2023 New York Laws › PBH - Public Health › Article 44 - Health Maintenance Organizations › 4406-C - Prohibitions.

§  4406-c. Prohibitions. 1. For purposes of this section, "health care
plan" shall mean a health maintenance organization licensed pursuant  to
article  forty-three  of the insurance law or certified pursuant to this
article or an independent practice association certified  or  recognized
pursuant to this article or a medical group.
2.  No health care plan shall by contract or written policy or written
procedure prohibit or restrict any health care provider from  disclosing
to  any  subscriber,  enrollee,  patient,  designated representative or,
where  appropriate,  prospective  enrollee,  (hereinafter   collectively
referred  to  as  enrollee)  any  information  that  such provider deems
appropriate regarding:
(a) a condition or a course of treatment with  an  enrollee  including
the availability of other therapies, consultations, or tests; or
(b)  the  provisions, terms, or requirements of the health care plan's
products as they relate to the enrollee, where applicable.
3. No health care plan shall  by  contract,  written  policy,  written
procedure or practice prohibit or restrict any health care provider from
filing  a  complaint,  making  a  report or commenting to an appropriate
governmental body regarding the policies or  practices  of  such  health
care  plan  which  the  provider believes may negatively impact upon the
quality of, or access to, patient care. Nor shall  a  health  care  plan
take  any adverse action, including but not limited to refusing to renew
or execute a contract or  agreement  with  a  health  care  provider  as
retaliation  against  a  health  care  provider  for filing a complaint,
making a report  or  commenting  to  an  appropriate  governmental  body
regarding  policies  or  practices  of  such  health care plan which may
violate this chapter or the insurance law including subsection (g), (k),
(l), (l-1)  or  (1-2)  of  section  forty-three  hundred  three  of  the
insurance law.
4.  No  health  care plan shall by contract, written policy or written
procedure prohibit or restrict any health care provider from  advocating
to  the  health  care  plan  on  behalf  of the enrollee for approval or
coverage of a particular course of treatment or  for  the  provision  of
health care services.
5.  No  contract  or agreement between a health care plan and a health
care provider shall contain any clause purporting  to  transfer  to  the
health  care provider, other than a medical group, by indemnification or
otherwise any liability relating to activities, actions or omissions  of
the health care plan as opposed to those of the health care provider.
5-a.  Contracts entered into between a plan and a health care provider
shall include terms which prescribe:
(a) the  method  by  which  payments  to  a  provider,  including  any
prospective or retrospective adjustments thereto, shall be calculated;
(b) the time periods within which such calculations will be completed,
the  dates  upon  which  any  such  payments  and  adjustments  shall be
determined to be due, and the dates upon which  any  such  payments  and
adjustments will be made;
(c)  a  description  of  the  records  or  information  relied upon to
calculate any such payments and adjustments, and a  description  of  how
the provider can access a summary of such calculations and adjustments;
(d)  the  process  to  be  employed  to resolved disputed incorrect or
incomplete records or information and to adjust any  such  payments  and
adjustments  which have been calculated by relying on any such incorrect
or incomplete records or information and to adjust any such payments and
adjustments which have been calculated by relying on any such  incorrect
or  incomplete  records  or  information so disputed; provided, however,
that nothing  herein  shall  be  deemed  to  authorize  or  require  the
disclosure of personally identifiable patient information or information

related  to  other  individual  health  care  providers  or  the  plan's
proprietary data collection systems, software or  quality  assurance  or
utilization review methodologies; and
(e)  the right of either party to the contract to seek resolution of a
dispute arising pursuant to the payment terms of such contract through a
proceeding under article seventy-five of  the  civil  practice  law  and
rules.
5-b.  No  contract  entered  into  with health care providers shall be
enforceable if it  includes  terms  which  transfer  financial  risk  to
providers, in a manner inconsistent with the provisions of paragraph (c)
of  subdivision one of section forty-four hundred three of this article,
or penalize providers for unfavorable case mix so as to  jeopardize  the
quality  of  or  enrollees'  appropriate  access  to medically necessary
services; provided, however, that payment at less  than  prevailing  fee
for  service  rates  or capitation shall not be deemed or presumed prima
facie to jeopardize quality or access.
5-c. (a) No health care plan shall implement an adverse  reimbursement
change  to  a contract with a health care professional that is otherwise
permitted by the contract, unless, prior to the effective  date  of  the
change,  the  health  care  plan gives the health care professional with
whom the health care plan has directly contracted and who is impacted by
the adverse reimbursement change, at least ninety days written notice of
the change. If the contracting health care professional objects  to  the
change  that  is  the subject of the notice by the health care plan, the
health care professional may, within thirty days  of  the  date  of  the
notice,  give written notice to the health care plan to terminate his or
her contract with the health care plan effective upon the implementation
date of the adverse reimbursement  change.  For  the  purposes  of  this
subdivision,  the  term  "adverse  reimbursement  change"  shall  mean a
proposed change that could reasonably be expected  to  have  a  material
adverse  impact  on  the  aggregate  level  of  payment to a health care
professional, and the term  "health  care  professional"  shall  mean  a
health  care  professional licensed, registered or certified pursuant to
title eight of the education law. The notice provisions required by this
subdivision shall not apply where: (i) such change is otherwise required
by law, regulation or applicable regulatory authority, or is required as
a result of changes  in  fee  schedules,  reimbursement  methodology  or
payment  policies  established by a government agency or by the American
Medical  Association's  current  procedural  terminology  (CPT)   codes,
reporting  guidelines  and conventions; or (ii) such change is expressly
provided for under the terms of the contract  by  the  inclusion  of  or
reference  to  a specific fee or fee schedule, reimbursement methodology
or payment policy indexing mechanism.
(b) Nothing in this subdivision shall create a private right of action
on behalf of a health care professional against a health care  plan  for
violations of this subdivision.
* 5-d.  If  a contract between a plan and a hospital is not renewed or
is terminated by either party, the parties shall continue  to  abide  by
the  terms of such contract, including reimbursement terms, for a period
of two months from the effective date of termination or, in the case  of
a  non-renewal,  from  the  end  of the contract period. Notice shall be
provided to all enrollees potentially affected by  such  termination  or
non-renewal  within  fifteen  days  after  commencement of the two-month
period. The commissioner shall have the authority to waive the two-month
period upon the request of either party to  a  contract  that  is  being
terminated  for  cause.  This  subdivision  shall  not  apply where both
parties mutually agree in writing to the termination or non-renewal  and

the plan provides notice to the enrollee at least thirty days in advance
of the date of contract termination.
* NB Repealed June 30, 2025
5-e.  At  least  sixty  days  prior  to  the termination of a contract
between a hospital and a health care plan, the parties shall  utilize  a
mutually  agreed  upon  mediator  to assist in resolving any outstanding
contractual issues. The results of the mediation shall not be binding on
the parties.
6. No health care plan which provides coverage for prescription  drugs
shall require, or enter into a contract which permits, a copayment which
exceeds the usual and customary cost of such prescribed drug.
* 7.  No  health  maintenance organization which provides coverage for
prescription  drugs  and  for   which   cost-sharing,   deductibles   or
co-insurance  obligations  are  determined  by  category of prescription
drugs shall impose cost-sharing, deductibles or co-insurance obligations
for  any  prescription  drug  that  exceeds   the   dollar   amount   of
cost-sharing,  deductibles or co-insurance obligations for non-preferred
brand  drugs  or  its  equivalent  (or  brand  drugs  if  there  is   no
non-preferred brand drug category).
* NB There are 2 sub 7's
* 7.  Any  contract  provision, written policy or written procedure in
violation of this section shall be deemed to be void and unenforceable.
* NB There are 2 sub 7's
8. (a) No health care  plan  shall  by  contract,  written  policy  or
procedure,  or  by  any  other means, deny payment to a general hospital
certified pursuant to article twenty-eight of this chapter for  a  claim
for  medically  necessary  inpatient  services, observation services, or
emergency department services provided by a general hospital  solely  on
the  basis  that  the  general  hospital  did  not  comply  with certain
administrative requirements of such health care  plan  with  respect  to
those services.
(b)  Nothing in this subdivision shall preclude a general hospital and
a health care plan from agreeing to certain administrative  requirements
relating  to  payment  for  inpatient services, observation services, or
emergency department services, including, but  not  limited  to,  timely
notification  that  medically  necessary  inpatient  services  have been
provided and to reductions in payment for failure to comply with certain
administrative requirements  including  timely  notification;  provided,
however  that:  (i) any requirement for timely notification must provide
for a reasonable extension of timeframes for notification  for  services
provided  on  weekends or federal holidays, (ii) any agreed to reduction
in payment for failure to meet  administrative  requirements,  including
timely  notification  shall not exceed seven and one-half percent of the
payment amount otherwise due for the service  provided,  and  (iii)  any
agreed  to  reduction  in  payment  for  failure  to meet administrative
requirements including timely notification shall not be imposed  if  the
patient's  coverage  could  not  be  determined  by  the  hospital after
reasonable efforts at the time the services were provided.
(c) The provisions of this subdivision shall not apply to  the  denial
of  a  claim:  (i) based on a reasonable belief of a health care plan of
fraud or intentional misconduct  resulting  in  a  misrepresentation  of
patient  diagnosis  or  the  services provided, or abusive billing; (ii)
when required by a state or federal government program or coverage  that
is  provided  by  this state or a municipality thereof to its respective
employees, retirees or members; (iii) that is a duplicate  claim,  is  a
claim  submitted  late  pursuant to subsection (g) of section thirty-two
hundred twenty-four-a of the insurance law, or is  for  services  for  a
benefit  that  is  not  covered  under  the  insured's contract or for a

patient determined to be ineligible for coverage;  (iv)  except  in  the
case  of  medically  necessary  inpatient  services  resulting  from  an
emergency admission,  where  there  is  not  an  existing  participating
provider agreement between a health care plan and a general hospital; or
(v)  where  the  hospital  has  repeatedly  and systematically, over the
previous twelve month period, failed to  seek  prior  authorization  for
services for which prior authorization was required.
(d)  For purposes of this subdivision, an "administrative requirement"
shall not include requirements: (i) imposed on a  health  care  plan  or
provider  pursuant to federal or state laws, regulations or guidance; or
(ii) established by the state or federal government applicable to health
care plans  offering  benefits  under  a  state  or  federal  government
program.
(e) The prohibition on denials set forth in this subdivision shall not
apply  to  claims  for services for which a request for preauthorization
was denied by the health care plan prior to delivery of the service.
9. A  health  care  plan  shall  not  require  a  prior  authorization
determination for services provided in a neonatal intensive care unit of
a  general  hospital  certified pursuant to article twenty-eight of this
chapter. Nothing in this subdivision shall prohibit a health  care  plan
from  denying a claim for such services if the services are subsequently
determined not medically necessary.
10. (a) Any contract or other arrangement entered  into  by  a  health
care  plan  for  the  provision  and  administration of pharmacy benefit
management services on behalf of individuals enrolled in a managed  care
provider, as defined in section three hundred sixty-four-j of the social
services law, shall be based on a pass-through pricing model and include
the following requirements:
(i)  Payment  to  the  pharmacy  benefit  manager for pharmacy benefit
management services shall be limited to  the  actual  ingredient  costs,
dispensing  fees  paid  to  pharmacies,  and  an administrative fee that
covers the  cost  of  providing  pharmacy  benefit  management  services
pursuant  to  a contract described in this paragraph. The department may
establish a maximum administrative fee;
(ii) The pharmacy benefit  manager  shall  identify  all  sources  and
amounts  of  income,  payments,  and  financial benefits to the pharmacy
benefit manager related to the provision and administration of  pharmacy
benefit   management  services  on  behalf  of  the  health  care  plan,
including, but not limited to, any pricing  discounts,  rebates  of  any
kind,   inflationary   payments,   credits,   clawbacks,  fees,  grants,
chargebacks, reimbursements, or other benefits and shall ensure that any
portion of such income,  payments,  and  financial  benefits  is  passed
through  to  the  health  care  plan  in  full  to reduce the reportable
ingredient cost;
(iii) The  pharmacy  benefit  manager  shall  fully  disclose  to  the
department  and  to  the health care plan the sources and amounts of all
income, payments, and financial benefits  referred  to  in  subparagraph
(ii) of this paragraph received by the pharmacy benefit manager;
(iv)  The pharmacy benefit manager shall identify all ingredient costs
and dispensing fees or similar payments made  by  the  pharmacy  benefit
manager  to  any  pharmacy  in  connection  with  the  contract or other
arrangement;
(v) The pharmacy benefit manager shall not utilize any form of  spread
pricing in any contract or other arrangement with health care plans. For
purposes  of  this subdivision "spread pricing" means any amount charged
or claimed by the pharmacy benefit manager in excess of the amount  paid
to  pharmacies  on behalf of the health care plan less an administrative

fee as described in this paragraph. Any  such  excess  amount  shall  be
remitted to the health care plan on a quarterly basis;
(vi)  Pharmacy  benefit  managers  shall  make their payment model for
administrative fees available  to  the  health  care  plan  and  to  the
department.   The  health  care  plan  shall,  if  so  directed  by  the
department, make changes to the payment model and  resubmit  an  amended
contract or contracts to the department for review and approval.
(b)  Any  changes  to  premiums resulting from such contracts shall be
subject  to  certification  by  the  state's  actuary   as   actuarially
appropriate.
(c)  Contracts or other arrangements subject to this subdivision shall
be submitted to the department for review and approval  as  required  by
and  in accordance with state law and the regulations of the department.
Contracts or other arrangements subject to this subdivision existing and
in force at the time of enactment of this subdivision shall be submitted
to the department for review and approval on or before July  first,  two
thousand nineteen.
11.  A  contract between a health care plan and a health care provider
shall include a provision that requires the health care provider to have
in place business processes to ensure the timely provision  of  provider
directory  information  to  the health care plan. A health care provider
shall submit such provider directory information to a health care  plan,
at  a  minimum, when a provider begins or terminates a network agreement
with a health care plan, when there are material changes to the  content
of  the provider directory information of such health care provider, and
at any other time, including upon the health care plan's request, as the
health care provider determines to be appropriate. For purposes of  this
subsection,  "provider  directory  information"  shall include the name,
address, specialty, telephone number, and digital contact information of
such health  care  provider;  whether  the  provider  is  accepting  new
patients;   for  mental  health  and  substance  use  disorder  services
providers, any affiliations with participating facilities  certified  or
authorized  by  the  office  of mental health or the office of addiction
services and supports, and any restrictions regarding  the  availability
of  the  individual  provider's services; and in the case of physicians,
board  certification,  languages  spoken,  and  any  affiliations   with
participating hospitals.
12.  A  contract between a health care plan and a health care provider
shall include a provision that states that the provider shall  reimburse
the  enrollee  for the full amount paid by the enrollee in excess of the
in-network cost-sharing  amount,  plus  interest  at  an  interest  rate
determined   by   the  commissioner  in  accordance  with  42  U.S.C.  §
300gg-139(b), for the services involved when the  enrollee  is  provided
with  inaccurate network status information by the health care plan in a
provider directory or in response to a  request  that  stated  that  the
provider  was  a  participating  provider  when  the  provider was not a
participating provider. In the  event  the  health  care  plan  provides
inaccurate  network  status  information  to the enrollee indicating the
provider was a participating provider  when  such  provider  was  not  a
participating  provider,  the  health  care  plan  shall  reimburse  the
provider for the  out-of-network  services  regardless  of  whether  the
enrollee's  coverage  includes  out-of-network services. Nothing in this
subdivision shall prohibit a health care provider from requiring in  the
terms  of  a  contract with a health care plan that the health care plan
remove, at the time of termination of such contract, the  provider  from
the  health  care plan's provider directory or that the health care plan
bear financial responsibility for providing  inaccurate  network  status
information to an enrollee.
13. (a) No contract or agreement between a health plan subject to this
article and a health care provider, other than a residential health care
facility as defined by section twenty-eight hundred one of this chapter,
shall include a provision that:
(i) contains a most-favored-nation provision; or
(ii)  restricts the ability of a health plan, an entity that contracts
with a health care plan  for  a  provider  network,  or  a  health  care
provider  to  disclose: (A) actual claims costs; or (B) price or quality
information required to be disclosed under federal  law,  including  the
allowed   amount,   negotiated   rates   or   discounts,  or  any  other
claim-related financial obligations,  including,  but  not  limited  to,
patient cost-sharing covered by the provider contract to any subscriber,
enrollee, group, or other entity receiving health care services pursuant
to the contract, or to any public compilation of reimbursement data such
as  the  New  York  all  payer  database  required by law or regulation,
provided that no disclosure shall include protected  health  information
or other information covered by statutory or other privilege.
(b)  For  purposes  of  this subdivision, the term "health plan" shall
include:
(i) an insurer licensed pursuant to the  insurance  law  or  a  health
maintenance organization certified pursuant to this article; and
(ii) a third-party administrator, affiliated with an insurer or health
maintenance organization, who administers a health benefit plan.