PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following proposed rule:
Proposed Action:
Amendment of Subpart 69-10 of Title 10 NYCRR.
Statutory authority:
Public Health Law, section 2999-j
Subject:
Medical Indemnity Fund.
Purpose:
To provide additional guidance and clarity to the Fund's requirements and operations.
Substance of proposed rule (Full text is posted at the following State website:www.health.ny.gov):
As authorized by section 2999-j(15) of the Public Health Law (“PHL”), the New York State Commissioner of Health, in consultation with the Superintendent of Financial Services, has promulgated these regulatory amendments to provide more detail on the structure within which the New York State Medical Indemnity Fund (“Fund”) will operate. These amendments provide the following:
(1) revisions to the definition of “assistive technology” to clarify which items fall within the definition;
(2) revisions to the definition of “environmental modification” to clarify which items do not fall within the definition;
(3) a new definition for “exterior physical adaptation” to clarify which items will be covered as environmental modifications;
(4) revisions to the definition of “qualifying health care costs” to include co-insurance, amounts paid toward a deductible, and services provided in accordance with an Individualized Education Program, and to exclude tuition;
(5) revisions to the definition of the term “respite” to clarify what is covered;
(6) revisions to the enrollment process to clearly set forth the Fund Administrator’s responsibilities regarding application review, eligibility determinations and notifications;
(7) revisions to the general prior approval language to provide a six month effective period for such approvals unless a different time period is specified in the approval letter and to make it clear that if prior approval is required but not obtained, the claim will not be paid by the Fund;
(8) revisions to the prior approval requirements for environmental modifications to clearly specify standards for comprehensive evaluations, provide detail on approving repairs or replacements, waive prior approval requirements for repairs or replacements that cost $500 or less, and limit conditional prior approval to environmental modifications needed to ensure the enrollee’s safety;
(9) revisions to the prior approval requirements for specialty drugs to require the Fund Administrator to publish a list of specialty drugs on its website and to clarify which documents are needed to approve such requests; and
(10) revisions to the rate regulation to provide rates related to travel costs and services provided outside the United States, allow use of alternate UCR databases, and clarify that the Fund will pay no more than the actual amount billed.
Text of proposed rule and any required statements and analyses may be obtained from:
Katherine Ceroalo, DOH, Bureau of House Counsel, Reg. Affairs Unit, Room 2438, ESP Tower Building, Albany, NY 12237, (518) 473-7488, email: regsqna@health.ny.gov
Data, views or arguments may be submitted to:
Same as above.
Public comment will be received until:
45 days after publication of this notice.
Regulatory Impact Statement
Statutory Authority:
Title 4 of Article 29 of the Public Health Law (PHL) creates the New York State Medical Indemnity Fund (Fund) to provide a source of funding for all future qualifying health care costs of a plaintiff or claimant who sustained birth-related neurological injuries as the result of medical malpractice in order to reduce premium costs for medical malpractice insurance coverage.
Subdivision 3 of section 2999-h of the PHL sets forth a broad definition of “qualifying health care costs” for services and supplies provided to qualified plaintiffs and provides authority for the Commissioner of Health (Commissioner) to further define such qualifying health care costs in regulation.
Section 2999-i of the PHL requires the Superintendent of Insurance (Superintendent) to administer the Fund and the Commissioner of Taxation and Finance to be the custodian of the Fund for which a special account is created pursuant to section 99-t of the State Finance Law. Subdivision 2 of section 2999-i of the PHL authorizes the Superintendent to enter into a contract to administer the Fund (Administrator) and subdivision 6 requires the Superintendent to conduct actuarial calculations of the estimated liabilities of the Fund and suspend enrollment in the Fund if the estimated liabilities equal or exceed 80% of the Fund’s assets.
Section 2999-j of the PHL governs payments from the Fund and includes broad standards for the Fund enrollment process, payment of costs by collateral sources, rates to be paid to providers of qualifying health care services, prior authorization for certain services, and the claims processing requirements for reimbursement of qualifying health care costs. Subdivision 2 of section 2999-j of the PHL requires any applicable prior authorization requirements to be promulgated by the Commissioner in regulation and subdivision 4 of such section requires the Commissioner to define in regulation “the basis of one hundred percent of the usual and customary rates” to be paid for services provided by private physician practices and for all other services, any rates of payment to be paid on a basis other than Medicaid rates.
Lastly, subdivision 15 of section 2999-j of the PHL specifically states that the Commissioner, in consultation with the Superintendent, “ shall promulgate. . . all rules and regulations necessary for the proper administration of the fund in accordance with the provisions of this section, including, but not limited to those concerning the payment of claims and concerning the actuarial calculations necessary to determine, annually, the total amount to be paid into the fund as otherwise needed to implement this title.”
Legislative Objectives:
The Legislature delegated the details of the Fund’s operation to the Department of Financial Services (DFS) and the Department of Health (DOH), the two State agencies that have the appropriate expertise to develop, implement and enforce all aspects of the Fund’s operations. These proposed regulations reflect the collaboration of both agencies in providing the administrative details of the manner in which the Fund will operate. Specifically, the regulations provide a clear process for enrollment of plaintiffs or claimants who sustained birth-related neurological injuries as the result of medical malpractice. Additionally, they create standards governing the qualifying health care costs to be paid by the Fund and the rates at which they will be paid, keeping in mind the two Legislative objectives of lifetime coverage for all current and future enrollees and reducing premium costs for medical malpractice insurance coverage.
Needs and Benefits:
These regulations are needed because Title 4 of Article 29 of the PHL provides only broad standards governing operation of the Fund, some of which include a specific requirement to further define criteria in regulation, and to provide the details necessary to make the Fund operationally successful for all parties, including qualified plaintiffs, Fund enrollees, providers of qualifying health care services, the Administrator, and the two agencies charged with operating the Fund. All parties will benefit from specific standards governing their respective roles regarding the Fund by providing: (1) a smooth application and enrollment process, including clearer and more detailed standards regarding the Fund Administrator’s responsibilities for processing such applications; (2) clearer definitions of “assistive technology,” “environmental modification,” “qualifying health care costs,” and “respite” and a new definition of “exterior physical adaptation” to provide greater enrollee understanding of the items for which the Fund will pay; (3) revisions to the prior approval requirements for environmental modifications, assistive technology, and treatment with a specialty drug, in order to make each process work more efficiently, including clearer standards for comprehensive evaluations, waiving requirements for repairs and replacements that cost $500 or less, limiting conditional prior approval to environmental modifications needed to ensure an enrollee’s safety, and publishing a list of specialty drugs on the Fund Administrator’s website; (4) expanded coverage of certain transportation which is medically necessary to relocate an enrollee to a new primary residence, in addition to transportation which may be needed to medical appointments, and including specific rates for travel costs consistent with rates in the Medicaid program as required by PHL Section 2999-j(4) and (5) guidelines for rates related to services provided to enrollees outside the United States.
Costs:
Costs to Regulated Parties:
There are no costs imposed on regulated parties by these regulations. Qualified plaintiffs will not incur any costs in connection with applying for enrollment in the Fund or coverage by the Fund.
Costs to the Administering Agencies, the State, and Local Governments:
Costs to administering agencies and the State associated with the Fund will be covered by applicable appropriations, as provided in subdivisions 3 through 5 of section 2999-i of the PHL. There are no costs imposed on local governments by these regulations.
Local Government Mandates:
The proposed regulations do not impose any new programs, services, duties or responsibilities upon any county, city, town, village, school district, fire district or other special district.
Paperwork:
The proposed regulations impose paperwork requirements on regulated parties by requiring (1) during the enrollment process, the Fund Administrator must notify the applicant if additional information is required, when the applicant is enrolled in the Fund, and provide the name and contact information of the assigned case manager; (2) during the prior approval process for environmental modifications, the Fund Administrator must notify the enrollee that a comprehensive evaluation must be completed after the written statement from the enrollee’s physician has been reviewed; and (3) regarding specialty drugs, the Fund Administrator must publish on its website a list of medications that meet the definition of specialty drugs.
Duplication:
There are no other State or Federal requirements that duplicate, overlap, or conflict with the statute and the proposed regulations. Although some of the services to be provided by the Fund are the same as those available under certain Medicaid waivers, the waivers have limited slots and the Fund becomes the primary payer for dually enrolled individuals. Coordination of benefits will be one of the responsibilities of the Fund Administrator. Health care services, equipment, medications or other items that any commercial insurer providing coverage to a qualified plaintiff is legally obligated to provide will not be covered by the Fund (except for copayments and/or deductibles) nor will the Fund cover any health care service, equipment, or other item that is potentially available through another State or Federal program (except Medicaid and Medicare) or similar program in another country, if applicable.
Alternatives:
DFS and DOH have considered multiple alternatives to the proposed regulatory requirements and have made recent changes to the Express Terms to reflect more reasonable approaches to certain situations enrollees might face. For example:
(1) In the case of prior approval requests for environmental modifications, the amendments provide more detail about which items do not fall within the definition. The agencies considered leaving the definition broad but changed the Express Terms to avoid continued enrollee confusion about which items are approvable as qualifying health care costs.
(2) In the case of prior approval for assistive technology (AT), the amendments provide significantly more detail on the prior approval process, including what is required to be provided in an AT assessment. The agencies considered leaving the process more general but changed the Express Terms to avoid continued enrollee confusion regarding what is required when seeking approval for these items.
(3) The prior approval process for repairs or replacement of an environmental modification used to require three acceptable bids for all items or service. The agencies considered this process to be cumbersome for less costly items or service and changed the Express Terms to allow an enrollee to arrange for the repair or replacement of an environmental modification without prior approval if the cost is $500 or less.
Federal Standards:
There are no minimum Federal standards regarding this subject.
Compliance Schedule:
There is no compliance schedule imposed by these amendment and they shall be effective upon publication of a notice of adoption.
Regulatory Flexibility Analysis
No regulatory flexibility analysis is required pursuant to section 202-b(3)(a) of the State Administrative Procedure Act. The proposed amendment does not impose an adverse economic impact on small businesses or local governments, and it does not impose reporting, record keeping or other compliance requirements on small businesses or local governments.
Cure Period:
Chapter 524 of the Laws of 2011 requires agencies to include a “cure period” or other opportunity for ameliorative action to prevent the imposition of penalties on the party or parties subject to enforcement when developing a regulation or explain in the Regulatory Flexibility Analysis why one was not included. This regulation creates no new penalty or sanction. Hence, a cure period is not necessary.
Rural Area Flexibility Analysis
No rural area flexibility analysis is required pursuant to section 202-bb(4)(a) of the State Administrative Procedure Act. The proposed amendment does not impose an adverse impact on rural areas, and it does not impose reporting, record keeping or other compliance requirements on public or private entities in rural areas.
Job Impact Statement
No job impact statement is required pursuant to section 201-a(2)(a) of the State Administrative Procedure Act. It is apparent, from the nature of the proposed amendment, that it will not have an adverse impact on jobs and employment opportunities.
