2023 New York Laws › ISC - Insurance › Article 32 - Insurance Contracts - Life, Accident and Health, Annuities › 3224-A - Standards for Prompt, Fair and Equitable Settlement of Claims for Health Care and Payments for Health Care Services.

§  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
agreements issued or entered into pursuant to this article and  articles
forty-two,  forty-three  and  forty-seven  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 or forty-seven 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
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 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 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 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 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
eligibility of a person for coverage, the liability of  another  insurer
or  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
organization  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, and through the
internet or other electronic means for claims submitted in that  manner,
within thirty calendar days of the receipt of the claim:
(1) whether the claim or bill has been denied or partially approved;
(2)  which  claim  or  medical payment that it is not obligated to pay
stating the specific reasons why it is not liable; and
(3)  to  request  all  additional  information  needed  to   determine
liability to pay the claim or make the health care payment; and
(4)  of  the  specific  type  of  plan  or product the policyholder or
covered person is enrolled in; provided that  nothing  in  this  section
shall authorize discrimination based on the source of payment.
Upon  receipt  of the information requested in paragraph three of this
subsection or an appeal of a claim or  bill  for  health  care  services
denied  pursuant  to  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; provided, that  if
the  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 determines that payment or
additional payment is due on the claim, such payment shall  be  made  to

the  policyholder  or  covered  person  or  health  care provider within
fifteen days of the determination. Any denial  or  partial  approval  of
claim  or  payment  and  the specific reasons for such denial or partial
approval pursuant to this subsection shall be prominently displayed on a
written  notice  with  at least twelve-point type. A partial approval of
claim or payment shall state at the top of such written notice  with  at
least  fourteen-point  type bold: "NOTICE OF PARTIAL APPROVAL OF MEDICAL
COVERAGE". A denial of claim or payment shall state at the top  of  such
written notice with at least fourteen-point type bold: "NOTICE OF DENIAL
OF  MEDICAL  COVERAGE".  Any  additional terms or conditions included on
such notice of partial approval or such notice of denial,  such  as  but
not limited to time restraints to file an appeal, shall be included with
at least twelve-point type.
(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
penalties provided 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  two  dollars,  and  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
superintendent 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  corporation   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  resulting  from  individual
complaints  submitted  to the superintendent by health care providers or
policyholders.
(d) For the purposes of this section:
(1) "policyholder" shall mean a person covered under such policy or  a
representative designated by such person;
(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  or
thirty-one of the mental hygiene law, a  fiscal  intermediary  operating
under  section  three  hundred  sixty-five of the social services law, a
health care professional licensed, registered or certified  pursuant  to
title   eight   of  the  education  law,  a  dispenser  or  provider  of
pharmaceutical products, services or durable  medical  equipment,  or  a
representative designated by such entity or person;
(3) "plan or product" shall mean:
(i)  Medicaid  coverage  provided  pursuant  to  section three hundred
sixty-four-j of the social services law;
(ii) a child health  insurance  plan  certified  pursuant  to  section
twenty-five hundred eleven of the public health law;
(iii)  basic  health  program  coverage  certified pursuant to section
three hundred sixty-nine-gg of the social services  law,  including  the
specific rating group the policyholder or covered person is enrolled in;
(iv) coverage purchased on the New York insurance exchange established
pursuant  to section two hundred sixty-eight-b of the public health law;
and
(v) any other  comprehensive  health  insurance  coverage  subject  to
article  thirty-two,  forty-three,  or  forty-seven  of this chapter, or
article forty-four of the public health law; and
(4)  "emergency  services"  shall  have  the  meaning  set  forth   in
subparagraph  (D)  of  paragraph nine of subsection (i) of section three
thousand two hundred  sixteen  of  this  article,  subparagraph  (D)  of
paragraph  four  of subsection (k) of section three thousand two hundred
twenty-one of this article and subparagraph  (D)  of  paragraph  two  of
subsection  (a)  of  section  four  thousand three hundred three of this
chapter.
(e) 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
pursuant to title 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) 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 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
benefits  under  the  New  York  state  small  business health insurance
partnership program pursuant to article nine-A of the public health law,
it shall be  a  mitigating  factor  that  the  insurer,  corporation  or
organization is owed any premium amounts, premium adjustments, stop-loss
recoveries  or  other  payments  from  the  state  or  one of its fiscal
intermediaries under any such program.
(g) Time period for submission of  claims.  (1)  Except  as  otherwise
provided  by  law,  health  care  claims  must be initially submitted by
health care providers within one hundred twenty days after the  date  of
service  to  be valid and enforceable against an insurer or organization
or corporation licensed or certified pursuant to article forty-three  or
article  forty-seven of this chapter or article forty-four of the public
health law. Provided, however, that nothing  in  this  subsection  shall
preclude the parties from agreeing to a time period or other terms which
are  more  favorable to the health care provider. Provided further that,
in connection  with  contracts  between  organizations  or  corporations
licensed or certified pursuant to article forty-three of this chapter or
article  forty-four  of  the public health law and health care providers
for  the  provision  of  services  pursuant  to  section  three  hundred
sixty-four-j  or  three hundred sixty-nine-ee of the social services law
or title I-A of article twenty-five of the public  health  law,  nothing
herein  shall  be deemed: (i) to preclude the parties from agreeing to a
different time period but in no event less than ninety days; or (ii)  to

supersede  contract  provisions in existence at the time this subsection
takes effect except to the extent that  such  contracts  impose  a  time
period of less than ninety days.
(2)  This  subsection  shall not abrogate any right or reduce or limit
any additional time period for  claim  submission  provided  by  law  or
regulation specifically applicable to coordination of benefits in effect
prior to the effective date of this subsection.
(h)  (1)  An  insurer  or  organization  or  corporation  licensed  or
certified pursuant to article forty-three or article forty-seven of this
chapter or article forty-four of the public health law  shall  permit  a
participating health care provider to request reconsideration of a claim
that is denied exclusively because it was untimely submitted pursuant to
subsection   (g)  of  this  section.  The  insurer  or  organization  or
corporation shall pay such claim pursuant to the provisions of paragraph
two of this subsection if the health care provider can demonstrate  both
that:  (i)  the health care provider's non-compliance was a result of an
unusual occurrence; and (ii) the health care provider has a  pattern  or
practice  of timely submitting claims in compliance with subdivision (g)
of this section.
(2) An insurer or organization or corporation  licensed  or  certified
pursuant  to  article forty-three or article forty-seven of this chapter
or  article  forty-four  of  the  public  health  law  may  reduce   the
reimbursement  due  to a health care provider for an untimely claim that
otherwise meets the requirements of paragraph one of this subsection  by
an  amount  not  to  exceed twenty-five percent of the amount that would
have been paid  had  the  claim  been  submitted  in  a  timely  manner;
provided,  however,  that  nothing  in  this subsection shall preclude a
health care provider and an insurer or organization or corporation  from
agreeing  to a lesser reduction. The provisions of this subsection shall
not apply to any claim submitted three hundred sixty-five days after the
date  of  service,  in  which  case  the  insurer  or  organization   or
corporation may deny the claim in full.
(i)  Except  where  the  parties have developed a mutually agreed upon
process for the reconciliation of coding disputes that includes a review
of submitted  medical  records  to  ascertain  the  correct  coding  for
payment,  a  general hospital certified pursuant to article twenty-eight
of the public health law shall, upon receipt of payment of a  claim  for
which  payment  has  been  adjusted  based  on  a particular coding to a
patient including the assignment of diagnosis and  procedure,  have  the
opportunity to submit the affected claim with medical records supporting
the hospital's initial coding of the claim within thirty days of receipt
of  payment.  Upon  receipt  of  such  medical records, 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 shall review such information to ascertain the correct
coding for payment based on national coding guidelines accepted  by  the
centers  for  Medicare  and  Medicaid  services  or the American medical
association, to the extent there are codes for such services,  including
ICD-10  guidelines  to  the  extent  available,  and  process the claim,
including the correct coding, in  accordance  with  the  timeframes  set
forth  in  subsection  (a)  of  this  section. In the event the insurer,
organization, or corporation processes the  claim  consistent  with  its
initial determination, such decision shall be accompanied by a statement
of  the  insurer, organization or corporation setting forth the specific
reasons  why  the  initial  adjustment  was  appropriate.  An   insurer,
organization,  or  corporation  that  increases the payment based on the
information submitted by the general hospital, shall pay to the  general
hospital  interest on the amount of such increase at 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, to be computed from the  date  thirty  days  after  initial
receipt  of  the  claim if transmitted electronically or forty-five days
after initial receipt of the claim if transmitted by paper or facsimile.
Provided,  however,  a  failure  to  remit  timely  payment  shall   not
constitute   a  violation  of  this  section.  Neither  the  initial  or
subsequent processing of the claim  by  the  insurer,  organization,  or
corporation  shall  be  deemed  an  adverse  determination as defined in
section four thousand nine hundred of this chapter if based solely on  a
coding  determination.  Nothing  in this subsection shall apply to those
instances in which the insurer or organization,  or  corporation  has  a
reasonable suspicion of fraud or abuse or when an insurer, organization,
or  corporation  engages  in reasonable fraud, waste and abuse detection
efforts;  provided,  however,  to  the  extent  any  subsequent  payment
adjustments are made as a result of the fraud, waste and abuse detection
processes  or  efforts,  such payment adjustments shall be consistent on
the coding guidelines required by this subsection.
(j) 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 or a student health plan
established or maintained pursuant to section one thousand  one  hundred
twenty-four   of  this  chapter  shall  accept  claims  submitted  by  a
policyholder or  covered  person,  in  writing,  including  through  the
internet, by electronic mail or by facsimile.
(k)  The  superintendent,  in  conjunction  with  the  commissioner of
health,  shall  convene  a  health  care  administrative  simplification
workgroup.  The  workgroup  shall consist of stakeholders, including but
not limited to, insurers, hospitals, physicians and consumers  or  their
representatives,  to study and evaluate mechanisms to reduce health care
administrative   costs   and   complexities   through   standardization,
simplification  and  technology.  Areas  to be examined by the workgroup
shall  include  claims  submission  and  payment,  claims   attachments,
preauthorization    practices,    provider    credentialing,   insurance
eligibility verification, and access to electronic medical records.  The
workgroup  shall  report  on  its  findings  and  recommendations to the
superintendent, the commissioner of health, the speaker of the  assembly
and  the temporary president of the senate within eighteen months of the
effective date of this subsection.
* (l)  Payments  to  nonparticipating  or  nonpreferred  providers  of
ambulance  services  licensed  under article thirty of the public health
law. (1) Whenever 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 provides that any
health  care  claims  submitted  under contracts or agreements issued or
entered into pursuant to this article or article forty-two,  forty-three
or  forty-seven  of  this  chapter  and article forty-four of the public
health law are payable to  a  participating  or  preferred  provider  of
ambulance  services for services rendered, the insurer, 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 be required to  pay  such  benefits  either  directly  to  any
similarly  licensed  nonparticipating  or  nonpreferred  provider at the
usual  and  customary  charge,  which  shall   not   be   excessive   or
unreasonable,  when the provider has rendered such services, has on file
a duly executed assignment of benefits, and has caused  notice  of  such
assignment  to  be  given  to  the insurer, 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 or jointly
to such nonparticipating or nonpreferred provider and  to  the  insured,
subscriber,  or  other covered person; provided, however, that in either
case  the  insurer,  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 be required to send
such benefit payments directly to the provider who has the assignment on
file. When payment is made directly to a provider of ambulance  services
as authorized by this section, the insurer, 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  give
written  notice  of  such  payment  to the insured, subscriber, or other
covered person.
(2)  An  insurer  shall  provide  reimbursement  for  those   services
prescribed  by  this section at rates negotiated between the insurer and
the provider of such services. In the absence of agreed upon  rates,  an
insurer  shall  pay for such services at the usual and customary charge,
which shall not be excessive or unreasonable.
(3) Nothing contained in this section shall be deemed to prohibit  the
payment  of  different  levels of benefits or from having differences in
coinsurance  percentages  applicable  to  benefit  levels  for  services
provided by participating or preferred providers and nonparticipating or
nonpreferred providers.
The provisions of this section shall not apply to policies that do not
include coverage for ambulance services.
* NB Effective January 1, 2025