DFS-52-14-00009-ERP Independent Dispute Resolution for Emergency Services and Surprise Bills

4/1/15 N.Y. St. Reg. DFS-52-14-00009-ERP

NEW YORK STATE REGISTER

VOLUME XXXVII, ISSUE 13

April 01, 2015

RULE MAKING ACTIVITIES

DEPARTMENT OF FINANCIAL SERVICES

NOTICE OF EMERGENCY ADOPTION AND REVISED RULE MAKING

NO HEARING(S) SCHEDULED

 

I.D No. DFS-52-14-00009-ERP

Filing No. 162

Filing Date. Mar. 12, 2015

Effective Date. Mar. 31, 2015

Independent Dispute Resolution for Emergency Services and Surprise Bills

PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following action:

Action Taken:

Addition of Part 400 to Title 23 NYCRR.

Statutory authority:

Financial Services Law, sections 202, 301, 302 and art. 6; Insurance Law, section 301; L. 2014, ch. 60, part H

Finding of necessity for emergency rule:

Preservation of general welfare.

Specific reasons underlying the finding of necessity:

Long sought and much needed legislation to address the issue of unexpected and sometimes excessive bills for emergency services and surprise bills was enacted as Part H of Chapter 60 of the New York Laws of 2014, which was signed into law by the Governor on March 31, 2014. Part H of Chapter 60 will take effect on March 31, 2015.

The Department has been aware for several years that consumers, who did their best to stay in-network, nonetheless received large bills for unexpected out-of-network services. In 2012, the Department released “An Unwelcome Surprise,” a report detailing the issues that lead to consumers receiving unexpected medical bills from out-of-network providers. The report stated that unexpected and sometimes excessive medical bills from out-of-network providers contribute to the growing problem of consumer medical debt, which continues to be a significant cause of personal bankruptcy. Chapter 60 of the Laws of 2014 added a new Article 6 to the Financial Services Law to address this problem. Article 6 provides that consumers must be held harmless for out-of-network emergency bills and surprise bills, and directs the provider and the health plan to work out payment for these bills. Article 6 establishes an independent dispute resolution process, by which a dispute involving a bill for emergency services or a surprise bill may be resolved.

The Department has worked diligently with stakeholders to develop the rule necessary to implement the independent dispute resolution process. A proposed rule was published in the State Register on December 31, 2014. Extensive comments were received from many stakeholders, which the Department considered in formulating this rulemaking being promulgated on an emergency basis. The Department intends to publish a revised proposed regulation, which will again permit stakeholders to submit comments, before the regulation is finalized.

It is critical for the protection of the public that the appropriate regulations are in place on and after the effective date of Chapter 60 to allow health plans, providers, and as applicable, patients, to dispute payments for emergency services or surprise bills. Therefore, it is necessary to promulgate the rule on an emergency basis for the furtherance of the general welfare.

Subject:

Independent Dispute Resolution for Emergency Services and Surprise Bills.

Purpose:

To establish a dispute resolution process for emergency services and surprise bill and standards for that process.

Substance of emergency/revised rule:

Section 400.0 is the preamble.

Section 400.1 describes the applicability of the regulation and states that the regulation is applicable to health care services provided in New York State.

Section 400.2 provides definitions.

Section 400.3 establishes the independent dispute resolution entity (IDRE) certification requirements. IDREs apply for certification to the superintendent and must demonstrate that they are able to review disputes involving payment for emergency services and surprise bills. IDREs must ensure that reviews are completed in the required timeframes, and must have a network of reviewers, including physicians.

Section 400.4 details prohibited conflicts of interest. IDRE and IDRE reviewers may not have a prohibited affiliation with a health care plan, provider, facility, developer of a health care service or patient involved in the dispute.

Section 400.5 details the responsibilities of health care plans for disputes regarding emergency services and surprise bills. Health care plans must pay the claim and may attempt to negotiate the amount. Health care plans must provide the insured with notice that the insured shall incur no greater out-of-pocket costs for the services than the insured would have incurred with a participating physician or health care provider. Health care plans are also required to provide information on their websites about surprise bills.

Section 400.6 details the responsibilities of non-participating physicians and non-participating referred health care providers for disputes regarding emergency services and surprise bills. Non-participating physicians and non-participating referred health care providers must hold insured patients that complete an assignment of benefits form harmless for surprise bills. Non-participating physicians must also include a claim form and an assignment of benefits form with a bill to an insured.

Section 400.7 establishes the process to submit disputes regarding emergency services or surprise bills. Health care plans, non-participating physicians, non-participating referred health care providers and patients may submit disputes involving payment for emergency services and surprise bills to an IDRE. The parties must complete an application in the form and manner determined by the superintendent and the parties must provide information about the dispute.

Section 400.8 establishes the responsibilities of an IDRE. Within three business days of receipt of an application submitted by a health care plan, non-participating physician, non-participating referred health care provider or a patient, an IDRE shall screen the application for any conflicts of interest, eligibility and request any additional information. If the requested information is not received within five business days, the IDRE shall make a determination based on the information available to the IDRE. If the IDRE determines, in a case involving a health care plan, based on the health care plan’s payment and the non-participating physician’s or non-participating referred health care provider’s fee, that a settlement between the health care plan and the non-participating physician or non-participating referred health care provider is reasonably likely, or that both the health care plan’s payment and the non-participating physician’s or non-participating referred health care provider’s fee represent unreasonable extremes, the IDRE may direct both parties to attempt a good faith negotiation for settlement. The IDRE shall have the dispute reviewed by a neutral and impartial reviewer with training and experience in health care billing, reimbursement, and usual and customary charges. All determinations shall be made in consultation with a neutral and impartial licensed reviewing physician in active practice in the same or similar specialty as the physician providing the service that is subject to the dispute. To the extent practicable, the reviewing physician shall be licensed in this State. An IDRE shall make a determination within 30 days of receiving the request for the dispute resolution. For disputes involving a health care plan, the IDRE must choose as the reasonable fee either the health care plan’s payment or the non-participating physician’s or non-participating referred health care provider’s fee. For disputes that do not involve a health care plan, the IDRE must determine the reasonable fee. In determining a reasonable fee, the IDRE must use the conditions and factors set forth in Financial Services Law Section 604.

Section 400.9 establishes IDRE record retention and compliance requirements. An IDRE shall retain case records in accordance with 11 NYCRR 243 (Insurance Regulation 152) for audit and examination purposes for a period of six years from the date of the IDRE’s determination. An IDRE shall provide any information as required or requested by the superintendent within two business days or such other period acceptable to the superintendent.

Section 400.10 establishes payment responsibility for the IDRE. If an IDRE determines the health care plan’s payment is reasonable, payment for the dispute resolution process shall be the responsibility of the non-participating physician or as applicable, non-participating referred health care provider. If an IDRE determines the non-participating physician’s or non-participating referred health care provider’s fee is reasonable, payment for the dispute resolution process shall be the responsibility of the health care plan. If good faith negotiations directed by the IDRE results in a settlement between the health care plan and the non-participating physician or non-participating referred health care provider, the health care plan and the non-participating physician or non-participating referred health care provider shall evenly divide and share the prorated cost for dispute resolution. For disputes that are rejected as ineligible or due to the requesting non-participating physician, non-participating referred health care provider or health care plan’s failure to submit information, an IDRE may charge an application processing fee, which shall be the responsibility of the requesting physician, health care provider or health care plan.

This notice is intended

to serve as both a notice of emergency adoption and a notice of revised rule making. The notice of proposed rule making was published in the State Register on December 31, 2014, I.D. No. DFS-52-14-00009-P. The emergency rule will expire June 9, 2015.

Emergency rule compared with proposed rule:

Substantial revisions were made in sections 400.2, 400.4, 400.5, 400.6, 400.7, 400.8 and 400.9.

Text of rule and any required statements and analyses may be obtained from:

Colleen Rumsey, New York State Department of Financial Services, One Commerce Plaza, Albany, NY 12257, [phone], email: [e-mail]

Data, views or arguments may be submitted to:

Same as above.

Public comment will be received until:

30 days after publication of this notice.

Revised Regulatory Impact Statement

1. Statutory authority: The authority of the Superintendent of Financial Services (“Superintendent”) to promulgate new Part 400 to 23 NYCRR derives from Financial Services Law Sections 202, 301, 302 and Article 6 and Insurance Law Section 301.

Section 202 of the Financial Services Law establishes the office of the Superintendent and designates the Superintendent as the head of the Department of Financial Services (“Department”).

Section 301 of the Financial Services Law authorizes the Superintendent to take such action as the Superintendent deems necessary to protect and educate users of financial products and services.

Section 302 of the Financial Services Law and Section 301 of the Insurance Law authorize the Superintendent to effectuate any power accorded to the Superintendent by the Insurance Law, the Banking Law, the Financial Services Law or any other law of this state and to prescribe regulations interpreting the Insurance Law.

Article 6 of the Financial Services Law establishes an independent dispute resolution (“IDR”) process through which a dispute involving a bill for emergency services or a surprise bill may be resolved. This law grants the Superintendent the power to certify entities performing the IDR and authorizes the Superintendent to promulgate regulations establishing standards for the IDR process.

2. Legislative objectives: In 2012, the Department released “An Unwelcome Surprise,” a report detailing the issues that lead to consumers receiving unexpected medical bills from out-of-network providers. The report stated that unexpected and sometimes excessive medical bills from out-of-network providers contribute to the growing problem of consumer medical debt, which continues to be a significant cause of personal bankruptcy. The report found that consumers have experienced surprise bills when they do everything they can to stay in-network, yet receive bills from non-participating providers. The report also found that there are often high and unexpected bills for emergency care. Chapter 60 of the Laws of 2014 added a new Article 6 to the Financial Services Law to address this problem. Article 6 provides that consumers must be held harmless for out-of-network emergency bills and surprise bills, and directs the provider and the health plan to work out payment for these bills. Article 6 establishes an IDR process by which a dispute involving a bill for emergency services or a surprise bill may be resolved. The statute also gives the Superintendent the authority to grant and revoke certifications of independent dispute resolution entities (“IDREs”) and to adopt rules necessary in order to implement the IDR process.

3. Needs and benefits: Article 6 establishes an IDR process by which a dispute for a bill for emergency services or a surprise bill may be resolved. This rule is necessary in order to implement the IDR process required under the statute.

This rule details certification requirements for IDREs, and requires each proposed IDRE to demonstrate that it meets these requirements. The rule prohibits a proposed IDRE and its reviewers from having affiliations with entities involved in the dispute because of a potential conflict of interest.

The rule sets forth the responsibilities of health care plans, providers, patients and IDREs in relation to the IDR process and details the process to submit disputes regarding emergency services and surprise bills. The rule provides that once a dispute is submitted for review by an IDRE, the parties must provide certain information specified by the statute. Within three days of receipt of a dispute, the IDRE shall screen the application for conflicts of interest, review the application to determine if the dispute is eligible for the IDR process and, if necessary, contact the parties for additional information needed to determine eligibility. Within three days of determining that the dispute is eligible, the IDRE shall send notification of the assignment to the parties and ask for all information to be submitted within five business days. The IDRE may direct the parties to attempt a good faith negotiation for settlement and the IDRE must have the dispute reviewed by a neutral and impartial reviewer with knowledge of billing and usual, customary, and reasonable rates, in consultation with a licensed physician in active practice. The IDRE must make a determination within 30 days of receipt of the request for independent dispute resolution, choosing either the provider bill or the health plan payment.

The rule establishes requirements for record retention and compliance by IDREs and describes how payment for the independent dispute resolution process will work. The losing party pays the cost of the dispute resolution with an exception for a patient who brings a dispute, does not prevail, and for whom payment would pose a hardship.

4. Costs: Insurers and providers should incur minimal additional costs to comply with the requirements of the rule. This rule implements the IDR process required by Financial Services Law Article 6. The minimal costs for physicians may include costs to provide an assignment of benefits form with bills for out-of-network services, although some physicians may have similar processes already. If a physician or other provider submits a dispute for resolution, the person or persons who already handle billing for the physician or provider would most likely be able to submit the dispute. Other costs include the cost of the IDR process, which is paid by the losing party to the dispute as required by Financial Services Law Article 6. The Department will contract with IDREs and approve the fees the IDREs charge for the IDR process. The minimal costs for insurers may also include costs to provide insureds with notice about a surprise bill and information how to proceed. However, insurers currently provide an explanation of benefits to insureds and the requisite notice may be contained within the existing explanation of benefits or accompany it in order to mitigate costs.

The Department will incur costs to implement the independent dispute resolution process as the Department is responsible for overseeing the process and certifying the IDREs. However, these costs will be incurred due to the statute. Moreover, the costs to the Department should be minimal as the independent dispute resolution entities will conduct the actual review of the disputes. There are no costs to any other state government agency or local government.

5. Local government mandates: The rule imposes no new programs, services, duties or responsibilities on any county, city, town, village, school district, fire district or other special district.

6. Paperwork: This rule implements the IDR process by which a dispute for a bill for emergency services or a surprise bill may be resolved and identifies the information that must be submitted to the IDRE, as required pursuant to Financial Services Law Article 6. Health care plans, providers and patients will need to submit an application in order to pursue a dispute. This rule also requires an IDRE to retain case records in accordance with 11 NYCRR 243 for audit and examination for a period of six years from the date of the IDRE’s determination. The IDRE must maintain on file each attestation required to be submitted under the rule for six years from the date of the determination. The rule further requires an IDRE to provide the Superintendent data, information and reports as the Superintendent determines necessary to evaluate the dispute resolution process within two business days or such other period acceptable to the superintendent.

7. Duplication: This rule will not duplicate any existing state rule.

8. Alternatives: This rule implements the IDR process for bills for emergency services and surprise bills. The Department met with stakeholders during the development of the rule. Alternatives were suggested during these meetings regarding the reviewer of the dispute. Suggested alternatives included to have the dispute reviewed solely by a physician reviewer, solely by a non-physician reviewer, solely by a retired physician, solely by an in-network physician and solely by an out-of-network physician. Financial Services Law Section 601 requires that IDREs use licensed physicians in active practice in the same or similar specialty as the physician providing the service that is the subject of the dispute. The Department decided that IDREs must use a non-physician reviewer to render a determination in consultation with a physician reviewer. The regulation also includes standards to prohibit conflicts of interest. The Department believes this approach is consistent with the law, will ensure fair decisions, and will help to minimize the costs of the review.

The Department also considered alternatives regarding the notice that the health plan must send to the insured and non-participating provider when a claim for a surprise bill is received. The Department originally considered requiring health plans to send a detailed notice upon receipt of a potential surprise bill to both the insured and the non-participating provider. Stakeholders indicated that, without an assignment of benefits form, health plans would be unable to determine whether a claim may be for a surprise bill upon receipt and that it would be cumbersome to send the notice in response to all claims involving the services of non-participating providers. Therefore, the rule requires health plans to provide detailed notice to the insured and non-participating provider only when an assignment of benefits form is submitted with the claim or the health plan otherwise determines that the claim is for a surprise bill. When the health plan receives a claim that may be a surprise bill but is not submitted with an assignment of benefits form, the health plan must send an abbreviated notice to the insured directing the insured to contact the health plan or visit its website for information regarding surprise bills.

A suggested alternative was to require the IDRE to divulge the name of the reviewer and reviewing physician. As with the current External Appeal process for independent review of utilization review denials by health plans, anonymity provides the reviewer and the reviewing physician the ability to independently determine the dispute without the concern that they could be contacted by a party involved in the dispute. The IDREs may have difficulty attracting reviewers and physicians to their panels if their identity is revealed. The IDRE will provide a biography of the reviewer and the reviewing physician in order to show that they meet the required qualifications.

A suggestion was made to permit IDRE determinations to be reconsidered. Financial Services Law Sections 605(c) and 607(c) provide that the determination of the IDRE is binding but admissible in court proceedings and reconsideration is not contemplated.

A suggestion was made to prohibit information from being submitted to the IDRE regarding in-network rates, Medicare and Medicaid rates. Financial Services Law Section 604 sets forth the criteria that the IDRE must consider, which includes UCR and does not include other rates. However, the Law does not prohibit any other information from being submitted. Nevertheless, the IDRE is not bound by any other additional information submitted.

9. Federal standards: Public Health Service Act Section 2719A (42 U.S.C. § 300gg-19a) requires health care plans to cover emergency services. Federal regulations implementing this law (45 CFR § 147.138(b)) require health care plans and insurers to reimburse out-of-network providers of emergency services the greatest amount of the following three amounts: (1) the amount negotiated with in-network providers for the emergency service, excluding any in-network copayment or coinsurance; (2) the amount for the emergency service calculated using the same method the plan generally uses to determine payments for out-of-network services, excluding any in-network copayment or coinsurance; or (3) the amount that would be paid under Medicare (Part A or B of Title XVIII of the Social Security Act) for the emergency service, excluding any in-network copayment or coinsurance. Health care plans must reimburse out-of-network providers of emergency services at least the amount described in the federal rule but may pay the out-of-network provider additional amounts. The IDR process established under this rule will allow health care plans and providers to dispute amounts above the federal requirement.

10. Compliance schedule: The rule will take effect on March 31, 2015 and will affect health care services provided on and after March 31, 2015.

Revised Regulatory Flexibility Analysis

1. Effect of the rule: This rule affects all health maintenance organizations (“HMOs”) and insurers authorized to do business in New York State that use the independent dispute resolution (“IDR”) process set forth in the regulation to resolve disputes for bills for emergency services and surprise bills. Based upon information that those HMOs and insurers have provided in their annual statements and filed with the Department of Financial Services (“Department”), they are not “small businesses” as defined in State Administrative Procedures Act Section 102(8) because they are not independently owned and operated and do not employ 100 or fewer employees.

Small businesses that may be impacted by this rule include physicians and certain other health care providers that participate in the IDR process. The Department does not maintain records of the number of physicians and health care providers licensed in this state. However, the Department has established no reporting requirements with respect to those small businesses. The rule is likely to have a favorable economic impact on small businesses that opt to utilize the IDR process to resolve disputes with insurers, rather than retain attorneys to resolve those disputes on their behalf in court.

This rule does not apply to or affect local governments.

2. Compliance requirements: This regulation will not impose any reporting, recordkeeping, or other compliance requirements on small businesses or local governments. The regulation only implements the IDR process for bills for emergency services and surprise bills as required pursuant to Financial Services Law Article 6.

3. Professional services: This regulation does not require any small business affected by this rule to use any professional services to comply with this regulation. Local governments are not affected by the rule, and thus will have no need for such services.

4. Compliance costs: This rule will have no impact on compliance costs for local governments, and may only have a minimal impact on compliance costs for small businesses. Those costs may include costs to provide an assignment of benefits form with bills for out-of-network services, although some physicians may have similar processes already. Other costs include the cost of the IDR, which is paid by the losing party to the dispute. However, the rule only establishes standards for an IDR process that is prescribed by statute. Furthermore, any costs to small businesses to participate in the IDR process should be much less than costs to litigate a bill dispute in court.

5. Economic and technological feasibility: Small businesses and local governments should not incur any economic or technological impact as a result of the regulation.

6. Minimizing adverse impact: This rule should have no adverse impact on small businesses or local governments because it only establishes standards for an IDR process prescribed by statute, and participation in the IDR process is voluntary. The rule may have a positive economic impact on providers who obtain favorable determinations with respect to disputes with insurers regarding reimbursement for emergency services and surprise bills.

7. Small business and local government participation: Interested parties, including small businesses, were afforded the opportunity to comment on this regulation, and the Department held numerous meetings with stakeholders to discuss the regulation. Interested parties were also given an opportunity to comment on the proposed rulemaking that was published in the State Register on December 31, 2014.

Revised Rural Area Flexibility Analysis

The Department of Financial Services (“Department”) finds that this rule does not impose any additional burden on persons located in rural areas and that it will not have an adverse impact on rural areas. This rule applies uniformly to regulated parties that do business in rural and non-rural areas of New York State.

Interested parties, including those located in rural areas, were given an opportunity to comment on the drafting of this rule and the Department held several meetings with HMOs, insurers, physicians, other providers and consumer groups. Interested parties were also given an opportunity to comment on the proposed rulemaking that was published in the State Register on December 31, 2014.

Revised Job Impact Statement

The Department of Financial Services finds that this rule should have no substantial adverse impact on job or employment opportunities in New York. The rule implements Article 6 of the Financial Services Law, which establishes an independent dispute resolution (“IDR”) process by which health maintenance organizations, insurers, physicians, and in certain cases, patients and other health care providers may submit a dispute involving bills for emergency services and surprise bills for IDR. Article 6 provides that the Superintendent shall select and certify an independent dispute resolution entity (“IDRE”) to oversee the IDR process. Serving as an IDRE is voluntary.

Because Article 6 requires the IDRE to utilize licensed physicians for the IDR process, this rulemaking is likely to promote job and employment opportunities in the State.

Assessment of Public Comment

The Department of Financial Services (“Department”) received comments from ten interested persons in response to its proposed new Part 400 to 23 NYCRR, some of which were incorporated into the emergency and revised rulemaking, discussed below.

Comments:

Commenters requested that 23 NYCRR Section 400.1 apply to coverage in the New York State of Health (NYSOH) and to certain out-of-state services, and questioned whether the regulation applies to dental coverage.

Response:

The independent dispute resolution (IDR) process applies to NYSOH coverage. The IDR process is not applicable to stand-alone dental coverage. Dental services do not meet the definition of “surprise bill” because a participating physician would not be providing the referral or services and dental coverage would not typically cover emergency services as defined in Financial Services Law Section 603.

A service associated with a surprise bill need not be provided in its entirety in New York to be subject to the IDR process. E.g., an insured is covered under an HMO or insurance policy or contract that is issued for delivery in New York and has blood drawn in New York by a participating physician. The participating physician sends the sample to an out-of-state laboratory that regularly conducts business with the New York provider. In such cases, the laboratory may be providing services in New York and subject to the IDR process. The intent of the legislation is to protect patients from surprise bills when they receive services from their participating physicians in New York.

Comments:

Commenters requested revision of the 23 NYCRR Section 400.2 definitions of “reviewer” to remove the requirement for experience with usual and customary costs, “reviewing physician” to add conflict of interest standards, and “usual and customary cost”.

Response:

The definition of “reviewer” was not revised because Financial Services Law Section 604 requires the IDRE to consider the usual and customary cost. The definition of “reviewing physician” was not revised because conflict of interest prohibitions are in 23 NYCRR Section 400.4(d). The definition of “usual and customary cost” was revised to mirror the definition in Financial Services Law Section 603(i). The database referenced in the definition of “usual and customary cost” is not expected to include all charges for each health care service. It is understood that some charges may not be reported to the database.

Comments:

Commenters requested revisions to 23 NYCRR Sections 400.3 and 400.4 to (1) prohibit IDREs from reviewing disputes when they acquire or become controlled by an advocacy group or association of providers or health plans; (2) include officers, directors, or managers of a physician’s medical group, independent practice association, or health care facility when determining conflicts of interests for IDREs; (3) prohibit a reviewer or physician from reviewing a dispute when they have a conflict with an affiliate of the health plan involved in the dispute when all IDREs have disqualifying conflicts of interest; (4) prohibit the reviewing physician from contracting to participate with the health plan that is a party to the dispute; (5) require the reviewing physician to be retired or prohibited from providing out-of-network services; and (6) remove the control test for determining IDRE conflicts of interest.

Response:

The regulation incorporates the changes requested in (1) – (3).

The regulation does not incorporate the changes requested in (4) – (6). Financial Services Law Section 601 requires IDREs to use licensed physicians in active practice in the same or similar specialty as the physician providing the service and, to the extent practicable, the physicians must be licensed in New York. Including retired physicians in the IDRE panel is not permitted. Prohibiting reviewing physicians from providing out-of-network services would limit the IDRE’s ability to attract physicians to its panel. The reviewing physician may not review disputes involving a health plan when the reviewing physician has a material familial, financial or professional affiliation with the health plan. The control test is necessary to identify what constitutes a conflict of interest.

Comments:

Commenters requested revisions to 23 NYCRR Section 400.5 to (1) only require the health plan to provide the insured with IDRE information when it pays less than the provider’s charge; (2) remove the reference to a substantially similar assignment of benefits form; (3) set a timeframe for payment to the physician or provider when the IDRE finds in their favor; (4) remove the requirement for health plans to provide notice describing how to initiate the IDR process when the non-participating physician submits the claim; (5) remove the requirement for health plans to provide notice to insureds when health plans determine a bill is a surprise bill before receipt of the assignment of benefits form; (6) limit the health plan’s obligation to notify the insured that the claim could be a surprise bill to claims from providers likely to have surprise bills; and (7) reiterate that the IDR process is not applicable to certain emergency services specifically exempted by law. Commenters also questioned the applicability of the hold harmless protection to surprise bills, and the effective dates for the hold harmless protections for emergency services.

Response:

The regulation incorporates the changes requested in (1) – (2), and also requires the health plan to pay additional amounts to the provider within 30 days of the IDRE’s determination.

The requirement to send the non-participating physician notice was not changed, as it is important that physicians be informed of the IDR process during the claim adjudication process.

The provision requiring notice when a health plan otherwise determines that a bill is a surprise bill was not removed. Some health plans are able to identify surprise bills upon claim submission and the regulation does not impose an obligation on health plans that are unable to identify a surprise bill without an assignment of benefits form. The requested change to limit notice only when the claim involves a provider likely to have surprise bills was not made. Consumers must be informed of their protections, and the notification requirements are not burdensome.

23 NYCRR Section 400.1 states that the regulation does not apply to emergency services subject to Financial Services Law Section 602(b).

The requested change regarding the hold harmless protection for surprise bills was not made. The intent of the legislation was to remove insureds from payment disputes between health plans and providers. The legislation requires health plans to provide coverage for surprise bills and specifically provides that the insured cannot be subject to any greater out-of-pocket costs than the insured would have incurred with a participating physician or provider.

The regulation was revised to address the varying effective dates for the hold harmless provisions for emergency services.

Comments:

Commenters requested changes to 23 NYCRR Section 400.6 to (1) remove the requirement that non-participating referred health care providers include a claim form and an assignment of benefits form when they bill patients; (2) permit a non-participating physician to have “at least” seven business days to respond to a health plan’s offer, except when the seven business days would cause the health plan to violate Insurance Law Section 3224-a; and (3) prohibit physicians from seeking payment for emergency services beyond the health plan’s payment once a claim has been submitted to the IDRE.

Response:

The regulation incorporates the change requested in (1). The regulation was also revised to allow the non-participating physician or provider “at least” seven business days to respond to a health plan’s offer. This provision is intended to allow the provider time to respond but was never intended to permit the health plan to delay payment.

Once an IDRE renders a determination, the parties are bound by the determination and insureds are only responsible for their in-network cost-sharing.

Comments:

Commenters requested changes to 23 NYCRR Section 400.7 to (1) require the fees submitted by the health plan to represent the final payment to the physician; (2) extend the period of time for fee information to 24 months; (3) permit multiple CPT codes to be submitted if more than one is applicable to a patient; (4) delete the references to “if applicable” and “if available” after “usual and customary cost”; (5) prohibit health plans from submitting Medicaid, Medicare, or other network fee data to the IDRE; (6) remove the usual and customary cost from the information that health plans and providers submit; (7) require health plans to provide the names and numbers for the physicians who received the listed payments; and (8) clarify the criteria used to determine a gross disparity when determining a reasonable fee.

Response:

The regulation was revised to (1) provide that the fee information must reflect the final payment; and (2) permit fee examples from the last 24 months, because physicians and health plans may not have three examples from the previous 12 months for services that are infrequently provided.

The IDR process will review the services provided to the patient, which may consist of one or many procedure codes.

The language “if applicable” was intended to address when the usual and customary cost does not exist. The Department added language that the usual and customary cost is to be provided when the benchmarking database contains the usual and customary cost for the service.

The intent of the term “if available” was to permit physicians to submit the usual and customary cost if they have access to the information, but not require them to submit it. The regulation was revised to remove the physician’s and provider’s obligation to submit the usual and customary cost.

The regulation requires health plans to provide the usual and customary cost since they likely have access to the information. If the IDRE gains access to the usual and customary cost data in a cost efficient manner, the Department will consider removing the requirement.

Financial Services Law Section 604 requires the IDRE to consider specifically enumerated factors, including the usual and customary cost but not including other rates. The law does not prohibit any other information from being submitted. However, the IDRE is not bound by additional information submitted.

With respect to the health plan providing the names and contact numbers for the physicians who received the payments, the regulation provides that the IDRE may request any information it needs from the parties to the IDR.

The IDRE must consider the criteria found in Financial Services Law Section 604 to determine a gross disparity.

Comments:

The Department received comments requesting revisions to 23 NYCRR Section 400.8 of the regulation to (1) state that the IDRE must choose either the health plan’s payment or the provider’s charge; (2) require the IDRE to divulge the name of the reviewer and reviewing physician; and (3) permit an appeal of a dispute in cases of gross negligence or abuse of discretion by an IDRE.

Response:

The regulation was changed to reference requirements in Financial Services Law Sections 605 and 607 that the IDRE choose either the health plan’s payment or the provider’s charge.

Changes were not made to require the IDRE to divulge the reviewer or reviewing physician. Anonymity provides the reviewer and the reviewing physician the ability to independently determine the dispute without the concern that they could be contacted by the parties involved in the dispute. IDREs may have difficulty attracting reviewers and physicians to their panels if their identity is revealed. IDREs will provide biographies to show the reviewers meet the qualifications required to review disputes.

Finality of the IDR is important for the process to run effectively and the law states that the decision is binding but admissible in court proceedings.

Comment:

A commenter recommended revising 23 NYCRR Section 400.9(e) to require IDREs to comply with privacy and confidentiality requirements.

Response:

The Department added a requirement that the IDRE comply with Parts 420 and 421 of 11 NYCRR with respect to confidentiality of information.

Comments:

Commenters requested (1) dispute information be made available upon request to the Department; (2) the cost of the IDR process should be low; (3) the penalties for violating Insurance Law Section 2601(a)(7) be added; (4) the IDR process favor the physician’s bill; and (5) the effective date be changed to April 1, 2015.

Response:

(1) Requests made to the Department for dispute information will be individually reviewed and determined in accordance with applicable law.

(2) The regulation does not address actual costs of the IDR process; only the party responsible to pay the costs.

(3) The regulation does not specify the penalties for violating Insurance Law Section 2601(a)(7) because they are specified in Insurance Law Section 109.

(4) The IDR process was intended to provide an independent, unbiased review for physician and health plan billing disputes.

(5) An effective date set by law cannot be changed by regulation.