASS OF 2011

ALLAN ATZROTT    Newburgh 

JAMES BARBA, J.D.    Albany 

CHARLES FAHD II    Massena 

LINDA FARCHIONE    Canandaigua 

ELI FELDMAN    Brooklyn 

DAVID FELTON    Hamilton 

RICHARD HAWKS    Canandaigua 

RONALD KRAWIEC    Warsaw 

D. ROBERT MACKE IE, M.D.   NZ   Ithaca 

JEFFREY MENKES    New York 

STEPHEN MILLS    Flushing 

GINO PAZZAGLINI    Troy 

JAMES REED, M.D.    Troy 

CLASS OF 2012

PAMELA BRIER    Brooklyn 

SCOTT COOPER, M.D.    Bronx 

ANDREW LITT, M.D.    New York 

ALAN MORSE, J.D.,Ph.D.    New York 

STEPHENS MUNDY    New York 

THOMAS OCKERS    Patchogue 

THEODORE PAS NSKI   I   Syracuse 

DAVID ROSEN    Jamaica 

SARAH SCHERMERHORN    Schenectady 

August 27, 2010 

The Honorable Kathleen Sebelius 

Secretary Secretary 

U.S. Departm U.S. Department of Health and Human Services ent of Health and Human Services 

200 Independence Avenue, SW 

Washington, DC 20201 

Re: OCIIO-9994-IFC, Requirements for Group Health Plans and Health 

Insurance Issuers Under the Patient Protection and Affordable Care Act 

Relating to Preexisting Condition Exclusions, Lifetime and Annual Limits, 

Rescissions, and Patient Protections; Final Rule and Proposed Rule 

Re: OCIIO-9994-IFC, Requirements for Group Health Plans and Health 

Insurance Issuers Under the Patient Protection and Affordable Care Act 

Relating to Preexisting Condition Exclusions, Lifetime and Annual Limits, 

Rescissions, and Patient Protections; Final Rule and Proposed Rule 

Dear Secretary Sebelius: 

The Healthcare Association of New York State (HANYS), the only statewide 

hospital and continuing care association in New York State, representing more 

than 550 non-profit and public hospitals, nursing homes, home care agencies, and 

other health care organizations, submits this letter in response to the Department 

of Health and Human Services’ (HHS) request for comments regarding

Requirements for Group Health Plans and Health Insurance Issuers Under the 

Patient Protection and Affordable Care Act (PPACA) Relating to Preexisting 

Condition Exclusions, Lifetime and Annual Limits, Rescissions, and Patient 

Protections; Final Rule and Proposed Rule.

The Healthcare Association of New York State (HANYS), the only statewide 

hospital and continuing care association in New York State, representing more 

than 550 non-profit and public hospitals, nursing homes, home care agencies, and 

other health care organizations, submits this letter in response to the Department 

of Health and Human Services’ (HHS) request for comments regarding

Requirements for Group Health Plans and Health Insurance Issuers Under the 

Patient Protection and Affordable Care Act (PPACA) Relating to Preexisting 

Condition Exclusions, Lifetime and Annual Limits, Rescissions, and Patient 

Protections; Final Rule and Proposed Rule.

HANYS’ comments specifically address the patient protections outlined in the 

interim final regulations designed to establish a minimum level of compensation 

to be paid by insurers to non-participating providers for emergency services. The 

interim final regulations would require insurers to pay an amount equal to the 

greatest of three possible amounts: (1) the amount negotiated with in-network 

providers for the emergency service furnished (45 CFR 147.138(b)(3)(i)(A)); (2) 

the amount calculated by the same method the plan generally uses to determine 

payments for out-of-network services (such as the usual, customary, and 

reasonable (UCR) charge) (45 CFR 147.138(b)(3)(i)(B)); or (3) the amount that 

would be paid under Medicare for the emergency service (45 CFR 

147.138(b)(3)(i)(C)). 

HANYS’ comments specifically address the patient protections outlined in the 

interim final regulations designed to establish a minimum level of compensation 

to be paid by insurers to non-participating providers for emergency services. The 

interim final regulations would require insurers to pay an amount equal to the 

greatest of three possible amounts: (1) the amount negotiated with in-network 

providers for the emergency service furnished (45 CFR 147.138(b)(3)(i)(A)); (2) 

the amount calculated by the same method the plan generally uses to determine 

payments for out-of-network services (such as the usual, customary, and 

reasonable (UCR) charge) (45 CFR 147.138(b)(3)(i)(B)); or (3) the amount that 

would be paid under Medicare for the emergency service (45 CFR 

147.138(b)(3)(i)(C)). 

MAIN HEADQUARTERS: One Empire Drive / Rensselaer, New York 12144 / (518) 431-7600 / fax (518) 431-7915 / www.hanys.org

WASHINGTON, D.C. OFFICE: 499 South Capitol Street SW, Suite 405 / Washington, D.C. 20003 / (202) 488-1272 / fax (202) 488-1274 
HANYS recognizes the importance of trying to find a method to help insurers determine a 

reasonable reimbursement rate for emergency services, but we have significant concerns that the 

provisions outlined in 45 CFR 147.138(b)(3)(i) will have the unintended consequences of 

creating a default rate, potentially and significantly undermining the purpose of contracting to 

form networks (and a primary reason that underpaid providers choose to leave networks), 

limiting plan liability at an artificially low level, and leaving consumers vulnerable to 

unexpectedly large balance bills. 

The first and third alternatives set forth in the regulation would respectively require insurers to 

pay out-of-network providers either the same amount as that negotiated with in-network 

providers or the Medicare rate for the emergency service provided. Essentially both of these 

provisions would create a default rate, although it does not appear that the Patient Protection and 

Affordable Care Act grants HHS the statutory authority necessary to set such rates. Moreover, 

many health care providers argue persuasively that the very reason for leaving networks is 

dissatisfaction with the rates paid to participating providers. 

If insurers are able to pay out-of-network providers a default rate, at least three undesirable 

things may result: insurers will have no incentive to form networks, providers will lose any 

limited leverage they may have to “vote with their feet” when confronted with an unfair contract 

and rates will be forced even lower for participating providers. Consumers, however, are 

potentially the biggest losers as they may be asked to close what will be a growing gap between 

the “default” payment rate and the emergency providers’ expectations. 

While we understand the logic behind the proposed rule and its intent to require that insurers pay 

a reasonable amount to health care providers for emergency services before patients are held 

responsible for the balance, recent history suggests that neither the concept of a default rate nor 

the other proposed alternative—to pay out-of-network providers the UCR rate for emergency 

services—is a viable option. 

The second alternative set forth in the rule, to use the same method the plan generally uses to 

determine payments for out-of-network services, UCR, is disconcerting to us because no reliable 

database currently exists to calculate UCR rates. The only widely used database, Ingenix, is a 

wholly owned subsidiary of UnitedHealthCare, and has been under investigation and attack by 

law enforcement and involved in private litigations. 

It has been a long held belief in the provider community that the Ingenix database routinely 

undervalued UCR rates. It was therefore no surprise to providers that New York Attorney 

General Andrew Cuomo accused Ingenix of operating “a defective and manipulated database 

that most major health insurance companies use to set reimbursement rates for out-of-network 

medical expenses.” 

MAIN HEADQUARTERS: One Empire Drive / Rensselaer, New York 12144 / (518) 431-7600 / fax (518) 431-7915 / www.hanys.org

WASHINGTON, D.C. OFFICE: 499 South Capitol Street SW, Suite 405 / Washington, D.C. 20003 / (202) 488-1272 / fax (202) 488-1274 
Mr. Cuomo’s investigation quickly led to numerous multi-million dollar settlements with 

insurers who had relied upon the database. A portion of the settlement monies are to be used to 

fund an independent not-for-profit database through FAIR Health, Inc., to properly and 

transparently calculate UCR rates. But this database does not yet exist. It is premature to 

finalize a rule that must rely on calculating UCR rates using a methodology that is flawed, at 

best. 

While HANYS agrees that finding a methodology to determine reasonable compensation for 

non-participating providers rendering emergency services for plan members is important, given 

the concerns articulated herein, we prefer an approach that focuses on a “process,” and not on 

default rates. In this regard, we have suggested to the regulators in New York that “baseball 

arbitration,” or some similar method, is a more viable solution. 

Therefore, we respectfully request that you abandon the provisions outlined in 45 CFR 

147.138(b)(3)(i) so that non-participating providers are fairly compensated for furnishing 

emergency services. HANYS fears that the interim final regulations, as written, will 

disincentivize payers from engaging in good faith negotiations with providers, resulting in 

unreasonable payments for emergency services rendered by out-of-network providers and large 

balance bills for consumers. 

If you have questions about our comments, please contact Jeffrey Gold, Vice President, Managed 

Care and Special Counsel, at (518) 431-7730. 

Sincerely, 

Daniel Sisto 

President 

DS:jg 

MAIN HEADQUARTERS: One Empire Drive / Rensselaer, New York 12144 / (518) 431-7600 / fax (518) 431-7915 / www.hanys.org

WASHINGTON, D.C. OFFICE: 499 South Capitol Street SW, Suite 405 / Washington, D.C. 20003 / (202) 488-1272 / fax (202) 488-1274