S 3986-A  HANNON¦¦¦¦¦¦¦¦¦¦¦¦¦¦   Same as A 8128-A  Gottfried 
Departmental Bill # 144
Department of Health (Internal # 11 - 2007)
ON FILE: 06/17/07 Public Health Law
TITLE....Relates to contracts with managed care organizations
03/22/07 REFERRED TO HEALTH
06/17/07 AMEND (T) AND RECOMMIT TO HEALTH
06/17/07 PRINT NUMBER 3986A
06/21/07 COMMITTEE DISCHARGED AND COMMITTED TO RULES
06/21/07 ORDERED TO THIRD READING CAL.2044
06/21/07 PASSED SENATE
06/21/07 DELIVERED TO ASSEMBLY
06/21/07 referred to health
06/21/07 substituted for a8128a
06/21/07 ordered to third reading rules cal.752
06/21/07 passed assembly
06/21/07 returned to senate
07/20/07 DELIVERED TO GOVERNOR
08/01/07 SIGNED CHAP.451
A8128-A Gottfried    Same as S 3986-A  HANNON 
Departmental Bill # 144
Department of Health (Internal # 11 - 2007)
Public Health Law
TITLE....Relates to contracts with managed care organizations
05/04/07 referred to health
06/18/07 reported referred to rules
06/18/07 amend (t) and recommit to rules
06/18/07 print number 8128a
06/21/07 reported
06/21/07 rules report cal.752
06/21/07 substituted by s3986a
    S03986  HANNON   AMEND=A
 03/22/07 REFERRED TO HEALTH
 06/17/07 AMEND (T) AND RECOMMIT TO HEALTH
 06/17/07 PRINT NUMBER 3986A
 06/21/07 COMMITTEE DISCHARGED AND COMMITTED TO RULES
 06/21/07 ORDERED TO THIRD READING CAL.2044
 06/21/07 PASSED SENATE
 06/21/07 DELIVERED TO ASSEMBLY
 06/21/07 referred to health
 06/21/07 substituted for a8128a
 06/21/07 ordered to third reading rules cal.752
 06/21/07 passed assembly
 06/21/07 returned to senate
 07/20/07 DELIVERED TO GOVERNOR
 08/01/07 SIGNED CHAP.451


HANNON, SEWARD
Amd SS2511, 2995, 2995-c, 4406-c, 4900, 4904, 4910 & 4914, Pub Health L; amd SS364-j & 369-ee, Soc Serv L; amd SS3217-b, 4325, 4900, 4904, 4910 & 4914, add S3238, Ins L
Relates to contracts with managed care organizations; extends collection and public reporting of quality measures to health insurance entities not currently represented in NYS quality assurance reporting requirements; makes DOH contract standard clauses applicable to all parties to provider contracts of all managed care organizations.
Departments of Health & Insurance

NEW YORK STATE SENATE
INTRODUCER'S MEMORANDUM IN SUPPORT
submitted in accordance with Senate Rule VI. Sec 1
 
BILL NUMBER: S3986A

SPONSOR: HANNON¦¦¦¦¦¦¦¦¦¦¦¦¦¦
  TITLE OF BILL: An act to amend the public health law, the social services law and the insurance law, in relation to providing enhanced consumer and provider protections, in relation to limitations on denial of claims for pre-au- thorized health care services, and in relation to external appeal proce- dures   PURPOSE: This bill would enhance consumer rights relating to health insurance by: (1) imposing limitations on when pre-authorized services may be denied; (2) enhancing protections when a provider leaves a network; (3) permit- ting external appeal of out-of-network denials when a health insurance plan is proposing an alternative in-network treatment; (4) requiring the collection and dissemination of preferred provider organization data; and (5) establishing timeframes for submission of claims to managed care providers and family health insurance plans.   SUMMARY OF PROVISIONS: Section 1 of the bill adds a new subdivision 19 to Public Health Law (PHL) § 2511 to require that claims submitted to an approved organiza- tion for payment for medical care, services, or supplies furnished by an out-of-network health care provider must be submitted within 15 months of the date the medical care, services, or supplies were furnished to an eligible person to be valid and enforceable against the approved organ- ization. There is an exception to the claims submission deadline for claims submissions warranted to address findings or recommendations identified in state or federal audits. Section 2 of the bill adds a new paragraph (e) to PHL § 2995(2) to define "preferred provider organization data" as data collected from an insurance company subject to Article 32 of the Insurance Law, a corpo- ration subject to Article 43 of the Insurance Law, or a municipal coop- erative health benefit plan certified pursuant to Article 47 of the Insurance law, with respect to preferred provider organization (PPO) products, as defined by the Commissioner of Health in consultation with the Superintendent of Insurance, offered by such entities. Section 3 of the bill amends PHL § 2995-c of the Public Health Law to require preferred provider organizations to annually report to the Department of Health (DOH) on the quality and effectiveness of care measures which are represented in the National Committee for Quality Assurance PPO Health Employer Data and Information Set and to provide for the dissemination of preferred provider organization data by DOH. Section 4 of the bill adds a new subdivision 5-c to PHL § 4406-c to provide that 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 the contract, including reimbursement terms for a period of two months from the termination or end of the contract period. The section further requires that notice be provided to enrollees within 15 days of the commencement of the two-month period. However, these requirements do not apply where both parties agree to the termination or non-renewal and the insurer provides notice to the insured at least 30 days in advance of the date of contract termination, Section 5 of the bill adds a new subdivision 7-f to PHL § 4900 to define an "out-of-network denial" as a denial of a request for pre-authoriza- tion to receive a health care service from an out-of-network provider on the basis that the out-of-network service is not materially different from the service available in-network. The new subdivision further requires health plans, up an receiving a pre-authorization request far an out-of-network service, to include information in a denial that explains what information the enrollee must submit in order to appeal the out-of-network denial pursuant to PHL § 4904(1-a). Section 6 of the bill adds a new subdivision (1-a) to PHL § 4904 to provide that an enrollee or the enrollee's designee may appeal an out- of-network denial by submitting: (1) a written statement from the enrollee's attending physician, stating that the requested out-of-net- work health care service is materially different from the health care service the health care plan approved to treat the enrollee's health care needs; and (2) two documents from the available medical and scien- tific evidence indicating that the out-of-network service is likely to be more clinically beneficial to the enrollee than the alternate in-net- work treatment and for which the adverse risk of the recommended or requested service or treatment would not likely be substantially increased over the in-network treatment. Section 7 of the bill adds a new paragraph (c) to PHL § 4910(2) to provide an enrollee with a right to an external appeal when a health plan denies coverage of an out-of-network health care service on the grounds that an alternate treatment is available in-network. Section 8 of the bill adds a new subparagraph (C) to PHL § 4914(2)(d) to impose standards and requirements far an external appeal agent's review of out-of-network denials. Section 9 of the bill adds a new subdivision 24 to Social Services Law (SSL) § 364-j, requiring that claims submitted to a managed care provid- er for payment for medical care, services, or supplies furnished by an out-of-network medical services provider, must be submitted within 15 months of the date the medical care, services, or supplies were furnished to an eligible person to be valid and enforceable against the managed care provider. There is an exception to the claims submission deadline for claims submissions warranted to address findings or recom- mendations identified by state or federal audits. Section 10 of the bill adds a new paragraph (i) to SSL § 369-ee(3), requiring that claims submitted to a family health insurance plan for payment for medical care, services, or supplies furnished by an out-of- network health care provider must be submitted within 15 months of the date the medical care, services, or supplies were furnished to an eligi- ble person to be valid and enforceable against the family health insur- ance plan. There is an exception to the claims submission deadline for claims submissions warranted to address finding or recommendations iden- tified by state or federal audits. Section 11 of the bill adds a new subsection (h) to Insurance Law § 3217-b to provide that if a contract between an insurer and a hospital is not renewed or is terminated by either party, the parties shall continue to abide by the terms of the contract, including reimbursement terms for a period of two months from the termination or end of the contract period. The section further requires that notice be provided to insureds within 15 days of the commencement of the two-month period. However, these requirements do not apply where both parties agree to the termination or non-renewal and the insurer provides notice to the insured at least 30 days in advance of the date of contract termination. Section 12 of the bill adds a new § 3238 to the Insurance Law to require insurers, municipal cooperative health benefits plans and managed care organizations (health plans) to pay claims for health care services for which pre-authorization was required by, and received from the health plan unless: (1) the insured was not a covered person at the time the service was rendered; (2) the submission of the claim was not timely; (3) the insured's benefit limitations were exhausted; (4) the pre-au- thorization was based on materially inaccurate or incomplete informa- tion; (5) the pre-authorized service related to a pre-existing condi- tion; or (6) there is a reasonable belief of fraud and abuse. This section further provides that nothing shall be construed to prohibit health plans from denying continued or extended coverage as part of concurrent review, denying a claim if the health plan is not primarily obligated to pay the claim, or applying payment policies that are consistent with applicable law, rule or regulation. Section 13 of the bill adds a new subsection (h) to Insurance Law § 4325 to provide that if a contract between a corporation and a hospital is not renewed or is terminated by either party, the parties shall continue to abide by the terms of the contract, including reimbursement terms for a period of two months from the termination or end of the contract peri- od. The section further requires that notice be provided to subscribers within 15 days of the commencement of the two-month period. However, these requirements do not apply where both parties agree to the termi- nation or non-renewal and the corporation provides notice to the subscriber at least 30 days in advance of the date of contract termi- nation. Section 14 of the bill adds a new subsection (g-6) to Insurance Law § 4900 to define "out-of-network denial" as a denial under a managed care product of a request for preauthorization to receive a health care service from an out-of-network provider on the basis that the out-of- network service is not materially different than the service available in-network. This section further requires health plans, upon receiving a pre-authorization request for an out-of-network service, to include information in a denial that explains what information the insured must submit in order to appeal the out-of-network denial pursuant to Insur- ance Law § 4904 (a-1). Section 15 of the bill amends Insurance Law § 4900(i) to amend the defi- nition of a "utilization review agent" to include a municipal cooper- ative health benefit plan in the definition. Section 16 of the bill amends Insurance Law § 4904 to add a new subsection (a-1) to provide that an insured or the insured's designee may appeal an out-of-network denial: (1) by submitting a written state- ment from the insured's attending physician stating that the requested out-of-network health care service is materially different from the health care service the health care plan approved to treat the insured's health care needs; and (2) based on two documents from the available medical and scientific evidence indicating that the out-of-network service is likely to be more clinically beneficial to the insured than the alternate in-network treatment and for which the adverse risk of the recommended or requested service or treatment would not likely be substantially increased over the in-network treatment. Section 17 of the bill amends Insurance Law § 4910(b)(2)(D) to make a technical connection. Section 18 of the bill adds a new paragraph 3 to Insurance Law § 4910(b) to provide the insured with a right to an external appeal when an insur- er denies coverage of an out-of-network health care service on the grounds that an alternate treatment is available in-network. Section 19 of the bill adds a new subparagraph (C) to Insurance Law § 4914(b)(4) to impose standards and requirements for an external appeal agent's review of out-of-network denials. Section 20 sets forth the effective date.   EXISTING LAW: Article 49 of the Insurance Law and Article 49 of the Public Health Law establish a right to utilization review and external appeal. Articles 32 and 43 of the Insurance Law and Article 44 of the Public Health Law impose requirements on provider contract terminations. Section 2995c of the Public Health Law provides for the collection and dissemination of health care plan data by DOH.   LEGISLATIVE HISTORY: This is a new proposal.   STATEMENT IN SUPPORT: The managed care bill of rights and the external appeal law, which were enacted in 1995 and 1996, respectively, established important consumer protections with respect to access to care, health plan coverage deter- minations and appeal rights for health plan denials. Given the changes that have occurred in the health insurance marketplace in the past ten years, these laws should now be amended to ensure that these important protections remain meaningful. This bill requires DOH to include preferred provider organization data when it collects and disseminates health plan data pursuant to the qual- ity assurance reporting requirements developed by DOH in conjunction with the National Committee on Quality Assurance. This will ensure that consumers who have coverage with a preferred provider organization will be provided with the same essential information about their health plan as is provided to consumers who have coverage with a health maintenance organization. Consumers who have coverage with a preferred provider organization will thereby be provided with important and timely informa- tion needed to make medical care and insurance decisions. This bill ensures that claims will be promptly submitted by an out-of- network provider to a managed care plan participating in Medicaid managed care, Family Health Plus and Child Health Plus, by requiring that claims be submitted within one year of the date the medical care, services, or supplies were furnished to an eligible person to be valid and enforceable against the managed care plan. There is an exception to the claims submission deadline for claims submission warranted to address finding or recommendations of state and federal audits. Insurance policies often contain requirements that an insured (or a participating provider) obtain the health plan's pre-authorization of health care services as a condition of coverage. Following this proto- col, however, does not always result in payment for the pre-authorized service. Instead, health plans deny claims after pre-authorization for a number of reasons. This bill would prohibit a health plan from subse- quently denying coverage of a pre-authorized service unless specific conditions are met. As a result, consumers and providers will be able to reasonably rely on a health plan's authorization of services. This bill would minimize the concerns that consumers have today when they learn that their provider has terminated their relationship with their health plan, by requiring health plans and hospitals to continue to abide by the terms of the contract, including reimbursement terms, for a period of two months from the termination or end of the contract period. In addition, the bill requires the health plan to notify consum- ers of a provider's termination within 15 days after the commencement of this two-month period to ensure that a consumer will not be unduly alarmed about the impending departure of their provider when continued negotiation between the health plan and provider ends in the provider's agreement to stay on. This bill would expand external appeal rights to permit external review of out-of-network denials when the health plan is proposing an alternate in-network treatment from the treatment requested from an out-of-network provider. The bill would also require the external appeal agent to review the treatment proposed by the out-of-network provider and compare it to the treatment proposed by the in-plan provider and determine whether the out-of-network treatment is materially different from the in-network treatment, more beneficial than the in-network treatment, and whether the adverse risk of the out-of-network treatment is substantial- ly increased over the in-network treatment. Establishing an external appeal right, in conjunction with this standard of review, will not only ensure that consumers are protected, but also will provide an appropri- ate standard for external appeal agent review, without altering how other medical necessity denials are reviewed.   BUDGET IMPLICATIONS: This bill would have no budgetary impact.   EFFECTIVE DATE: The bill would be effective April 1, 2008, except that: (1) sections 1, 9 and 10 will apply to services provided on or after January 1, 2008; (2) sections 2, 3 and 12 will take effect on January 1, 2008, except that Insurance Law § 3238(a)(1)(iii), set forth in section 12 of the bill will expire as of December 31, 2009; and (3) sections 4, 11 and 13 will take effect immediately and will expire as of June 30, 2009.

                            LAWS OF NEW YORK, 2007

                                  CHAPTER 451

   AN  ACT  to amend the public health law, the social services law and the
     insurance law, in relation to providing enhanced consumer and provider
     protections, in relation to limitations on denial of claims  for  pre-
     authorized  health  care  services, and in relation to external appeal
     procedures

        Became a law August 1, 2007, with the approval of the Governor.
            Passed by a majority vote, three-fifths being present.

     The People of the State of New York, represented in Senate and  Assem-
   bly, do enact as follows:

     Section  1. Section 2511 of the public health law is amended by adding
   a new subdivision 19 to read as follows:
     19. Claims submitted to  an  approved  organization  for  payment  for
   medical  care,  services,  or  supplies  furnished  by an out-of-network
   health care provider must be submitted within fifteen months of the date
   the medical care, services, or supplies were furnished  to  an  eligible
   person to be valid and enforceable against the approved organization. If
   a claim by an out-of-network health care provider is not submitted with-
   in  fifteen  months  of  the  date  that  the  medical care, services or
   supplies were furnished and the claim  is  subsequently  denied  by  the
   approved  organization  for that reason, such out-of-network health care
   provider shall not seek payment  for  such  medical  care,  services  or
   supplies  from  the  enrollee. This deadline for claims submission shall
   not apply where the claims submission is warranted to  address  findings
   or  recommendations  identified in a state or federal audit except where
   such audit also indicates that an  inappropriate  provider  payment  was
   solely the fault of the out-of-network health care provider.
     § 2. Subdivision 2 of section 2995 of the public health law is amended
   by adding a new paragraph (e) to read as follows:
     (e)  "Preferred  provider organization data" shall mean data collected
   from an insurance company subject to article thirty-two of the insurance
   law, a corporation subject to article forty-three of the insurance  law,
   or  a  municipal  cooperative  health benefit plan certified pursuant to
   article forty-seven of the insurance  law,  with  respect  to  preferred
   provider  organization (PPO) products, as defined by the commissioner in
   consultation with the superintendent, offered by such entities.
     § 3. Section 2995-c of the public health law, as added by chapter  542
   of the laws of 2000, is amended to read as follows:
     §  2995-c.  Health care plan and preferred provider organization data.
   1. Collection. The department shall  collect  for  dissemination  via  a
   statewide  health information system, any health care plan and preferred
   provider organization data collected for public  dissemination  pursuant
   to the quality assurance reporting requirements developed by the depart-
   ment in conjunction with the national committee on quality assurance.
     2.  Preparation of data and public review. The department shall there-
   after prepare the collected health  care  plan  and  preferred  provider
   organization  data  for dissemination. The department shall provide each

   EXPLANATION--Matter in italics is new; matter in brackets [ ] is old law
                                to be omitted.

   CHAP. 451                          2

   health care plan with a copy of  the  health  care  plan  and  preferred
   provider organization data to be disseminated concerning it. In a manner
   and  time  required  by  the  department,  the health care plan shall be
   provided  with  an  opportunity  to correct factual inaccuracies, and to
   file a statement in a form prescribed by the department  concerning  the
   data, which statement shall be disseminated with the data.
     3.  Dissemination.  The  department  shall  thereafter disseminate the
   collected health care plan and  preferred  provider  organization  data,
   organized  and  segregated  by  type of product and type of organization
   offering the product, with  corrections  and  statements,  if  any.  The
   department  shall  share  preferred  provider organization data with the
   superintendent of insurance.
     (a) Thereafter, the health care plan and preferred provider  organiza-
   tion  data  so  disseminated shall be updated at regular intervals to be
   determined by the committee.
     (b) All health care plan  and  preferred  provider  organization  data
   disseminated  shall include the following statement: "THE DATA COLLECTED
   BY THE DEPARTMENT IS ACCURATE TO THE BEST OF THE  KNOWLEDGE  OF  MEMBERS
   AND  STAFF,  BASED  ON  THE INFORMATION SUPPLIED BY THE HEALTH CARE PLAN
   WHICH IS THE SUBJECT OF THE DATA."
     (c) If the department determines that  any  data  to  be  disseminated
   pursuant  to  this  section  is not useful for determinations concerning
   health care quality, the department shall recommend to  the  legislature
   the necessary statutory changes.
     §  4.  Section  4406-c of the public health law is amended by adding a
   new subdivision 5-c to read as follows:
     5-c. 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.
     § 5. Section 4900 of the public health law is amended by adding a  new
   subdivision 7-f to read as follows:
     7-f.  "Out-of-network  denial" means a denial of a request for pre-au-
   thorization to receive a particular health service from  an  out-of-net-
   work  provider  on  the basis that such out-of-network health service is
   not materially different than the health service  available  in-network.
   The  notice  of  an  out-of-network denial provided to an enrollee shall
   include information explaining what information the enrollee must submit
   in order to appeal the out-of-network  denial  pursuant  to  subdivision
   one-a  of  section  four  thousand nine hundred four of this article. An
   out-of-network denial under this  subdivision  does  not  constitute  an
   adverse  determination  as  defined in this article. Notwithstanding any
   other provision of this subdivision, an out-of-network denial shall  not
   be  construed  to  include  a denial for a referral to an out-of-network
   provider on the basis that a health care provider is  available  in-net-
   work to provide the particular health service requested by the enrollee.

                                      3                           CHAP. 451

     §  6. Section 4904 of the public health law is amended by adding a new
   subdivision 1-a to read as follows:
     1-a.  An enrollee or the enrollee's designee may appeal an out-of-net-
   work denial by a health care plan by submitting: (a) a written statement
   from the enrollee's attending physician, who must be a  licensed,  board
   certified  or  board  eligible  physician  qualified  to practice in the
   specialty area of practice appropriate to treat  the  enrollee  for  the
   health  service sought, that the requested out-of-network health service
   is materially different from the health service  the  health  care  plan
   approved to treat the insured's health care needs; and (b) two documents
   from  the available medical and scientific evidence that the out-of-net-
   work health service is likely to be more clinically  beneficial  to  the
   enrollee  than  the  alternate recommended in-network health service and
   for which the adverse risk of the requested health service would  likely
   not be substantially increased over the in-network health service.
     §  7.  Subparagraph  (iv) of paragraph (b) of subdivision 2 of section
   4910 of the public health law, as added by chapter 586 of  the  laws  of
   1998, is amended and a new paragraph (c) is added to read as follows:
     (iv)  the  specific  health  service  or  procedure recommended by the
   attending physician would otherwise be covered under the  policy  except
   for  the  health  care  plan's  determination that the health service or
   procedure is experimental or investigational[.]; or
     (c)(i) the enrollee has had coverage of the health service (other than
   a clinical trial to  which  paragraph  (b)  of  this  subdivision  shall
   apply),  which  would  otherwise be a covered benefit under a subscriber
   contract or governmental health benefit program, denied  on  appeal,  in
   whole  or  in part, pursuant to title one of this article on the grounds
   that such health service is out-of-network and an alternate  recommended
   health service is available in-network, and the health plan has rendered
   a  final  adverse determination with respect to an out-of-network denial
   or both the health plan and the enrollee have jointly  agreed  to  waive
   any internal appeal; and
     (ii)  the  enrollee's  attending  physician,  who shall be a licensed,
   board certified or board eligible physician qualified to practice in the
   specialty area of practice appropriate to treat  the  enrollee  for  the
   health  service sought, certifies that the out-of-network health service
   is  materially  different  than  the  alternate  recommended  in-network
   service,  and  recommends a health care service that, based on two docu-
   ments from the available medical and scientific evidence, is  likely  to
   be  more clinically beneficial than the alternate recommended in-network
   treatment and the adverse risk of the  requested  health  service  would
   likely  not  be  substantially  increased over the alternate recommended
   in-network health service.
     § 8. Paragraph (d) of subdivision 2 of  section  4914  of  the  public
   health  law  is  amended  by  adding  a  new subparagraph (C) to read as
   follows:
     (C) For external appeals requested pursuant to paragraph (c) of subdi-
   vision two of section four thousand  nine  hundred  ten  of  this  title
   relating  to  an  out-of-network denial, the external appeal agent shall
   review the utilization review agent's final adverse  determination  and,
   in  accordance  with the provisions of this title, shall make a determi-
   nation as to whether the out-of-network health service shall be  covered
   by the health plan.
     (i)  The external appeal agent shall assign one clinical peer reviewer
   to make a determination as to whether the out-of-network health  service
   is materially different from the health service available in-network.

   CHAP. 451                          4

     (ii) If a determination is made that the out-of-network health service
   is not materially different from the health service available in-network
   the  out-of-network  health  service  shall not be covered by the health
   plan.
     (iii)  If  a  determination  is  made  that  the out-of-network health
   service is  materially  different  from  the  health  service  available
   in-network, the external appeal agent shall assign a panel with an addi-
   tional  two  or  a  greater  odd number of clinical peer reviewers which
   shall make a determination  as  to  whether  the  out-of-network  health
   service shall be covered by the health plan; provided that such determi-
   nation shall:
     (1) be accompanied by a written statement that:
     (I)  the  out-of-network health service shall be covered by the health
   care plan either: when a majority of the panel of reviewers  determines,
   upon  review of the health service requested by the enrollee, the alter-
   nate recommended health service proposed by the plan, the clinical stan-
   dards of the plan, the information provided concerning the enrollee, the
   attending physician's recommendation, the applicable medical and  scien-
   tific  evidence,  the enrollee's medical record, and any other pertinent
   information that the out-of-network health service is likely to be  more
   clinically  beneficial  than  the proposed in-network health service and
   the adverse risk of the requested health service  would  likely  not  be
   substantially increased over the in-network health service; or
     (II) uphold the health plan's denial of coverage.
     (2)  be  subject  to  the terms and conditions generally applicable to
   benefits under the evidence of coverage under the health care plan;
     (3) be binding on the plan and the enrollee; and
     (4) be admissible in any court proceeding.
     § 9. Section 364-j of the social services law is amended by  adding  a
   new subdivision 24 to read as follows:
     24.  Claims  submitted  to  a  managed  care  provider for payment for
   medical care, services,  or  supplies  furnished  by  an  out-of-network
   medical services provider must be submitted within fifteen months of the
   date the medical care, services, or supplies were furnished to an eligi-
   ble  person to be valid and enforceable against the managed care provid-
   er. This deadline for claims submission shall not apply where the claims
   submission is warranted to address findings or  recommendations  identi-
   fied  in a state or federal audit except where such audit also indicates
   that an inappropriate provider payment was solely the fault of the  out-
   of-network health care provider.
     §  10.  Subdivision  3 of section 369-ee of the social services law is
   amended by adding a new paragraph (i) to read as follows:
     (i) Claims submitted to a family health insurance plan for payment for
   medical care, services,  or  supplies  furnished  by  an  out-of-network
   health care provider must be submitted within fifteen months of the date
   the  medical  care,  services, or supplies were furnished to an eligible
   person to be valid and enforceable against the family  health  insurance
   plan.  This  deadline  for  claims  submission shall not apply where the
   claims submission is warranted to address  findings  or  recommendations
   identified  in  a  state  or  federal audit except where such audit also
   indicates that an inappropriate provider payment was solely the fault of
   the out-of-network health care provider.
     § 11. Section 3217-b of the insurance law is amended by adding  a  new
   subsection (h) to read as follows:
     (h)  If a contract between an insurer and a hospital is not renewed or
   is terminated by either party, the parties shall continue  to  abide  by

                                      5                           CHAP. 451

   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  insureds  potentially affected by such termination or
   non-renewal within fifteen days  after  commencement  of  the  two-month
   period. The commissioner of health 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 subsection shall not apply  where  both
   parties  mutually agree in writing to the termination or non-renewal and
   the insurer provides notice to the  insured  at  least  thirty  days  in
   advance of the date of contract termination.
     §  12.  The  insurance  law is amended by adding a new section 3238 to
   read as follows:
     § 3238. Pre-authorization of health care services.   (a)  An  insurer,
   corporation  organized  pursuant to article forty-three of this chapter,
   municipal cooperative health benefits plan certified pursuant to article
   forty-seven of this chapter,  or  health  maintenance  organization  and
   other  organizations  certified  pursuant  to  article forty-four of the
   public health law ("health plan") shall pay claims  for  a  health  care
   service  for  which  a  pre-authorization  was required by, and received
   from, the health plan  prior  to  the  rendering  of  such  health  care
   service, unless:
     (1)  (i) the insured, subscriber, or enrollee was not a covered person
   at the time the health care service was rendered.
     (ii) Notwithstanding the provisions of subparagraph (i) of this  para-
   graph,  a  health  plan  shall  not  deny  a  claim on this basis if the
   insured's, subscriber's or enrollee's coverage was retroactively  termi-
   nated  more  than  one  hundred twenty days after the date of the health
   care service, provided that the claim is submitted  within  ninety  days
   after  the  date  of  the health care service. If the claim is submitted
   more than ninety days after the date of the  health  care  service,  the
   health  plan  shall have thirty days after the claim is received to deny
   the claim on the basis that the insured, subscriber or enrollee was  not
   a covered person on the date of the health care service.
     (iii)  The provisions of subparagraph (ii) of this paragraph shall not
   apply to coverage that is provided by the state of New York,  a  munici-
   pality  or a political subdivision to its respective employees, retirees
   or members.
     (2) the submission of the claim with respect to an insured, subscriber
   or enrollee was not timely under the terms of  the  applicable  provider
   contract,  if  the  claim  is  submitted by a provider, or the policy or
   contract, if the claim is submitted by the insured, subscriber or enrol-
   lee;
     (3) at  the  time  the  pre-authorization  was  issued,  the  insured,
   subscriber  or  enrollee  had  not  exhausted contract or policy benefit
   limitations based on information available to the health  plan  at  such
   time,  but subsequently exhausted contract or policy benefit limitations
   after authorization was issued; provided, however, that the health  plan
   shall  include  in  the  notice  of  determination  required pursuant to
   subsection (b) of section four thousand nine hundred three of this chap-
   ter and subdivision two of  section  forty-nine  hundred  three  of  the
   public  health law that the visits authorized might exceed the limits of
   the contract or policy and accordingly would not be  covered  under  the
   contract or policy;
     (4) the pre-authorization was based on materially inaccurate or incom-
   plete  information  provided by the insured, subscriber or enrollee, the

   CHAP. 451                          6

   designee of the insured, subscriber or  enrollee,  or  the  health  care
   provider  such  that  if  the  correct  or complete information had been
   provided, such pre-authorization would not have been granted;
     (5) the pre-authorized service was related to a pre-existing condition
   that was excluded from coverage; or
     (6)  there  is  a  reasonable  basis supported by specific information
   available for review by the superintendent that the insured,  subscriber
   or enrollee, the designee of the insured, subscriber or enrollee, or the
   health care provider has engaged in fraud or abuse.
     (b)  Nothing  in  this section shall be construed to prohibit a health
   plan from denying continued or extended coverage as part of a concurrent
   review of a health care service.
     (c) If a health plan denies payment for a surgical or  other  invasive
   procedure  requiring  sedation due to lack of pre-authorization and such
   surgical or other invasive procedure is rendered at the same time  as  a
   surgical  or  other invasive procedure requiring sedation for which pre-
   authorization was required and received, upon the appeal of the  denial,
   the  denial of any such service shall be upheld only if it is determined
   that:
     (1) the other surgical or invasive procedure requiring sedation is not
   a covered benefit;
     (2) the other surgical or invasive procedure  requiring  sedation  was
   not  medically  necessary pursuant to section four thousand nine hundred
   four of this chapter or section forty-nine hundred four  of  the  public
   health law;
     (3)  the  other  surgical or invasive procedure requiring sedation was
   experimental or investigational pursuant to section four  thousand  nine
   hundred  four  of this chapter or section forty-nine hundred four of the
   public health law; or
     (4) one of the conditions set forth in paragraphs one through  six  of
   subsection (a) of this section is met.
     (d) Payment for such health care services shall be subject to a health
   plan's provider contracts or claims payment policies that are consistent
   with applicable law, rule or regulation.
     (e)  Nothing  in  this section shall be deemed to limit the right of a
   health plan to deny a claim if the health plan determines that it is not
   primarily obligated to pay the claim because  other  insurance  coverage
   exists  that  is  primary, including but not limited to workers' compen-
   sation and no-fault coverage.
     (f) Notification that a health care service is  being  provided  shall
   not  constitute  a  request  for  pre-authorization  of that health care
   service for purposes of this  section;  provided,  however,  that  if  a
   health  plan  provides  a written acknowledgement of the notification to
   the health care provider, such acknowledgment shall clearly  state  that
   the  acknowledgment  does  not  constitute  a  pre-authorization  of the
   services to be rendered.
     (g) Nothing in this section shall preclude a health care provider  and
   a  health  plan from agreeing to provisions different from those in this
   section; provided, however, that any agreement that purports  to  waive,
   limit,  disclaim,  or  in  any  way diminish the rights of a health care
   provider set forth in this section shall be void as contrary  to  public
   policy.
     §  13.  Section  4325  of the insurance law is amended by adding a new
   subsection (h) to read as follows:
     (h) If a contract between a corporation and a hospital is not  renewed
   or is terminated by either party, the parties shall continue to abide by

                                      7                           CHAP. 451

   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 subscribers potentially affected by such termination or
   non-renewal within fifteen days  after  commencement  of  the  two-month
   period. The commissioner of health 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 subsection shall not apply  where  both
   parties  mutually agree in writing to the termination or non-renewal and
   the corporation provides notice to the subscriber at least  thirty  days
   in advance of the date of contract termination. 
     §  14.  Section  4900  of the insurance law is amended by adding a new
   subsection (g-6) to read as follows:
     (g-6) "Out-of-network denial" means a  denial  under  a  managed  care
   product  as  defined  in  subsection  (c) of section four thousand eight
   hundred one of this  chapter  of  a  request  for  pre-authorization  to
   receive  a  particular health service from an out-of-network provider on
   the basis that such out-of-network  health  service  is  not  materially
   different than the health service available in-network. The notice of an
   out-of-network  denial  provided to an insured shall include information
   explaining what information the insured must submit in order  to  appeal
   the  out-of-network  denial pursuant to subsection (a-1) of section four
   thousand nine hundred four of this  article.  An  out-of-network  denial
   under  this  subsection  does not constitute an adverse determination as
   defined in this article.  Notwithstanding any other  provision  of  this
   subsection, an out-of-network denial shall not be construed to include a
   denial  for a referral to an out-of-network provider on the basis that a
   health care provider is available in-network to provide  the  particular
   health service requested by the insured. 
     § 15. Subsection (i) of section 4900 of the insurance law, as added by
   chapter 705 of the laws of 1996, is amended to read as follows:
     (i)  "Utilization  review  agent" means any insurer subject to article
   thirty-two or forty-three of this chapter and any municipal  cooperative
   health  benefit  plan  certified pursuant to article forty-seven of this
   chapter performing utilization review and  any  independent  utilization
   review  agent  performing  utilization  review  under contract with such
   insurer or municipal cooperative health benefit plan.
     § 16. Section 4904 of the insurance law is amended  by  adding  a  new
   subsection (a-1) to read as follows:
     (a-1)  An  insured or the insured's designee may appeal an out-of-net-
   work denial by a health care plan by submitting: (1) a written statement
   from the insured's attending physician, who must be  a  licensed,  board
   certified  or  board  eligible  physician  qualified  to practice in the
   specialty area of practice appropriate to  treat  the  insured  for  the
   health services sought, that the requested out-of-network health service
   is  materially  different  from  the health service the health care plan
   approved to treat the insured's health care needs; and (2) two documents
   from the available medical and scientific evidence, that the out-of-net-
   work health service is likely to be more clinically  beneficial  to  the
   insured than the alternate recommended in-network health service and for
   which  the adverse risk of the requested health service would likely not
   be substantially increased over the in-network health service.
     § 17. Subparagraph (D) of paragraph 2 of  subsection  (b)  of  section
   4910  of the insurance law, as added by chapter 586 of the laws of 1998,
   is amended to read as follows:

   CHAP. 451                          8

     (D) the specific  health  service  or  procedure  recommended  by  the
   attending  physician  would otherwise be covered under the policy except
   for the health care plan's determination  that  the  health  service  or
   procedure is experimental or investigational[.]; or
     §  18.  Subsection (b) of section 4910 of the insurance law is amended
   by adding a new paragraph 3 to read as follows:
     (3)(A) the insured has had coverage of the health service (other  than
   a clinical trial to which paragraph two of this subsection shall apply),
   which  would  otherwise be a covered benefit under a subscriber contract
   or governmental health benefit program, denied on appeal, in whole or in
   part, pursuant to title one of this article on  the  grounds  that  such
   health  service is out-of-network and an alternate recommended treatment
   is available in-network, and  the  health  plan  has  rendered  a  final
   adverse  determination  with respect to an out-of-network denial or both
   the health plan and the insured have jointly agreed to waive any  inter-
   nal appeal; and
     (B)  the insured's attending physician, who shall be a licensed, board
   certified or board eligible  physician  qualified  to  practice  in  the
   specialty  area  of  practice  appropriate  to treat the insured for the
   health service sought, certifies that the out-of-network health  service
   is materially different than the alternate recommended in-network health
   service,  and  recommends  a health service that, based on two documents
   from the available medical and scientific evidence, is likely to be more
   clinically beneficial than the alternate recommended  in-network  treat-
   ment  and  the adverse risk of the requested health service would likely
   not be substantially increased over the alternate recommended in-network
   health service.
     § 19. Paragraph 4 of subsection (b) of section 4914 of  the  insurance
   law is amended by adding a new subparagraph (C) to read as follows:
     (C)  For  external  appeals  requested  pursuant to paragraph three of
   subsection b of section four thousand nine hundred  ten  of  this  title
   relating  to  an  out-of-network denial, the external appeal agent shall
   review the utilization review agent's final adverse  determination  and,
   in  accordance  with the provisions of this title, shall make a determi-
   nation as to whether the out-of-network health service shall be  covered
   by the health plan.
     (i)  The external appeal agent shall assign one clinical peer reviewer
   to make a determination as to whether the out-of-network health  service
   is materially different from the alternate recommended in-network health
   service.
     (ii) If a determination is made that the out-of-network health service
   is  not  materially  different from the alternate recommended in-network
   health service, the out-of-network health service shall not  be  covered
   by the health plan.
     (iii)  If  a  determination  is  made  that  the out-of-network health
   service is materially different from the alternate  recommended  in-net-
   work health service, the external appeal agent shall assign a panel with
   an  additional  two  or a greater odd number of clinical peer reviewers,
   which shall make a determination as to whether the out-of-network health
   service shall be covered by the health plan; provided that such determi-
   nation shall:
     (I) be accompanied by a written statement:
     (1) that the out-of-network health service shall  be  covered  by  the
   health  care  plan  either:  when  a  majority of the panel of reviewers
   determines, upon review of the treatment requested by the  insured,  the
   alternate  recommended health service proposed by the plan, the clinical

                                      9                           CHAP. 451

   standards of the plan, the information provided concerning the  insured,
   the  attending  physician's  recommendation,  the applicable medical and
   scientific evidence, the insured's medical record, and any other  perti-
   nent  information that the out-of-network health service is likely to be
   more clinically beneficial than  the  alternate  recommended  in-network
   health  service  and  the  adverse  risk of the requested health service
   would likely not be substantially increased over the  in-network  health
   service; or
     (2) uphold the health plan's denial of coverage;
     (II)  be  subject  to the terms and conditions generally applicable to
   benefits under the evidence of coverage under the health care plan;
     (III) be binding on the plan and the insured; and
     (IV) be admissible in any court proceeding.
     § 20. This act shall take effect April  1,  2008;  provided,  however,
   that:
     1.  sections  four, eleven and thirteen  of this act shall take effect
   immediately and shall expire and be deemed repealed June 30, 2009;
     2. sections two, three and twelve of this act  shall  take  effect  on
   January 1, 2008; provided, however, that subparagraph (iii) of paragraph
   (1)  of  subsection (a) of section 3238 of the insurance law as added in
   section twelve of this act shall expire and be deemed repealed  December
   31, 2009;
     3.  provided,  however,  that  the  amendments to section 364-j of the
   social services law made by section nine of this act  shall  not  affect
   the repeal of such section and shall be deemed repealed therewith; and
     4.  sections  one,  nine  and  ten of this act shall apply to services
   provided on or after January 1, 2008.

   The Legislature of the STATE OF NEW YORK ss:
     Pursuant to the authority vested in us by section 70-b of  the  Public
   Officers  Law,  we  hereby  jointly  certify that this slip copy of this
   session law was printed under our direction and, in accordance with such
   section, is entitled to be read into evidence.

      JOSEPH L. BRUNO                                     SHELDON SILVER
   Temporary President of the Senate                Speaker of the Assembly

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