NY Pub Health L § 4406 (2021)
2021 New York Laws PBH - Public Health Article 44 - Health Maintenance Organizations 4406 - Health Maintenance Organizations; Regulation of Contracts.

§ 4406. Health maintenance organizations; regulation of contracts.  1. The  contract  between a health maintenance organization and an enrollee shall be subject to regulation by the superintendent as  if  it  were  a health  insurance  subscriber  contract,  and  shall include, but not be limited to, all mandated benefits required by article forty-three of the insurance law. Such contract shall fully and clearly state the  benefits and  limitations  therein  provided  or  imposed,  so  as  to facilitate understanding and comparisons, and to exclude provisions  which  may  be misleading  or  unreasonably confusing. Such contract shall be issued to any individual and dependents of such individual and any  group  of  one hundred  or  fewer  employees  or  members,  exclusive  of  spouses  and dependents, or to  any  employee  or  member  of  the  group,  including dependents,  applying for such contract at any time throughout the year. An individual direct payment contract shall be issued only in accordance with section four thousand three hundred twenty-eight of  the  insurance law.  The  superintendent  may, after giving consideration to the public interest, exempt a health maintenance organization from the requirements of  this  section  provided  that  another  health  insurer  or   health maintenance  organization  within  the health maintenance organization's same holding company system,  as  defined  in  article  fifteen  of  the insurance law, including a health maintenance organization operated as a line  of business of a health service corporation licensed under article forty-three of the insurance law, offers coverage that,  at  a  minimum, complies  with this section and provides all of the consumer protections required to be provided by a health maintenance organization pursuant to this chapter  and  regulations,  including  those  consumer  protections contained in sections four thousand four hundred three and four thousand four  hundred  eight-a of this chapter. The requirements shall not apply to a health maintenance  organization  exclusively  serving  individuals enrolled pursuant to title eleven of article five of the social services law,  title  eleven-D  of article five of the social services law, title one-A of article twenty-five of this chapter or title  eighteen  of  the federal  Social  Security  Act,  and, further provided, that such health maintenance  organization  shall  not  discontinue  a  contract  for  an individual  receiving  comprehensive-type  coverage  in  effect prior to January first, two thousand four who is ineligible to purchase  policies offered  after  such  date  pursuant  to  this  section  or section four thousand three hundred twenty-eight of the  insurance  law  due  to  the provision  of  42  U.S.C.  1395ss  in effect prior to January first, two thousand four.   2.  (a)  Upon  approval  of  the  commissioner,  an  organization  may implement  an  out-of-plan  benefits system that allows enrollees to use providers  not  participating  in  the  plan  pursuant  to  a  contract, employment  or other association. The commissioner, in consultation with the superintendent, shall not approve an organization  to  implement  an out-of-plan benefits system unless the organization demonstrates that:  (i)  the  requirements of this article and any regulations promulgated thereunder have been met and will continue to be met;  (ii) it can establish and maintain a contingent reserve  fund  of  not less  than two percent of the entire net premium income for the calendar year of the organization in addition to  any  other  contingent  reserve fund required by the commissioner in regulations subject to the approval of the superintendent; and  (iii)  it  has established mechanisms to ensure and monitor compliance with the provisions of paragraph (b) of this subdivision.  (b) Except as provided  in  paragraph  (c)  of  this  subdivision,  an organization  may  not  permit  the  benefits  provided pursuant to such out-of-plan system to exceed  ten  percent  of  the  total  health  care  expenditures  of  the  organization, as determined on a quarterly basis, but such  limitation  shall  not  apply  to  individual  direct  payment contracts  issued  pursuant to section forty-three hundred twenty-two of the  insurance  law.  In  determining the amount of benefits provided in connection with the use of such providers,  an  organization  shall  not include benefits provided pursuant to a referral made by a participating provider or benefits provided in emergency situations.  (c)  An  organization  may  exceed  the ten percent level by up to two percent in any given quarter provided that  the  organization  does  not exceed the ten percent level by the end of the following quarter.  (d)  If the commissioner determines that an organization has permitted the benefits provided pursuant to an out-of-plan system  to  exceed  ten percent,   except   as  permitted  by  paragraph  (b)  or  (c)  of  this subdivision,  the  commissioner  may,  where  appropriate,   assess   an organization  a  civil  penalty  not  to exceed the amount determined by multiplying the percentage permitted in excess of  ten  percent  by  the amount, in dollars, of the difference between what the organization paid all  inpatient  hospitals for such year and the amount such organization would have paid such hospitals had it been a payor within the categories specified in paragraph (b) of subdivision one  of  section  twenty-eight hundred seven-c of this chapter and not authorized to negotiate hospital rates.  The  commissioner,  in consultation with the superintendent, may revoke, suspend or limit an approval issued pursuant to this subdivision for non-compliance by the organization with any  of  the  provisions  of this article or the rules and regulations promulgated thereunder.  (e)   The   indemnification   of   enrollees  of  the  services  of  a non-participating provider may be  subject  to  deductibles,  copayments and/or coinsurance approved by the superintendent.  (f)  Nothing  in  this  subdivision  shall  be  construed  to limit an organization's ability to manage the care of enrollees or the  types  of health  services  covered,  to  conduct  utilization  review  of quality assurance activities.  (g) The commissioner may prohibit an organization determined  to  have an  inadequate  network  of  participating providers from permitting new elections pursuant to this subdivision as of the date of notification of such determination by the  commissioner.  Notification  of  such  action shall be given by the organization to each enrollee.  (h)  An organization providing comprehensive health services under one or more assumed names shall be deemed to be offering its plan through  a line   of   business   corresponding  to  each  such  assumed  name.  An organization may, pursuant to the provisions of this subdivision, permit enrollees of one or more lines of business to elect to receive  services from  providers  not  participating  in  such  line or lines of business provided, however, that with respect  to  each  line  of  business  such elections  shall  be permitted only to the extent authorized pursuant to paragraphs (b) and (c) of this subdivision.  (i) Nothing herein shall be deemed to prohibit  a  health  maintenance organization  from  offering  services  in  connection  with  a  company appropriately licensed pursuant to the insurance law.   3. (a) No contract issued pursuant to this section shall provide  that services  of  a participating hospital will be covered as out-of-network services solely on the basis that the health care provider admitting  or rendering services to the enrollee is not a participating provider.  (b)  No  contract  issued  pursuant to this section shall provide that services of a participating health care  provider  will  be  covered  as out-of-network  services  solely  on  the  basis  that  the services are rendered in a non-participating hospital.  (c) For purposes of this subdivision, a "health care  provider"  is  a health  care  professional licensed, registered or certified pursuant to title  eight  of  the  education  law  or  a  health  care  professional comparably licensed, registered or certified by another state.   4.  Nothing  in  this  section  shall be construed to require a health maintenance organization in its  provision  of  a  comprehensive  health services plan to meet the requirements of an insurer under the insurance law.   5.  If  an  enrollee  requires  nursing  facility  placement  and is a resident of a continuing  care  retirement  community  authorized  under article   forty-six   of  this  chapter,  the  enrollee's  primary  care practitioner  must  refer  the  enrollee  to  that  community's  nursing facility  if  medically  appropriate;  if  the  facility  agrees  to  be reimbursed  at  the  health  maintenance  organization's  contract  rate negotiated  with similar providers for similar services and supplies, or negotiates a mutually agreed upon rate; and if the  facility  meets  the health  maintenance  organization's  guidelines  and  standards  for the delivery of medical services.