LBD01960-01-3
S. 1151 2
EVENT FROM WHICH THE CLAIM AROSE WAS BASED UPON AN INTENT TO DEFRAUD AN
INSURER OR SELF-INSURER. NOTHING CONTAINED IN THIS PARAGRAPH SHALL
PRECLUDE AN INSURER FROM CONTESTING THE EXISTENCE OF APPLICABLE INSUR-
ANCE COVERAGE FOR THE LOSS CLAIMED.
(3) AN INSURER MAY DENY A CLAIM ON THE BASIS OF LACK OF MEDICAL NECES-
SITY NOT LATER THAN SIXTY DAYS AFTER THE DATE UPON WHICH THE CLAIM
BECAME OVERDUE. ANY DENIAL OF A CLAIM WHICH IS BASED UPON A LACK OF
MEDICAL NECESSITY SHALL BE BASED UPON REVIEW BY A LICENSED PROVIDER WHO
TYPICALLY DIAGNOSES AND PROVIDES TREATMENT FOR THE CONDITION UNDER
REVIEW, OR TYPICALLY PROVIDES THE HEALTH CARE SERVICE OR TREATMENT UNDER
REVIEW. COPIES OF ALL REPORTS PREPARED BY A HEALTH CARE PROVIDER WHO
EXAMINES A CLAIMANT AT THE REQUEST OF AN INSURER OR REVIEWS A CLAIM FOR
MEDICAL BENEFITS AT THE REQUEST OF AN INSURER SHALL BE PROVIDED TO THE
CLAIMANT, THE CLAIMANT'S ATTORNEY AND THE CLAIMANT'S TREATING HEALTH
CARE PROVIDER WITHIN THIRTY BUSINESS DAYS OF SUCH EXAMINATION OR REVIEW.
(b) [Every insurer shall provide a] (1) A claimant [with] SHALL HAVE
the option of submitting any dispute involving the insurer's liability
to pay first party benefits, or additional first party benefits, the
amount thereof or any other matter which may arise pursuant to
subsection (a) of this section to arbitration pursuant to simplified
procedures to be promulgated or approved by the superintendent. Such
simplified procedures shall include an expedited eligibility hearing
option, when required, to designate the insurer for first party benefits
pursuant to subsection [(d)] (F) of this section. The expedited eligi-
bility hearing option shall be a forum for eligibility disputes only,
and shall not include the submission of any particular bill, payment or
claim for any specific benefit for adjudication, nor shall it consider
any other defense to payment.
[(c)] (2) THE COMMENCEMENT OF A COURT PROCEEDING OR THE SUBMISSION OF
A DISPUTE TO ARBITRATION SHALL NOT PRECLUDE A CLAIMANT FROM ELECTING TO
SUBMIT OTHER DISPUTES ARISING FROM THE SAME INSTANCE OF USE OR OPERATION
OF A MOTOR VEHICLE TO THE ALTERNATE FORUM. HOWEVER, WITH THE EXCEPTION
OF A PROCEEDING BROUGHT PURSUANT TO ARTICLE SEVENTY-FIVE OF THE CIVIL
PRACTICE LAW AND RULES, A CLAIMANT MAY NOT SUBMIT A DISPUTE REGARDING
THE SAME DENIAL TO MULTIPLE FORUMS.
(3) ARBITRATORS ARE REQUIRED TO FOLLOW AND APPLY SUBSTANTIVE LAW. An
award by an arbitrator shall be binding except where vacated or modified
by a master arbitrator in accordance with simplified procedures to be
promulgated or approved by the superintendent, WHICH SHALL OFFER THE
PARTIES THE OPPORTUNITY TO SUBMIT WRITTEN BRIEFS. The grounds for vacat-
ing or modifying an arbitrator's award by a master arbitrator shall not
be limited to those grounds for review set forth in article seventy-five
of the civil practice law and rules AND SHALL INCLUDE FACTUAL, LEGAL AND
PROCEDURAL ERRORS. The award of a master arbitrator shall be binding
except for the grounds for review set forth in article seventy-five of
the civil practice law and rules, and provided further that where the
amount of such master arbitrator's award is five thousand dollars or
greater, exclusive of interest and attorney's fees, the insurer or the
claimant may institute a court action to adjudicate the dispute de novo.
[(d)] (C) WITH RESPECT TO AN ACTION FOR SERIOUS PERSONAL INJURY PURSU-
ANT TO SECTION FIVE THOUSAND ONE HUNDRED FOUR OF THIS ARTICLE, THE AWARD
OF AN ARBITRATOR OR MASTER ARBITRATOR RENDERED IN A PROCEEDING BROUGHT
PURSUANT TO THIS ARTICLE, OTHER THAN AN AWARD PERTAINING TO THE ISSUE OF
THE EXISTENCE OF INSURANCE COVERAGE, SHALL NOT CONSTITUTE COLLATERAL
ESTOPPEL OF THE ISSUES ARBITRATED.
S. 1151 3
(D) WITH RESPECT TO AN ARBITRATION OR AN ACTION COMMENCED IN A COURT
OF COMPETENT JURISDICTION INITIATED TO OBTAIN PAYMENT OF AN OVERDUE
CLAIM FOR THE PAYMENT OF MEDICAL BENEFITS PRIMA FACIE ENTITLEMENT TO
BENEFITS SHALL BE ESTABLISHED BY FILING A VERIFICATION BY THE CLAIMANT
WITH THE ARBITRATION DEMAND OR COMPLAINT, SETTING FORTH THAT:
(1) THE CLAIMANT WAS LICENSED TO RENDER THE SERVICES OR THE ITEMS
PROVIDED AT THE TIME THEY WERE PROVIDED;
(2) THE SERVICES WERE RENDERED OR ITEMS SUPPLIED BY THE CLAIMANT;
(3) THE SERVICES OR ITEMS WERE MEDICALLY NECESSARY, OR, FOR SERVICES
OR SUPPLIES PROVIDED PURSUANT TO PRESCRIPTION, THAT SUCH WERE PROPERLY
SUPPORTED BY A PRESCRIPTION;
(4) THE CLAIMANT RECEIVED AN ASSIGNMENT OF BENEFITS FROM THE INJURED
PARTY OR THE GUARDIAN OR PARENT OF THE INJURED PARTY; AND
(5) THE CLAIMANT AUTHORIZED THE PARTICULAR ATTORNEY OR LAW FIRM TO
COMMENCE THE SUIT.
(E) WITH RESPECT TO AN ACTION COMMENCED IN A COURT OF COMPETENT JURIS-
DICTION TO OBTAIN BENEFITS PURSUANT TO THIS ARTICLE:
(1) A REBUTTABLE PRESUMPTION OF ADMISSIBILITY ATTACHES TO CLAIMS
FORMS, DENIAL OF CLAIMS FORMS, VERIFICATION REQUESTS AND RESPONSES THER-
ETO, WHEN SUCH ARE ACCOMPANIED BY AN AFFIDAVIT ESTABLISHING THAT SUCH
FORMS ARE BUSINESS RECORDS PURSUANT TO RULE FORTY-FIVE HUNDRED EIGHTEEN
OF THE CIVIL PRACTICE LAW AND RULES.
(2) A REBUTTABLE EVIDENTIARY PRESUMPTION SHALL ATTACH TO SUCH DOCU-
MENTS REFERENCED IN PARAGRAPH ONE OF THIS SUBSECTION THAT SUCH ARE
VALID.
(3) A REBUTTABLE EVIDENTIARY PRESUMPTION SHALL ATTACH TO SUCH DOCU-
MENTS REFERENCED IN PARAGRAPH ONE OF THIS SUBSECTION THAT SUCH WERE
MAILED TO THE ADDRESS CONTAINED THEREON, ON THE DATE CONTAINED THEREON.
(4) A REBUTTABLE EVIDENTIARY PRESUMPTION SHALL ATTACH TO PROOFS OF
PAYMENT THAT SUCH PAYMENTS WERE MADE BY THE INSURER AND RECEIVED BY THE
PLAINTIFF.
(5) IN MATTERS WHERE THE INSURER'S DENIAL IS BASED UPON AN ALLEGED
LACK OF MEDICAL NECESSITY, A REBUTTABLE PRESUMPTION OF ADMISSIBILITY
ATTACHES TO MEDICAL REPORTS OF THE CLAIMANT'S TREATING PROVIDERS.
(6) NOTHING CONTAINED IN THIS SUBSECTION SHALL PRECLUDE A PARTY FROM
OFFERING EVIDENCE AT TRIAL TO REBUT ANY PRESUMPTION IN THIS SUBSECTION,
NOR TO PRECLUDE AN INSURER FROM OFFERING EVIDENCE AT TRIAL ON ANY MERI-
TORIOUS, NON-PRECLUDED DEFENSE TO PAYMENT OF THE BENEFITS.
(7) THE DEPOSITION OF ANY PERSON MAY BE USED BY ANY PARTY WITHOUT THE
NECESSITY OF SHOWING UNAVAILABILITY OR SPECIAL CIRCUMSTANCES, SUBJECT TO
THE RIGHT OF ANY PARTY TO MOVE PURSUANT TO SECTION THIRTY-ONE HUNDRED
THREE OF THE CIVIL PRACTICE LAW AND RULES TO PREVENT ABUSE, PROVIDED
THAT THE PARTY AGAINST WHOM THE EVIDENCE IS OFFERED HAD BEEN AFFORDED AN
OPPORTUNITY TO PARTICIPATE AND QUESTION THE WITNESS AT THE DEPOSITION.
(F) Where there is reasonable belief more than one insurer would be
the source of first party benefits, the insurers may agree among them-
selves, if there is a valid basis therefor, that one of them will accept
and pay the claim initially. If there is no such agreement, then the
first insurer to whom notice of claim is given shall be responsible for
payment. Any such dispute shall be resolved in accordance with the arbi-
tration procedures established pursuant to section five thousand one
hundred five of this article and regulation as promulgated by the super-
intendent, and any insurer paying first-party benefits shall be reim-
bursed by other insurers for their proportionate share of the costs of
the claim and the allocated expenses of processing the claim, in accord-
ance with the provisions entitled "other coverage" contained in regu-
S. 1151 4
lation and the provisions entitled "other sources of first-party bene-
fits" contained in regulation. If there is no such insurer and the motor
vehicle accident occurs in this state, then an applicant who is a quali-
fied person as defined in article fifty-two of this chapter shall insti-
tute the claim against motor vehicle accident indemnification corpo-
ration.
S 3. Section 5109 of the insurance law, as added by chapter 423 of the
laws of 2005, is amended to read as follows:
S 5109. Unauthorized providers of health services. (a) The superinten-
dent[, in consultation with the commissioner of health and the commis-
sioner of education,] shall by regulation, promulgate standards and
procedures for investigating and suspending or removing the authori-
zation for providers of health services to demand or request payment for
health services as specified in paragraph one of subsection (a) of
section five thousand one hundred two of this article upon findings
reached after investigation pursuant to this section. Such regulations
shall ensure the same or greater due process provisions, [including] AND
INCLUDE notice and opportunity to be heard, as those afforded physicians
investigated under article two of the workers' compensation law and
shall include provision for notice to all providers of health services
of the provisions of this section and regulations promulgated thereunder
at least ninety days in advance of the effective date of such regu-
lations. AS USED IN THIS SECTION, "HEALTH SERVICES" MEANS SERVICES,
SUPPLIES, THERAPIES OR OTHER TREATMENT AS SPECIFIED IN SUBPARAGRAPH (I),
(II) OR (IV) OF PARAGRAPH ONE OF SUBSECTION (A) OF SECTION FIVE THOUSAND
ONE HUNDRED TWO OF THIS ARTICLE.
(b) [The commissioner of health and the commissioner of education
shall provide a list of the names of all providers of health services
who the commissioner of health and the commissioner of education shall
deem, after reasonable investigation, not authorized to demand or
request any payment for medical services in connection with any claim
under this article because such] FOLLOWING THE HEARING CONDUCTED PURSU-
ANT TO THE PROCEDURES AND REGULATION PROMULGATED PURSUANT TO THIS
SECTION, THE SUPERINTENDENT MAY PROHIBIT A PROVIDER OF HEALTH SERVICES
FROM DEMANDING OR REQUESTING PAYMENT FOR HEALTH SERVICES SUBSEQUENTLY
RENDERED UNDER THIS ARTICLE, FOR A PERIOD NOT EXCEEDING THREE YEARS, IF
THE SUPERINTENDENT DETERMINES, AFTER NOTICE AND HEARING, THAT THE
provider of health services:
(1) has ADMITTED TO, OR been FOUND guilty of, professional [or other]
misconduct [or incompetency], AS DEFINED IN THE EDUCATION LAW, in
connection with [medical] HEALTH services rendered under this article;
or
(2) has exceeded the limits of his or her professional competence in
rendering medical care under this article or has knowingly made a false
statement or representation as to a material fact in any medical report
made in connection with any claim under this article; or
(3) solicited, or has employed another to solicit for himself or
herself or for another, professional treatment, examination or care of
an injured person in connection with any claim under this article; or
(4) has refused to appear before, or to answer upon request of, the
[commissioner of health, the] superintendent[,] or any duly authorized
officer of the state, any legal question, or REFUSED to produce any
relevant information concerning [his or her] THE conduct OF THE PROVIDER
OF HEALTH SERVICES in connection with [rendering medical] HEALTH
services RENDERED under this article; or
S. 1151 5
(5) has engaged in [patterns] A PATTERN of billing for: HEALTH
services [which were not provided.] ALLEGED TO HAVE BEEN RENDERED UNDER
THIS ARTICLE, WHEN THE HEALTH SERVICES WERE NOT RENDERED, PROVIDED THAT
THIS SHALL NOT BE CONSTRUED TO APPLY TO GOOD FAITH DISPUTES REGARDING
THE APPROPRIATENESS OF A PARTICULAR CODING TO DESCRIBE A HEALTH CARE
SERVICE; OR
(6) UTILIZED UNLICENSED PERSONS TO RENDER HEALTH SERVICES UNDER THIS
ARTICLE, WHEN ONLY A PERSON LICENSED IN THIS STATE MAY RENDER THE HEALTH
SERVICES; OR
(7) UTILIZED LICENSED PERSONS TO RENDER HEALTH SERVICES UNDER THIS
ARTICLE, WHEN RENDERING THE HEALTH SERVICES IS BEYOND THE AUTHORIZED
SCOPE OF THE LICENSE OF SUCH PERSON; OR
(8) UNLAWFULLY CEDED OWNERSHIP, OPERATION OR CONTROL OF A BUSINESS
ENTITY AUTHORIZED TO PROVIDE PROFESSIONAL HEALTH SERVICES IN THIS STATE,
INCLUDING BUT NOT LIMITED TO A PROFESSIONAL SERVICE CORPORATION, PROFES-
SIONAL LIMITED LIABILITY COMPANY OR REGISTERED LIMITED LIABILITY PART-
NERSHIP, TO A PERSON NOT LICENSED TO RENDER THE HEALTH SERVICES WHICH
THE ENTITY IS LEGALLY AUTHORIZED TO PROVIDE; OR
(9) COMMITTED A FRAUDULENT INSURANCE ACT AS DEFINED IN SECTION 176.05
OF THE PENAL LAW; OR
(10) HAS BEEN CONVICTED OF A CRIME INVOLVING FRAUDULENT OR DISHONEST
PRACTICES; OR
(11) HAS, AFTER WARNING BY THE SUPERINTENDENT, ENGAGED IN A PATTERN OF
UNLAWFULLY ATTEMPTING TO COLLECT PAYMENT DIRECTLY FROM THE PATIENT OR
ELIGIBLE PERSON FOR SERVICES RENDERED UNDER THIS ARTICLE WHEN SUCH
ATTEMPTS VIOLATE THE TERMS OF AN ENFORCEABLE ASSIGNMENT OF BENEFITS.
(c) [Providers] THE SUPERINTENDENT SHALL BY REGULATION DEVELOP DUE
PROCESS PROCEDURES TO ASSURE A HEALTH PROVIDER ACCUSED UNDER THIS
SECTION HAS APPROPRIATE NOTICE, AN OPPORTUNITY FOR A FAIR HEARING AND
APPEAL PRIOR TO A DETERMINATION THAT THE HEALTH PROVIDER MAY NOT BILL
FOR SERVICES UNDER THIS SECTION. A PROVIDER of health services shall
[refrain from subsequently treating for remuneration, as a private
patient, any person seeking medical treatment] NOT DEMAND OR REQUEST
PAYMENT FOR ANY HEALTH SERVICES under this article [if such provider
pursuant to this section has been prohibited from demanding or request-
ing any payment for medical services under this article. An injured
claimant so treated or examined may raise this as] THAT ARE RENDERED
DURING THE TERM OF THE PROHIBITION ORDERED BY THE SUPERINTENDENT PURSU-
ANT TO SUBSECTION (B) OF THIS SECTION. THE PROHIBITION ORDERED BY THE
SUPERINTENDENT MAY BE a defense in any action by [such] THE provider OF
HEALTH SERVICES for payment for [treatment] HEALTH SERVICES rendered
PURSUANT TO THIS ARTICLE at any time after such provider has been
prohibited from demanding or requesting payment for [medical] SUCH
HEALTH services in connection with any claim under this article.
(d) The [commissioner of health and the commissioner of education]
SUPERINTENDENT shall maintain and regularly update a database containing
a list of providers of health services prohibited by this section from
demanding or requesting any payment [for health services connected to a
claim] RENDERED under this article and shall make [such] THE information
available to the public [by means of a website and by a toll free
number].
(e) THE SUPERINTENDENT MAY LEVY A CIVIL PENALTY NOT EXCEEDING FIFTY
THOUSAND DOLLARS ON ANY PROVIDER OF HEALTH SERVICES THAT THE SUPERINTEN-
DENT PROHIBITS FROM DEMANDING OR REQUESTING PAYMENT FOR HEALTH SERVICES
PURSUANT TO SUBSECTION (B) OF THIS SECTION. ANY CIVIL PENALTY IMPOSED
S. 1151 6
FOR A FRAUDULENT INSURANCE ACT, AS DEFINED IN SECTION 176.05 OF THE
PENAL LAW, SHALL BE LEVIED PURSUANT TO ARTICLE FOUR OF THIS CHAPTER.
(F) Nothing in this section shall be construed as limiting in any
respect the powers and duties of the commissioner of health, commission-
er of education or the superintendent to investigate instances of
misconduct by a [health care] provider [and, after a hearing and upon
written notice to the provider, to temporarily prohibit a provider of
health services under such investigation from demanding or requesting
any payment for medical services under this article for up to ninety
days from the date of such notice] OF HEALTH SERVICES AND TAKE APPROPRI-
ATE ACTION PURSUANT TO ANY OTHER PROVISION OF LAW. A DETERMINATION OF
THE SUPERINTENDENT PURSUANT TO SUBSECTION (B) OF THIS SECTION SHALL NOT
BE BINDING UPON THE COMMISSIONER OF HEALTH OR THE COMMISSIONER OF EDUCA-
TION IN A PROFESSIONAL DISCIPLINE PROCEEDING RELATING TO THE SAME
CONDUCT.
S 4. Subsection (d) of section 5102 of the insurance law, as amended
by chapter 955 of the laws of 1984, is amended to read as follows:
(d) "Serious injury" means a personal injury which results in death;
dismemberment; significant disfigurement; a fracture; loss of a fetus; A
COMPLETE TEAR OR RUPTURE OF A NERVE, TENDON, LIGAMENT, CARTILAGE OR
MUSCLE; A TEAR, RUPTURE OR IMPINGEMENT OF A NERVE, TENDON, LIGAMENT,
CARTILAGE OR MUSCLE WHICH RESULTS IN A SIGNIFICANT IMPAIRMENT OF A BODY
ORGAN, MEMBER, FUNCTION OR SYSTEM; permanent loss of use of a body
organ, member, function or system; permanent consequential limitation of
use of a body organ or member; significant limitation of use of a body
function or system; or a medically determined injury or impairment of a
non-permanent nature which prevents the injured person from performing
substantially all of the material acts which constitute such person's
usual and customary daily activities for not less than ninety days
during the one hundred eighty days immediately following the occurrence
of the injury or impairment.
S 5. Subsection (j) of section 3420 of the insurance law is amended by
adding a new paragraph 4 to read as follows:
(4) THE TERM "COVERED PERSON" AS USED IN THIS ARTICLE SHALL MEAN ANY
PEDESTRIAN INJURED THROUGH THE USE OR OPERATION OF, OR ANY OWNER, OPERA-
TOR OR OCCUPANT OF, A MOTOR VEHICLE WHICH HAS IN EFFECT THE FINANCIAL
SECURITY REQUIRED BY ARTICLE SIX OR EIGHT OF THE VEHICLE AND TRAFFIC LAW
OR WHICH IS REFERRED TO IN SUBDIVISION TWO OF SECTION THREE HUNDRED
TWENTY-ONE OF SUCH LAW; OR ANY OTHER PERSON ENTITLED TO FIRST PARTY
BENEFITS. FOR THE PURPOSES OF THIS ARTICLE, "COVERED PERSON" SHALL ALSO
INCLUDE ANY PERSON INJURED AS THE RESULT OF A STAGED, PLANNED OR INTEN-
TIONAL ACCIDENT, PROVIDED THAT SUCH PERSON IS NOT A PERPETRATOR OF OR A
KNOWING PARTICIPANT IN THE STAGING OR PLANNING OF THE ACCIDENT.
S 6. Section 5202 of the insurance law is amended by adding a new
subsection (m) to read as follows:
(M) "COVERED PERSON" MEANS ANY PEDESTRIAN INJURED THROUGH THE USE OR
OPERATION OF, OR ANY OWNER, OPERATOR OR OCCUPANT OF, A MOTOR VEHICLE
WHICH HAS IN EFFECT THE FINANCIAL SECURITY REQUIRED BY ARTICLE SIX OR
EIGHT OF THE VEHICLE AND TRAFFIC LAW OR WHICH IS REFERRED TO IN SUBDIVI-
SION TWO OF SECTION THREE HUNDRED TWENTY-ONE OF SUCH LAW; OR ANY OTHER
PERSON ENTITLED TO FIRST PARTY BENEFITS. FOR THE PURPOSES OF THIS ARTI-
CLE, "COVERED PERSON" SHALL ALSO INCLUDE ANY PERSON INJURED AS THE
RESULT OF A STAGED, PLANNED OR INTENTIONAL ACCIDENT, PROVIDED THAT SUCH
PERSON IS NOT A PERPETRATOR OF OR A KNOWING PARTICIPANT IN THE STAGING
OR PLANNING OF THE ACCIDENT.
S 7. This act shall take effect immediately; provided that:
S. 1151 7
(a) section two of this act shall apply to benefits initiated on or
after the one hundred eightieth day after this act shall have become a
law; and
(b) sections three, five and six of this act shall take effect on the
one hundred eightieth day after it shall have become a law provided that
the superintendent of financial services shall immediately promulgate
rules and regulations pursuant to section 5109 of the insurance law as
amended by section three of this act and sections five and six of this
act shall apply to all new policies and policies that are renewed or
modified after such one hundred eightieth day.