This bill has been amended

Bill S5068-2011

Prohibits approval of a health maintenance plan that does not include coverage of out of plan medical services

Requires health plans providing coverage for out-of-network care to provide certain information to insureds, subscribers and enrollees.

Details

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  • Jan 4, 2012: REFERRED TO HEALTH
  • May 3, 2011: REFERRED TO HEALTH

Memo

BILL NUMBER:S5068

TITLE OF BILL: An act to amend the public health law and the insurance law, in relation to prohibiting the approval of a health care plan which does not provide coverage of out of network care

PURPOSE: OR GENERAL IDEA OF THE BILL: To provide greater transparency and standardized disclosure of health insurance companies' out of network payment policies so that patients and employers can better understand the extent of their coverage.

SUMMARY OF SPECIFIC PROVISIONS: Section 1 of the bill amends Section 4406 of the Public Health Law to empower the Commissioner of Health and Superintendent of Insurance to disapprove issuance of a health insurance policy offering coverage for out of network care that will not provide significant coverage of the usual costs of receiving care out of the plan's network. This section would also require a health insurance company to disclose to its subscribers and enrollees a description of its methodology for reimbursing health care treatment by physicians not participating in the plan's network, which shall be expressed as a percentage of the usual cost of care provided by physicians not participating in the health plan's network of providers (as determined by a nonprofit benchmarking database known as FAIR Health). Moreover, this section would also require a health insurance company to disclose to their enrollees upon request the anticipated out of pocket costs for specific health care services received on an out of network basis, which shall be based upon the difference between the estimated actual cost of the service (as determined by FAIR Health) and the health insurance company's out of network reimbursement methodology.

Section 2 of the bill makes corresponding changes to Section 4322 of the Insurance Law.

Section 3 of the bill provides for an August 1, 2011 effective date,

JUSTIFICATION: Some consumers and employers choose to have health insurance policies that permit them to receive care from a non-participating physician because it permits them to see the health care provider of their choice. However, this system has been fraught with problems. As a condition of settlements with the Attorney General in 2009, several health insurance companies agreed to discontinue the use of the flawed database for determining payments when patients receive care outside of a plan's network of physicians. Money was contributed toward creating a new database to be maintained by a new unaffiliated non-profit organization, called FAIR Health, Inc. The purpose of the database is to assure that patients, employers and health insurers have accurate information concerning the true cost of out-of-network medical services. The new database should be operational for reporting medical charge data by the middle of 2011. This development was applauded by the consumer and provider community.

In the meantime, however, a number of insurers have changed their methodology for covering out-of-network care to methodologies that

appear at first blush to cover costs adequately, but, in fact, often result in severely inadequate coverage for patients. It is the intention of this legislation to ensure that the new database developed as a result of the Attorney General's 2009 investigation and report is utilized as intended.

This legislation empowers the Commissioner of Health and Superintendent of Insurance to disapprove issuance of a health insurance policy offering coverage for out of network care that will not provide significant coverage of the usual costs of receiving care out of the plan's network. It would also better assure that health insurance companies are informing their enrollees how their coverage policies for out of network care compare to the actual cost of services. Finally, It would better protect employers and patients from purchasing policies that purport to, but in fact fail to, provide adequate coverage for out of network care.

LEGISLATIVE HISTORY: New Bill

FISCAL IMPLICATIONS: None to State.

EFFECTIVE DATE: This act shall take effect August 1, 2011.


Text

STATE OF NEW YORK ________________________________________________________________________ 5068 2011-2012 Regular Sessions IN SENATE May 3, 2011 ___________
Introduced by Sen. HANNON -- read twice and ordered printed, and when printed to be committed to the Committee on Health AN ACT to amend the public health law and the insurance law, in relation to prohibiting the approval of a health care plan which does not provide coverage of out of network care THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Paragraph (a) of subdivision 2 of section 4406 of the public health law, as amended by chapter 504 of the laws of 1995, is amended and two new paragraphs (j) and (k) are added to read as follows: (a) Upon approval of the commissioner, an organization may implement an out-of-plan benefits system that allows enrollees to use providers not participating in the plan pursuant to a contract, employment or other association. The commissioner, in consultation with the super- intendent, shall not approve an organization to implement an out-of-plan benefits system unless the organization demonstrates that: (i) the requirements of this article and any regulations promulgated thereunder have been met and will continue to be met; (ii) it can establish and maintain a contingent reserve fund of not less than two percent of the entire net premium income for the calendar year of the organization in addition to any other contingent reserve fund required by the commissioner in regulations subject to the approval of the superintendent; [and] (iii) it has established mechanisms to ensure and monitor compliance with the provisions of paragraph (b) of this subdivision[.]; (IV) THE OUT OF PLAN BENEFITS SYSTEM WILL PROVIDE SIGNIFICANT COVERAGE OF THE USUAL COSTS OF OUT-OF-PLAN HEALTH SERVICES. (J) AN ORGANIZATION OFFERING AN OUT-OF-PLAN BENEFITS SYSTEM PURSUANT TO THIS SUBDIVISION SHALL PROVIDE TO THEIR SUBSCRIBERS AND ENROLLEES A DESCRIPTION OF ITS METHODOLOGY FOR REIMBURSING OUT-OF-PLAN BENEFITS, WHICH SHALL BE EXPRESSED AS A PERCENTAGE OF THE USUAL COST OF
OUT-OF-PLAN HEALTH CARE SERVICES. SUCH ORGANIZATION SHALL INCLUDE WITHIN THIS DESCRIPTION EXAMPLES OF ANTICIPATED OUT OF POCKET COSTS FOR FREQUENTLY BILLED OUT-OF-PLAN HEALTH CARE SERVICES PROVIDED BY VARIOUS PHYSICIAN SPECIALISTS. UPON REQUEST OF AN ENROLLEE, SUCH ORGANIZATION SHALL PROVIDE INFORMATION TO SUCH ENROLLEE IN WRITING OR THROUGH AN INTERNET WEBSITE THAT REASONABLY PERMITS THE ENROLLEE TO DETERMINE THE ANTICIPATED OUT OF POCKET COSTS FOR A SPECIFIC OUT-OF-PLAN HEALTH CARE SERVICE BASED UPON THE DIFFERENCE BETWEEN THE ORGANIZATION'S METHODOLOGY FOR REIMBURSING OUT-OF-PLAN HEALTH CARE SERVICES AND THE USUAL COST OF OUT-OF-PLAN HEALTH CARE SERVICES. (K) FOR THE PURPOSES OF THIS SUBDIVISION, "USUAL COST OF OUT-OF-PLAN HEALTH CARE SERVICES" SHALL MEAN THE EIGHTIETH PERCENTILE OF THE ACTUAL CHARGES FOR A HEALTH CARE SERVICE PROVIDED IN THE SAME COUNTY AND PERFORMED BY AN OUT-OF-PLAN PHYSICIAN IN THE SAME OR SIMILAR SPECIALTY, AS REPORTED IN A BENCHMARKING DATABASE MAINTAINED BY A NONPROFIT ORGAN- IZATION WITHOUT AFFILIATION WITH AN ORGANIZATION CERTIFIED UNDER THIS ARTICLE OR AN INSURER LICENSED UNDER THE INSURANCE LAW, CREATED AS A RESULT OF SETTLEMENTS ENTERED INTO DURING THE YEAR TWO THOUSAND NINE BETWEEN THE DEPARTMENT OF LAW AND INDIVIDUAL HEALTH INSURANCE ORGANIZA- TIONS. S 2. Section 4322 of the insurance law is amended by adding a new subsection (g-1) to read as follows: (G-1) A HEALTH MAINTENANCE ORGANIZATION ISSUED A CERTIFICATE PURSUANT TO ARTICLE FORTY-FOUR OF THE PUBLIC HEALTH LAW OR A CORPORATION SUBJECT TO THE PROVISIONS OF THIS ARTICLE OFFERING AN OUT-OF-PLAN BENEFITS SYSTEM PURSUANT TO THIS SECTION SHALL PROVIDE TO AN ENROLLEE OF A CONTRACT A DESCRIPTION OF ITS METHODOLOGY FOR REIMBURSING OUT-OF-PLAN BENEFITS, WHICH SHALL BE EXPRESSED AS A PERCENTAGE OF THE USUAL COST OF OUT-OF-PLAN HEALTH CARE SERVICES. SUCH ORGANIZATION OR CORPORATION SHALL INCLUDE WITHIN THIS DESCRIPTION EXAMPLES OF ANTICIPATED OUT OF POCKET COSTS FOR FREQUENTLY BILLED OUT-OF-PLAN HEALTH CARE SERVICES PROVIDED BY VARIOUS PHYSICIAN SPECIALISTS. UPON REQUEST OF AN ENROLLEE OF SUCH A CONTRACT, SUCH ORGANIZATION OR CORPORATION SHALL PROVIDE INFORMATION TO SUCH PURCHASER IN WRITING OR THROUGH AN INTERNET WEBSITE THAT REASONABLY PERMITS THE ENROLLEE TO DETERMINE THE ANTICIPATED OUT OF POCKET COSTS FOR A SPECIFIC OUT-OF-PLAN HEALTH CARE SERVICE BASED UPON THE DIFFERENCE BETWEEN THE ORGANIZATION'S METHODOLOGY FOR REIMBURSING OUT-OF-PLAN HEALTH CARE SERVICES AND THE USUAL COST OF OUT-OF-PLAN HEALTH CARE SERVICES. FOR THE PURPOSES OF THIS SUBDIVISION, "USUAL COST OF OUT-OF-PLAN HEALTH CARE SERVICES" SHALL MEAN THE EIGHTIETH PERCENTILE OF THE ACTUAL CHARGES FOR A HEALTH CARE SERVICE PROVIDED IN THE SAME COUNTY AND PERFORMED BY AN OUT-OF-PLAN PHYSICIAN IN THE SAME OR SIMILAR SPECIALITY, AS REPORTED IN A BENCHMARKING DATABASE MAINTAINED BY A NONPROFIT ORGANIZATION WITHOUT AFFILIATION WITH AN ORGANIZATION CERTI- FIED UNDER ARTICLE FORTY-FOUR OF THE PUBLIC HEALTH LAW OR CORPORATION LICENSED PURSUANT TO THIS ARTICLE, CREATED AS A RESULT OF SETTLEMENTS ENTERED INTO DURING THE YEAR TWO THOUSAND NINE BETWEEN THE DEPARTMENT OF LAW AND INDIVIDUAL HEALTH INSURANCE ORGANIZATIONS. S 3. This act shall take effect August 1, 2011.

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