PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following action:
Action taken:
Amendment of Part 69 of Title 10 NYCRR.
Statutory authority:
Public Health Law, section 2999-j
Finding of necessity for emergency rule:
Preservation of general welfare.
Specific reasons underlying the finding of necessity:
These regulations are being promulgated on an emergency basis because of the need for the Fund to be operational as of October 1, 2011. Authority for emergency promulgation was specifically provided in section 111 of Article VII of the New York State 2011-2012 Budget.
Subject:
NYS Medical Indemnity Fund.
Purpose:
To provide the structure within which the NYS Medical Indemnity Fund will operate.
Substance of emergency rule:
As required 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 regulations to provide the structure within which the New York State Medical Indemnity Fund (“Fund”) will operate. Included are (a) critical definitions such as “birth-related neurological injury” and “qualifying health care costs” for purposes of coverage, (b) what the application process for enrollment in the Fund will be, (c) what qualifying health care costs will require prior approval, (d) what the claims submission process will be, (e) what the review process will be for claims denials, (f) what the review process will be for prior approval denials, and (g) how and when the required actuarial calculations will be done.
The application process itself has been developed to be as streamlined as possible. Submission of (a) a completed application form, (b) a signed release form, (c) a certified copy of a judgment or court-ordered settlement that finds or deems the plaintiff to have sustained a birth-related neurological injury, (d) documentation regarding the specific nature and degree of the applicant’s neurological injury or injuries at present, (e) copies of medical records that substantiate the allegation that the applicant sustained a “birth-related neurological injury,” and (f) documentation of any other health insurance the applicant may have are required for actual enrollment in the Fund.
The parent or other authorized person must submit the name, address, and phone number of all providers providing care to the applicant at the time of enrollment for purposes of both claims processing and case management. To the extent that documents prepared for litigation and/or other health related purposes contain the required background information, such documentation may be submitted to meet these requirements as well, provided that this documentation still accurately describes the applicant’s condition and treatment being provided.
Those expenses that will or can be covered as qualifying health care costs are defined very broadly. Prior approval is required only for very costly items, items that involve major construction, and/or out of the ordinary expenses. Such prior approval requirements are similar to the prior approval requirements of various Medicaid waiver programs and to commercial insurance prior approval requirements for certain items and/or services.
Reviews of denials of claims and denials of requests for prior approval will provide enrollees with full due process and prompt decisions. Enrollees are entitled to a conference with the Fund Administrator or his or her designee and a review, which will involve either a hearing before or a document review by a Department of Health hearing officer. In all reviews, the hearing officer will make a recommendation regarding the issue and the Commissioner or his designee will make the final determination. An expedited review procedure has also been developed for emergency situations.
This notice is intended
to serve only as a notice of emergency adoption. This agency intends to adopt the provisions of this emergency rule as a permanent rule, having previously submitted to the Department of State a notice of proposed rule making, I.D. No. HLT-12-14-00014-P, Issue of March 26, 2014. The emergency rule will expire July 21, 2014.
Text of 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.state.ny.us
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. And 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 specific requirements for the actuarial calculations to be made by DFS and any ensuing suspension of enrollment in the Fund; (2) a clear concept of the qualifying health care costs for which the Fund will pay and their applicable rates of payment; (3) a step-by-step prior approval process required only for certain costly services, including environmental modifications, vehicle modifications, assistive technology, private duty nursing, transportation for medical care and services, treatment with a specialty drug, and experimental treatment; (4) a claims submission process that allows timely payment to providers; and (5) a fair review process if an enrollee’s claims or prior authorization requests are denied, including document based reviews and hearings conducted by DOH.
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 of 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) a qualified applicant, person authorized to act on behalf of a qualified applicant, or certain defendants to submit an application and supporting documentation for a qualified applicant’s enrollment into the Fund; (2) an enrollee to submit electronic or manual claims for reimbursement of qualified health care services, documentation to support any prior approval request and payment thereof, a review request form for denial of a claim or prior approval request, and notice of a change in address; (3) DOH to issue a notice of hearing, if applicable; and (4) DFS to issue a notice of any suspension or reinstatement of enrollment into the Fund.
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, such as the Early Intervention Program or as part of an Individualized Education Plan unless the parent or guardian can demonstrate that he or she has made a reasonable effort to obtain such service, equipment or item for the qualified plaintiff through the applicable program.
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 divorced parents, the regulations used to allow environmental modifications only to the primary residence of a custodial parent. The agencies considered the limitation placed on a child’s ability to spend time at the home of the noncustodial parent and changed the Express Terms to allow environmental modifications to the primary residence of a noncustodial parent.
(2) When the Administrator received a request for approval of environmental modifications to a home that had yet to be built, the regulations had no process to allow for such approval. The agencies considered the benefit to families in having adaptations built in for their child making the home move-in ready on completion, in addition to the cost effectiveness of environmental modifications made during construction, as opposed to after construction, and changed the Express Terms to provide an approval process for these types of requests.
(3) The prior approval process for assistive technology used to require 3 acceptable bids for every item requested. The agencies considered this process to be cumbersome for less costly items, especially when prices are readily available in catalogues or online, and changed the Express Terms to allow for the submission of 3 prices in lieu of 3 bids for items costing less than $2500.
Federal Standards:
There are no minimum Federal standards regarding this subject.
Compliance Schedule:
The Fund was statutorily required to be operational by October 1, 2011.
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.
