Bill S6133-2013

Relates to unauthorized providers of health services

Relates to unauthorized providers of health services.

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  • Jan 8, 2014: REFERRED TO INSURANCE

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BILL NUMBER:S6133

TITLE OF BILL: An act to amend the insurance law, in relation to unauthorized providers of health services

PURPOSE: This bill addresses certain abuses of the no-fault insurance system by permitting the Superintendent of insurance (Superintendent) to prohibit a provider of health services from demanding or requesting payment for health services rendered under Article 51 of the Insurance Law for a period not exceeding three years if the Superintendent determines that the provider has engaged in certain activities.

SUMMARY OF PROVISIONS:

Section 1 of the bill amends the lead sentence of Insurance Law § 5102 to specify that the definitions set forth in that section apply only to Article 51 and not the entire Insurance Law.

Section 1 also adds new Insurance Law § 5102(a) to specify that the term "provider of health services" means "a person or entity who renders health services."

Section 2 amends Insurance Law §§ 5109(a) to define "health services," for purposes of Insurance Law § 5109, as services, supplies, therapies or other treatments as specified in Insurance Law § 5102(a)(1)(i), (ii) or (iv).

Section 2 also amends Insurance Law § 5109(b) to permit the Superintendent to prohibit a provider of health services from demanding or requesting payment for health services rendered under Article 51 of the Insurance Law, 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 misconduct, as defined in the Education Law, in connection with health services rendered under Article 51; (2) solicited, or employed another person to solicit for the provider or another person or entity, professional treatment, examination or care of a person in connection with any claim under Article 51; (3) refused to appear before, or answer any question upon request of, the Superintendent or any duly authorized officer of New York State, or refused to produce any relevant information concerning the provider's conduct in connection with health services rendered under Article 51; (4) engaged in a pattern of billing for health services alleged to have been rendered under Article 51 which were not rendered or engaged in a pattern of billing for unnecessary health services; (5) utilized unlicensed persons to render health services under Article 51, when only a person licensed in New York may render the health services; (6) utilized licensed persons to render health services, when rendering the health services is beyond the authorized scope of the person's license; (7) ceded ownership, operation or control of a business entity that provides health services, such as a professional service corporation, a professional limited liability company or a registered limited liability partnership, to a person not licensed to render the health services for which the entity is legally authorized to provide, unless otherwise permitted by law; (8) committed a fraudulent insurance act as defined in Penal Law § 176.05; (9) has been convicted of a crime involving fraudulent or dishonest practices: or (10)

violated any provision of Article 51 or regulations promulgated thereunder.

Section 2 further amends Insurance Law § 5109(c) to state that a provider of health services shall not demand or request payment for any health services under Article 51 that are rendered during the term of the prohibition ordered by the Superintendent pursuant to Insurance Law § 5109(b). This provision prevents a provider of health services from circumventing the prohibition by directly billing a patient or the patient's health insurer for health services otherwise eligible.for compensation by a no-fault insurer.

Section 2 also amends Insurance Law § 5109(d) to require the Superintendent to maintain a database containing a list of providers of health services that the Superintendent has prohibited from demanding or requesting payment for health services rendered under Article 51, and to make this information available to the public.

Section 2 further reletters Insurance Law § 5109(e) as (t) and adds a new subsection {e) to permit the Superintendent to levy a civil penalty not exceeding $50,000 on any provider of health services that the Superintendent prohibits from demanding or requesting payment for health services pursuant to Insurance Law § 5109(b). However, any civil penalty imposed for a fraudulent insurance act must be levied pursuant to Article 4 of the Insurance Law.

Former Insurance Law § 5109(e), relettered as subsection (t), is amended to state that nothing in Insurance Law § 5109 shall be construed as limiting in any respect the powers and duties of the Commissioners of Health and Education and the Superintendent to investigate instances of misconduct by a provider of health services and take appropriate action pursuant to any other provision of law. Moreover, the bill provides that a determination rendered by the Superintendent pursuant to Insurance Law § 5109(b) does not bind the Commissioner of Health or the Commissioner of Education in a professional discipline proceeding related to the same conduct.

Section 3 of the bill provides that it would take effect immediately.

EXISTING LAW: Insurance Law § 5102 defines, for purposes of the entire Insurance Law, terms related to no-fault insurance. Insurance Law 5109 requires the Superintendent, in consultation with the Commissioners of Health and Education, to promulgate a regulation that establishes standards and procedures "for investigating and suspending or removing the authorization for providers of health services to demand or request payment for health services as specified in" Insurance Law § 5102(a)(1). Insurance Law § 5109 also requires the Commissioners of Health and Education to provide a list of the names of all providers of health services who the Commissioners deem unauthorized to demand or request any payment for medical services because the provider has engaged in certain activities, including soliciting or employing 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 Article 51, or engaging in patterns of billing for services that were not provided.

Insurance Law § 5109 also prohibits a provider of health services from subsequently treating, for remuneration, as a private patient, any person seeking medical treatment under Article 51 of the Insurance Law, and requires the Commissioners of Health and Education to maintain a database containing a list of providers of health services prohibited from demanding or requesting payment for health services.

LEGISLATIVE HISTORY:

S.3553 of 2009-2010 Referred to Insurance A.4704 of 2011-2012 Referred to Insurance

STATEMENT IN SUPPORT: Under Article 51 of the Insurance Law, known as the "Comprehensive Motor Vehicle Insurance Reparations Act" or more commonly as the "no-fault insurance law," a person who sustains an injury arising from the use or operation of a motor vehicle may receive up to $50,000 in benefits for expenses incurred as a result of that accident. An insured may purchase additional coverage, thereby raising the limits. The purpose of the no-fault system is to ensure prompt payment for necessary expenses incurred because of legitimate injuries sustained in an accident regardless of responsibility. In most instances, no-fault insurers directly reimburse providers of health services, assuming that a licensed professional rendered the treatment and that the treatment was medically necessary.

For years, certain owners and operators of professional service corporations have abused the no-fault insurance system. These persons are involved in activities that include intentionally staging accidents and billing no-fault insurers for health services that were unnecessary or never in fact rendered. This fraud costs no-fault insurers tens if not hundreds of millions of dollars, which insurers ultimately pass on to New York consumers in the form of higher automobile premiums. According to the Insurance Information Institute, New York consumers are paying $1.2 million a day because of no-fault insurance fraud. Queens County District Attorney Richard Brown, in statements made to the media concerning recent no-fault insurance related indictments, reported that no-fault insurance fraud costs the insurance industry $14 billion a year nationwide and New York consumers $1 billion a year, which results in an additional 10% per year increase in automobile premiums for each New York consumer.

In addition, of great concern to the public is the ownership, control and ,daily operation of professional service corporations or other similar business entities by individuals who are not licensed to practice medicine. Ownership of professional service corporations by unlicensed persons works as follows; unlicensed persons pay licensed physicians to use the physicians' names, signatures and licenses for the purpose of fraudulently billing no-fault insurers for services that were never rendered, are of no diagnostic value or are medically unnecessary. These physicians essentially sell their licenses, for a fee, and become "paper owners" of the professional service corporation, which in turn permits unlicensed and unqualified persons to own, operate and control a professional service corporation, although they are prohibited from having any financial interest in such a corporation pursuant to Article 15 of the Business Corporation Law. Schemes such as this, which could involve professional business entities other than professional service corporations and health "Care

professionals other than physicians, severely compromise the safety and integrity of the health care system in New York. As a result, certain professional business entities have become unjustly enriched through the ill-gotten proceeds of illegal activity, increasing the cost of insurance premiums for the driving public. More importantly, these abuses threaten the affordability of health care and the public's health, safety and welfare.

The current version of Insurance Law 5109 attempted to curb abuses in the no-fault insurance system by requiring the Department of Health and the State Education Department to investigate providers of health services who engage in certain misconduct, and suspend or remove their authorization to seek payment for medical services pursuant to standards and procedures developed by the Insurance Department. However, responsibility for implementation of section 5109 is too diffuse for the current law to be effective. Section 5109 requires the Insurance Department to essentially set forth the procedures that the Department of Health and State Education Department must follow. Accordingly, this bill consolidates within the Insurance Department responsibility for investigating such providers and prohibiting them from seeking payment.

Specifically, this bill authorizes the Superintendent to prohibit a provider of health services from demanding or requesting payment for health services rendered under Article 51 for a period not exceeding three years, if the Superintendent determines that the provider has engaged in certain activities. Under the bill, a provider may not circumvent the prohibition by billing a patient or the patient's health insurer directly for health services otherwise eligible for compensation by a no-fault insurer.

Moreover, while the Insurance Department currently interprets "provider" to include an individual and an entity, such as a professional service corporation, this bill makes explicit that the term applies to both in a new definition of "provider of health services" in Insurance Law § 5102.

Furthermore, this bill requires the Superintendent to maintain a database containing a list of providers of health services that the Superintendent has prohibited from demanding or requesting payment from no-fault insurers, and to make this information publicly available. In addition, the bill permits the Superintendent to levy a civil penalty not exceeding $50,000 on any provider of health services that the Superintendent prohibits from demanding or requesting payment for health services. Making the information publicly available and permitting the Superintendent to levy a civil penalty will deter abusive no-fault insurance practices.

Finally, the revision of Insurance Law 5109(f) makes clear that the Commissioners- of Health and Education and the Superintendent are not precluded from taking appropriate action under any other provision of law, such as bringing a disciplinary proceeding under the Education Law, merely because the Superintendent prohibits a provider of health services from demanding or requesting payment under Article 51 of the Insurance Law.

BUDGET IMPLICATIONS: This bill will have no fiscal impact to the State.

EFFECTIVE DATE: This bill takes effect immediately.


Text

STATE OF NEW YORK ________________________________________________________________________ 6133 IN SENATE (PREFILED) January 8, 2014 ___________
Introduced by Sen. O'BRIEN -- 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 unauthorized providers of health services THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. The opening paragraph of section 5102 of the insurance law is amended and a new subsection (n) is added to read as follows: In this [chapter] ARTICLE: (N) "PROVIDER OF HEALTH SERVICES" MEANS A PERSON OR ENTITY WHO RENDERS HEALTH SERVICES. S 2. 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 super- intendent, in consultation with the commissioner of health and the commissioner 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 notice and opportunity to be heard, as those afforded physicians inves- tigated 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 regulations] AS USED IN THIS SECTION, "HEALTH SERVICES" MEANS SERVICES, SUPPLIES, THERAPIES OR OTHER TREATMENTS 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]
THE SUPERINTENDENT MAY PROHIBIT A provider of health services FROM DEMANDING OR REQUESTING PAYMENT FOR HEALTH SERVICES 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)] (2) solicited, or [has] employed another PERSON to solicit for [himself or herself] THE PROVIDER OF HEALTH SERVICES or [for] another PERSON OR ENTITY, professional treatment, examination or care of [an injured] A person in connection with any claim under this article; [or (4) has] (3) refused to appear before, or [to] answer ANY QUESTION upon request of, the [commissioner of health, the] superintendent[,] or any duly authorized officer of [the] THIS 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 (5) has] (4) engaged in [patterns] A PATTERN of billing for: (A) HEALTH services [which] ALLEGED TO HAVE BEEN RENDERED UNDER THIS ARTICLE, WHEN THE HEALTH SERVICES were not [provided.] RENDERED; OR (B) UNNECESSARY HEALTH SERVICES; (5) UTILIZED UNLICENSED PERSONS TO RENDER HEALTH SERVICES UNDER THIS ARTICLE, WHEN ONLY A PERSON LICENSED IN THIS STATE MAY RENDER THE HEALTH SERVICES; (6) UTILIZED LICENSED PERSONS TO RENDER HEALTH SERVICES, WHEN RENDER- ING THE HEALTH SERVICES IS BEYOND THE AUTHORIZED SCOPE OF THE PERSON'S LICENSE; (7) CEDED OWNERSHIP, OPERATION OR CONTROL OF A BUSINESS ENTITY AUTHOR- IZED TO PROVIDE PROFESSIONAL HEALTH SERVICES IN THIS STATE, INCLUDING BUT NOT LIMITED TO A PROFESSIONAL SERVICE CORPORATION, PROFESSIONAL LIMITED LIABILITY COMPANY OR REGISTERED LIMITED LIABILITY PARTNERSHIP, TO A PERSON NOT LICENSED TO RENDER THE HEALTH SERVICES FOR WHICH THE ENTITY IS LEGALLY AUTHORIZED TO PROVIDE, EXCEPT WHERE THE UNLICENSED PERSON'S OWNERSHIP, OPERATION OR CONTROL IS OTHERWISE PERMITTED BY LAW; (8) COMMITTED A FRAUDULENT INSURANCE ACT AS DEFINED IN SECTION 176.05 OF THE PENAL LAW; (9) HAS BEEN CONVICTED OF A CRIME INVOLVING FRAUDULENT OR DISHONEST PRACTICES; OR (10) VIOLATED ANY PROVISION OF THIS ARTICLE OR REGULATIONS PROMULGATED THEREUNDER. (c) [Providers] 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 requesting 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 PURSUANT 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 rendered at any time after such provider has been prohibited from demanding or requesting payment for medical services in connection with any claim under this article] SUCH HEALTH SERVICES. (d) The [commissioner of health and the commissioner of education] SUPERINTENDENT shall maintain [and regularly update] a database contain- ing 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 infor- mation 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 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. [(e)] (F) Nothing in this section shall be construed as limiting in any respect the powers and duties of the commissioner of health, commis- sioner 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 3. This act shall take effect immediately.

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