WCB-14-15-00009-P Health Insurance Matching Program (HIMP)

4/8/15 N.Y. St. Reg. WCB-14-15-00009-P

NEW YORK STATE REGISTER

VOLUME XXXVII, ISSUE 14

April 08, 2015

RULE MAKING ACTIVITIES

WORKERS' COMPENSATION BOARD

PROPOSED RULE MAKING

NO HEARING(S) SCHEDULED

 

I.D No. WCB-14-15-00009-P

Health Insurance Matching Program (HIMP)

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

Proposed Action:

Repeal of Subparts 325-5 and 325-6; and addition of new Subparts 325-5 and 325-6 to Title 12 NYCRR.

Statutory authority:

Workers' Compensation Law, sections 117, 13(d) and (h)

Subject:

Health Insurance Matching Program (HIMP).

Purpose:

Provide the process for health insurers to recover from workers' compensation carriers.

Substance of proposed rule (Full text is posted at the following State website:wcb.ny.gov):

Subparts 325-5 and 325-6 are repealed and new Subparts 325-5 and 325-6 are added.

Section 325-5.1 is unchanged.

Section 325-5.2 has been added that includes the definitions contained in 325-6.1, amends the definition of health insurer to clarify that provisions related to a health insurer include a health insurer “when acting directly or through a HIMP agent.” Section 325-5.2 adds a new definition for a HIMP agent at subparagraph (h).

Section 325-5.3 has minor changes to reflect changes in the HIMP process.

Section 325-5.4, formerly 325-5.2, describes eligibility to participate in the program and clarifies the roles of insurers and HIMP agents.

Section 325-5.5, formerly Section 325-5.6, subparagraph (a) permits the Chair to prescribe the format and content for computer searches. Subparagraph (b) sets forth a time limitation for the insurer to obtain a computer match of 360 days between the date of accident for the compensation injury and the date of treatment for which the health insurer seeks reimbursement. Subparagraph (c) defines what constitutes a “full match” and subparagraph (d) defines what constitutes a “partial match.” Subparagraph (g) describes the process for access to the Board’s electronic case files and for manual searches of archived paper files by Board staff.

Section 325-5.6, formerly Section 325-5.7, increases the fee for each search from $.043 to $.045. The new 325-5.6 increases the fee for manual review of an archived Board file from $1.795 to $2.50, and requires the health insurer to pay the copying costs for such file. Section 325-5.6 eliminates the $25 fee for a manual search for Board records. Copying costs are as prescribed in the Public Officer’s Law, section 87(1)(b)(iii).

In addition to requiring the insurer to report the total amount recovered under the HIMP program each year, section 325-5.7, formerly Section 5.11, requires reporting of the total amount of reimbursement requested, the number of arbitrations requested and the number of arbitrations resolved in favor of the insurer, and the names of medical providers who received duplicate payments from the insurer and the carrier.

Section 325-5.8, formerly Section 325-5.5(a), imposes a penalty of $10,000 for misuse of confidential information as provided in subdivision (h) of section thirteen of the Workers’ Compensation Law.

The cross-references in Section 325-5.9 have been updated.

Section 325-6.1 is now in alphabetical order and a definition for HIMP agent has been added.

In Section 325-6.2 clarifies that when a health insurer receives a full match on a claim, the health insurer does not need to resubmit subsequent treatments for that claimant to the Board seeking a new full match on the identical case. Section 325-6.3 has been revised to clarify and simplify the process and time limitations for filing a HIMP-1 claim form filed by a health insurer with a compensation carrier. In addition, the health insurer must now include standard medical codes, such as ICD, CPT and DRG codes, on the HIMP-1 claim form to enhance the carrier’s ability to compare the request for reimbursement against the information in the matching workers’ compensation case. Section 325-6.3 also describes the process for a carrier to obtain clarifying medical records.

Section 325-6.4 has been amended to provide that the carrier may object to requests for reimbursement (1) if the treatment was provided on or after the date that the Board approved a waiver on the part of the claimant to the right to medical treatment in connection with a settlement under WCL Section 32; (2) if the carrier would not be obligated to pay for the treatment pursuant to WCL Section 29 because the claimant recovered proceeds from a third party and the corresponding carrier lien or offset has not been extinguished; 3) if the treatment was not made in accordance with the medical treatment guidelines; and 4) when authorization for the treatment had been previously sought by the medical provider from the compensation carrier and the authorization was denied.

Section 325-6.5 has minor updates in the terms used.

Section 325-6.6 describes the timelines pertaining to requests for arbitration. While the substantive provisions have not been modified, the text has been clarified.

Section 325-6.7, formerly Section 325-6.11, describes the process for initiating arbitration.

Section 325-6.8, formerly Section 325-6.12, describes the process for withdrawing arbitration requests.

In Section 325-6.9, formerly Section 325-6.11, in subparagraph (b) the time to request oral hearing for arbitration has been changed from 10 business days to 14 days and the Board no longer plays a role in selecting the location for such arbitration. Subparagraph (c) reiterates that the dispute forum shall set the date, time and location of an oral hearing and permits such hearings to take place via video-conference.

Section 325-6.10, formerly Section 325-6.15, increases the fee for a desk arbitration from $150 to $175. Subparagraph (c) provides for a $150 fee for requests for reconsideration made pursuant to the Section 325-6.12. The fees for oral hearing are unchanged.

Section 325-6.11, formerly Section 325-6.13, subparagraph (a) adds a sentence permitting a party to seek reconsideration pursuant to Section 325-6.12. In addition to updating the cross-references in subparagraph (c) the time for service has been changed from 10 business days to 14 calendar days. Subparagraph (d) has been updated to remove the reference to a “stenographic” record. The fees charged when an adjournment is requested are unchanged.

Section 325-6.12, formerly Section 325-6.14, incorporates the new means of service defined in Section 325-6.15. Subparagraph (b) permits recovery of the fee for manual searches by the health insurer in arbitration when the health insurer prevails. Subparagraph (c) permits the arbitrator to impose a fee of a $1000 for a frivolous or bad faith request for arbitration or request for reconsideration of an arbitration decision. Subparagraph (d) describes a process for filing an application for reconsideration of the arbitrator’s decision when it is believed that there is a mistake of law or fact in the arbitrator’s decision.

Section 325-6.13, formerly Section 325-6.16, describes the process for enforcement and appeals of arbitrator’s decisions.

Section 325-6.14, formerly Section 325-6.17, sets forth that the parties are subject to the dispute forum’s rules.

Section 325-6.15 sets forth acceptable methods of service for pre-arbitration service and service of documents related to arbitration. Section 325-6.15 clarifies and expands the methods of service that are available to the parties for requests for reimbursement, payment, and objections, and for requests for arbitration. The language of the regulation contemplates and allows for other means of service of documents that may become available due to further technological advances.

Section 325-6.16 is added to permit health insurers and carriers to modify HIMP processes upon agreement.

Section 325-6.17 establishes a term of three years for arbitrators appointed by the Chair of the Workers’ Compensation Board.

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

Heather MacMaster, Workers' Compensation Board, 328 State Street, Schenectady, NY 12305-2318, [phone], email: [e-mail]

Data, views or arguments may be submitted to:

Same as above.

Public comment will be received until:

45 days after publication of this notice.

Summary of Regulatory Impact Statement

1. Statutory Authority:

The Workers' Compensation Board (Board) is authorized to repeal and add new Subparts 325-5 and 325-6. WCL Section 13(h)(3) authorizes the Chair to adopt rules and regulations to carry out the provisions of WCL Section 13(d)(1) and (2) and WCL Section 13(h).

2. Legislative Objective:

By Chapter 924 of the Laws of 1990, and amended by Chapter 364 of the Laws of 1992, the Legislature created a mechanism whereby health insurers that made payments for medical and/or hospital services for workers’ compensation injuries would be entitled to reimbursement for such payments from the workers’ compensation carrier or employer (carrier) (WCL Section 13[d] and [h]).

3. Needs and Benefits:

Section 325-5 governs the process that is used to assist insurers in identifying claims that the insurers have paid which may be the responsibility of the carrier. Section 325-6 sets forth the procedures for reimbursement requests, arbitration procedures and other rules applicable to disputed requests for reimbursement. The proposal repeals Subparts 325-5 and 325-6 and adds new Subparts 325-5 and 325-6 in order to makes changes to the large scale order of these sections.

In addition, the proposal makes substantive changes to sections 325-5 and 325-6 that reflect how the HIMP process actually operates; to add provisions regarding HIMP agents and electronic access to claimant case folders; to increase the annual reporting requirements for HIMP agents to improve the Board's ability to understand how well the system is functioning; and to modestly increase fees and impose a penalty for misuse of the arbitration process. Substantive changes are described in detail in the complete RIS.

4. Costs:

There are no additional costs to the Board in the added Subparts 325-5 and 325-6.

Health insurers and HIMP agents will be subject to an increase from $.043 to $.045 in the fees for a computer search request. Health insurers and HIMP agents will also be subject to an increase from $1.795 to $2.50 for a manual search of Board records. Copying charges for manual searches will be governed by the fees set forth in the Public Officer’s Law. The Board has eliminated the requirements for duplicate computer searches for subsequent medical bills, thus the proposed rule should reduce the number of computer searches requested by health insurers and HIMP agents. The Board has eliminated the fee of $25 for a search of Board records due to increases in the efficiency of conducting these searches. Health insurers and HIMP agents will also be subject to increased fees to request a desk arbitration for disputed claims from $150 to $175. There is no increase in the fee for an oral hearing. Health insurers, HIMP agents, and carriers will be subject to a fee of $150 for filing a request for reconsideration of an arbitrator’s decision. The request for reconsideration is a new process and is not available in the current regulation. Health insurers, HIMP agents, and carriers will also be subject to a $1000 penalty for each frivolous or bad faith request for arbitration.

5. Local Government Mandates:

Under WCL Section 13(d)(1) the definition of a health insurer or health benefits plan includes a self-insured or self-funded health care benefits plan operated by or on behalf of any business, municipality or other entity. There is only one self-funded or self-insured municipalities for health care benefits currently participating in HIMP using a HIMP agent. If the health insurer is successful at the arbitration, the amount paid to the health insurer is increased by the filing fee paid for the arbitration. This increase is required by statute, WCL Section 13(h)(3), rather than by the regulation.

6. Paperwork:

The repeal and addition of these sections does not add or eliminate any paperwork requirements.

7. Duplication:

HIMP is a unique program administered solely by the Board and therefore there is no duplication.

8. Alternatives:

An alternative to repealing Subparts 325-5 and 325-6 and adding new Subparts 325-5 and 325-6 would be to keep the current regulation in place. However, several of the changes being proposed more accurately reflect the current practices of the Board, as well as the practices of the health insurers and HIMP agents. Keeping the current regulation in place will result in provisions which are inconsistent with current Board practices. The Board seeks to implement the simplest process to assist health insurers in identifying claims for reimbursement, and in resolving disputed requests for reimbursement.

An alternative to the increased fees for search requests would be to keep the current fees in place. However, the proposed increase in the fee for computer search requests ($0.045, up from $0.043) and manual searches ($2.50, up from $1.795) is only a slight increase from when the initial fees were set in 1993. The fee of $25 for manual searches of a Board file has been eliminated. The health insurer pays for copying costs of the Board file.

As to the proposed increase in the fees associated with the arbitration process, an alternative to amending section 325-6.15 would be to keep the current arbitration fees in place. This alternative has proved unsatisfactory and has resulted in an arbitration process that does not adequately meet the present demands of HIMP, and is vulnerable to sharp increases in arbitration filings.

As to the $1,000 penalty which is proposed for each frivolous request for arbitration and for each frivolous request for reconsideration of an arbitrator’s decision, the alternative would be to do nothing. However, the penalty will promote efficiency in the arbitration process by discouraging parties from filing requests for arbitration and/or reconsideration without having a legitimate basis for doing so.

Another alternative would be for the Board to set the penalty at a lower amount. However, setting the penalty at an amount that is lower than $1,000 is less likely to provide a disincentive to those parties who have no legitimate basis for a request for arbitration or reconsideration.

9. Federal Standards:

There are no federal standards applicable.

10. Compliance Schedule:

Affected parties will be able to achieve compliance with the rule upon its adoption.

Regulatory Flexibility Analysis

1. Effect of rule: The proposed rule will affect only those small businesses that participate in the Health Insurance Matching Program (HIMP) and the reimbursement process. The proposed rule will affect all local governments, including the approximately 2300 that are self-insured for workers’ compensation purposes, inasmuch as they may be subject to reimbursement requests by health insurers. However, the proposed rule does not impose any new obligations on either small businesses or local governments. In addition, if a small business or local government is not self-insured, the insurance carrier or State Insurance Fund is responsible for ensuring compliance with this rule. Neither the State Insurance Fund nor private insurance carriers are small businesses. However, other participants in the HIMP process such as attorneys, third party administrators who handle claims for self-insured local governments, group self-insured trusts, HIMP agents and insurance carriers may be small businesses.

2. Compliance requirements: This proposed rule does not require self-insured local governments or small businesses to submit any additional documentation to the Board. The proposed rule clarifies and simplifies the existing requirements and processes for health insurers to seek reimbursement from worker’s compensation carriers and self-insured employers including self-insured local governments.

3. Professional services: In order to comply with the proposed rule, small businesses and self-insured local governments will not be required to hire or utilize any new professional services. As stated above, small businesses must be covered for workers’ compensation by the State Insurance Fund, private insurance carrier or group self-insured, whose responsibility it is to either handle such matters or the services of attorneys or third party administrators. In addition, the clarifications and simplifications to the current regulations will not change current procedures and practice in such a manner to require any additional professional services. It is not anticipated that small businesses and self-insured local governments will have to secure additional professional services in order to comply with the rule changes.

4. Compliance costs: Compliance costs associated with the proposed rule should be minimal as small businesses and self-insured local governments are already participating in this HIMP program. The only additional costs imposed by the rule are a modest increase of $.002 per computer match by a health insurer or HIMP agent, an increase of $.705 per manual search, an increase of $25 in the cost of requesting a desk arbitration and the imposition of a $1000 penalty for the filing of a frivolous request for arbitration. It is noted that the penalty is easily avoided by good business practice. In addition the cost of arbitration and manual searches is recoverable to the party prevailing in the arbitration.

5. Economic and technological feasibility: It will be economically and technologically feasible for self-insured local governments to comply with the proposed rule. The proposed rule is intended to allow for more flexibility in the technological solutions health insurers and workers’ compensation carriers are able to employ throughout the reimbursement process. The proposed rule does not mandate any economic or technological changes by small businesses or local governments.

6. Minimizing adverse impact: The proposed rule will not cause an adverse impact on any small business or self-insured local government. The repeal of Subparts 325-5 and 325-6 and addition of Subparts 325-5 and 325-6 is intended to clarify and simplify the existing rules that have been operating since 1993. The Board has used its own experience with the operation of HIMP, has worked with stakeholders over the years and has sought stakeholder input into the development of the proposed rule, to clarify and simplify the process to ensure that it is administered efficiently and fairly. Procedures on how and when a health insurer may seek reimbursement are already part of the current Subparts 325-5 and 325-6 and WCL § 13(d) and (h).

7. Small business and local government participation: The Chair sought the participation of local governments in the drafting of this rule by meeting with and providing early drafts of the proposed rule to the City of New York. The Chair also sought the participation of small businesses by meeting with various HIMP agents and meeting with insurance carriers who represent small businesses in the HIMP process.

Rural Area Flexibility Analysis

1. Types and estimated numbers of rural areas: The rule applies to all health insurers in all areas of the state, including rural areas, when they participate in the Workers’ Compensation Board’s Health Insurance Matching Program (HIMP) for the purpose of obtaining reimbursement from workers’ compensation carriers and self-insured employers for payment for medical treatment. In addition it applies to workers’ compensation carriers and self-insured employers in rural areas that may be subject to reimbursement requests.

2. Reporting, recordkeeping and other compliance requirements; and professional services: This proposed rule does not increase the reporting, recordkeeping or other compliance requirements from the existing rule. The sole increase in reporting is in the items contained in the health insurer’s annual report to the Board to include the total number of HIMP-1 forms submitted for reimbursement, the total number of requests for arbitration submitted in the prior calendar year, and the number of arbitrations resolved in favor of the health insurer. It is believed that this additional information is maintained by health insurers and HIMP agents in the regular course of business and will not impose any additional recordkeeping burden. This proposed rule diminishes reporting requirements inasmuch as it permits multiple reimbursement requests to be submitted on a single HIMP-1 form.

3. Costs: Costs to health insurers, including those located in rural areas, include modest increases to the fees for participation in the program. Since 1993 the only increase in any of the fees associated to the HIMP program was an increase in the fees for desk arbitrations in 2008. On December 24, 2008, the fee for desk arbitrations was increased from $75 (with $15 payable to the arbitrator) to $150 (with $40 payable to the arbitrator). The increase in fees appear to be justified based on the work associated at the Workers’ Compensation Board and at the American Arbitration Association. In addition, the costs for manual searches and arbitration may be recoverable from the workers’ compensation carrier if the health insurer prevails at the arbitration. The proposed rule also includes a penalty for filing a frivolous claim.

4. Minimizing adverse impact: The proposed rule implements the requirements set forth in WCL section 13(d) and (h). The proposed rule essentially coordinates benefits between two insurance carriers, the health insurer and the workers’ compensation carrier. In this new version, the rule creates an opportunity to request reconsideration in arbitration and permits recovery of fees paid for manual searches, to more accurately allocate costs on the appropriate party. In addition, penalties will be imposed when a health insurer files a frivolous reimbursement request, and the Board will collect data regarding the number of requests made each year, the amount recovered and the times when the health insurer prevailed in an effort to determine how well the system is functioning.

5. Rural area participation: The Chair sought the participation of the regulated parties from across the state, including rural areas, in the drafting of this rule by providing early drafts to and meeting with the AFL-CIO, the New York State Business Council, the State Insurance Fund, the City of New York, health insurers and their representatives including, MRM, HCSG, and Wellpoint, as well as the American Arbitration Association.

Job Impact Statement

The purpose for the rescission and adoption of new Subparts 325-5 and 325-6 is to clarify and update the process for a health insurer to request reimbursement from a workers’ compensation carrier and resolve disputes between the health insurer and the workers’ compensation carrier. The nature of the reimbursement will not be impacted by the regulation and thus the business practices of health insurers and workers’ compensation carriers will remain the same. It is anticipated that adoption of new Subparts-325-5 and 325-6 will have no impact on jobs in New York State. It is apparent from the nature and purpose of the rule that it will not have a substantial adverse impact on jobs or employment, and therefore a Job Impact Statement is not required.