Relates to coverage for certain benefits under comprehensive motor vehicle insurance; prohibits assignment of benefits to durable medical equipment providers unless approved.
TITLE OF BILL: An act to amend the insurance law, in relation to coverage for certain benefits under comprehensive motor vehicle insurance
PURPOSE: The purpose of this legislation is to eliminate the assignment of benefits for durable medical equipment in the no-fault system
SUMMARY OF PROVISIONS: Section 1 adds a new subsection (n) to section 5102 of the insurance law to define "health service provider."
Section 2 adds a new section 5110 to the insurance law to prohibit the assignment of benefits for durable medical equipment to a health service provider unless the health service provider has been approved by the National Supplier Clearinghouse as an authorized Medicare supplier of durable medical equipment, prosthetics, orthotics and supplies Durable equipment includes, but is not limited to, durable medical equipment and supplies, medical/surgical supplies, orthopedic footwear and orthotic and prosthetic appliances.
JUSTIFICATION: In recent years an increasing portion of the no-fault fraud has been observed in the area of durable medical equipment (DME). In many instances the DME wholesaler is involved in the scam and the provider is committing fraud in conjunction with the medical supply companies Many of these DME frauds occur in the following manner.
Many items are subject to the fee schedule Items not subject to the fee schedule ate billed at a rate of 50% over cost. However, the wholesaler will often fabricate a price, and then add on the 50% profit. For example, TENS & EMS machines (which emit electrical impulses) perform nearly the same functions. Until last year TENS machines were not subject to the fee schedule, so TENS and EMS billing was relatively equal. However, last year TENS machines were put on the fee schedule. it is no coincidence that no-fault fraudsters are reducing TENS billings and EMS billings have dramatically increased so that these fraudsters can fabricate a price and then add in the 50% profit on top.
As is readily seen by these cases, this area of no-fault fraud is rampant and growing at a tremendous rate producing the fastest and most cash profit of any fraud. Since Jan 1, 2009, there have been 739 new DME providers registered in NYS. There were 340 new facilities registered in Brooklyn alone but only 10 in Buffalo In one especially egregious case. one patient's DME billing included 16 different items totaling otter $6,000 including a luxury turbo bath spa, an infrared heat wand, a wand massager, two different post-op knee braces. a back support seat, a TENS belt and others The patient reports that they never used any of the items which were billed for.
This legislation is not unique in prohibiting assignment of benefits for a lawful no-fault expense Assignment of benefits for transportation expenses was originally allowed but the no-fault system quickly saw an
explosive rise in those expenses. 1 he Department of Financial Services amended the no-fault regulations to prohibit assignment of benefits for transportation and the expenses fell very quickly Prohibiting assignment of benefits to health providers for DME should see the same outcome while still allowing the no-fault claimant to directly receive payment for their legitimate DME needs.
LEGISLATIVE HISTORY: S.5064-A of 2011-12
FISCAL IMPLICATIONS: None to State.
EFFECTIVE DATE: Immediately
STATE OF NEW YORK ________________________________________________________________________ 3540 2013-2014 Regular Sessions IN SENATE February 5, 2013 ___________Introduced by Sen. SEWARD -- read twice and ordered printed, and when printed to be committed to the Committee on Insurance AN ACT to amend the insurance law, in relation to coverage for certain benefits under comprehensive motor vehicle insurance THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Section 5102 of the insurance law is amended by adding a new subsection (n) to read as follows: (N) "HEALTH SERVICE PROVIDER" MEANS ANY MEDICAL PROVIDER OR DURABLE MEDICAL EQUIPMENT SUPPLIER THAT SUBMITS A BILL FOR PAYMENT UNDER BENE- FITS DEFINED AND PROVIDED BY THIS SECTION FOR ANY OF THE FOLLOWING: (1) MEDICAL, HOSPITAL (INCLUDING SERVICES RENDERED IN COMPLIANCE WITH ARTICLE FORTY-ONE OF THE PUBLIC HEALTH LAW, WHETHER OR NOT SUCH SERVICES ARE RENDERED DIRECTLY BY A HOSPITAL), SURGICAL, NURSING, DENTAL, AMBU- LANCE, X-RAY, PRESCRIPTION DRUG AND PROSTHETIC SERVICES OR EQUIPMENT; (2) PSYCHIATRIC, PHYSICAL THERAPY (PROVIDED THAT TREATMENT IS RENDERED PURSUANT TO A REFERRAL) AND OCCUPATIONAL THERAPY AND REHABILITATION; (3) ANY NONMEDICAL REMEDIAL CARE AND TREATMENT RENDERED IN ACCORDANCE WITH A RELIGIOUS METHOD OF HEALING RECOGNIZED BY THE LAWS OF THIS STATE; AND (4) ANY OTHER PROFESSIONAL HEALTH SERVICES. S 2. The insurance law is amended by adding a new section 5110 to read as follows: S 5110. CHARGES FOR DURABLE MEDICAL EQUIPMENT. (A) A COVERED PERSON SHALL NOT ASSIGN CLAIMS FOR MEDICAL EXPENSES UNDER THIS ARTICLE TO A HEALTH SERVICE PROVIDER FOR DURABLE MEDICAL EQUIPMENT UNLESS THE HEALTH SERVICE PROVIDER HAS BEEN APPROVED BY THE NATIONAL SUPPLIER CLEARING- HOUSE AS AN AUTHORIZED MEDICARE SUPPLIER OF DURABLE MEDICAL EQUIPMENT, PROSTHETICS, ORTHOTICS AND SUPPLIES. FOR PURPOSES OF THIS SECTION, DURABLE MEDICAL EQUIPMENT INCLUDES, BUT IS NOT LIMITED TO, DURABLEEXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD08138-01-3 S. 3540 2
MEDICAL EQUIPMENT AND SUPPLIES, MEDICAL/SURGICAL SUPPLIES, ORTHOPEDIC FOOTWEAR AND ORTHOTIC AND PROSTHETIC APPLIANCES. (B) NO HEALTH SERVICE PROVIDER SHALL BE ELIGIBLE TO DEMAND OR REQUEST PAYMENT FROM AN INSURER FOR DURABLE MEDICAL EQUIPMENT UNLESS THE MAKE AND MODEL NUMBER OF THE EQUIPMENT IS SET FORTH ON THE INVOICE FOR THE EQUIPMENT. S 3. This act shall take effect immediately.