2010 New York Code
ISC - Insurance
Article 32 - (3201 - 3239) INSURANCE CONTRACTS - LIFE, ACCIDENT AND HEALTH, ANNUITIES
3224-A - Standards for prompt, fair and equitable settlement of claims for health care and payments for health care services.

§  3224-a.  Standards  for  prompt,  fair  and equitable settlement of
  claims for health care and payments for health  care  services.  In  the
  processing  of  all  health  care  claims  submitted  under contracts or
  agreements issued or entered into pursuant to this article and  articles
  forty-two,  forty-three  and  forty-seven  of  this  chapter and article
  forty-four of the public health  law  and  all  bills  for  health  care
  services rendered by health care providers pursuant to such contracts or
  agreements,  any  insurer  or  organization  or  corporation licensed or
  certified pursuant to article forty-three or forty-seven of this chapter
  or article forty-four of the public  health  law  shall  adhere  to  the
  following standards:
    (a)  Except  in  a  case  where  the  obligation  of  an insurer or an
  organization or corporation licensed or certified  pursuant  to  article
  forty-three  or forty-seven of this chapter or article forty-four of the
  public health law to pay a claim submitted by a policyholder  or  person
  covered  under  such  policy  ("covered  person") or make a payment to a
  health care provider is  not  reasonably  clear,  or  when  there  is  a
  reasonable  basis supported by specific information available for review
  by the superintendent that such claim or bill for health  care  services
  rendered  was  submitted  fraudulently,  such insurer or organization or
  corporation shall pay the claim to a policyholder or covered  person  or
  make  a  payment to a health care provider within thirty days of receipt
  of a claim or bill for services rendered that  is  transmitted  via  the
  internet or electronic mail, or forty-five days of receipt of a claim or
  bill  for  services  rendered  that is submitted by other means, such as
  paper or facsimile.
    (b) In a case where the obligation of an insurer or an organization or
  corporation licensed or certified pursuant  to  article  forty-three  or
  forty-seven  of  this chapter or article forty-four of the public health
  law to pay a claim or make a payment for health care  services  rendered
  is  not  reasonably  clear  due  to  a  good faith dispute regarding the
  eligibility of a person for coverage, the liability of  another  insurer
  or  corporation or organization for all or part of the claim, the amount
  of the claim, the benefits covered under a contract or agreement, or the
  manner in which services  were  accessed  or  provided,  an  insurer  or
  organization  or  corporation  shall  pay  any undisputed portion of the
  claim in accordance with this subsection and  notify  the  policyholder,
  covered person or health care provider in writing within thirty calendar
  days of the receipt of the claim:
    (1)  that  it  is  not  obligated to pay the claim or make the medical
  payment, stating the specific reasons why it is not liable; or
    (2)  to  request  all  additional  information  needed  to   determine
  liability to pay the claim or make the health care payment.
    Upon  receipt  of  the  information requested in paragraph two of this
  subsection or an appeal of a claim or  bill  for  health  care  services
  denied  pursuant  to  paragraph  one  of  this subsection, an insurer or
  organization or corporation licensed or certified  pursuant  to  article
  forty-three  or forty-seven of this chapter or article forty-four of the
  public health law shall comply with subsection (a) of this section.
    (c) (1) Except as provided in paragraph two of this  subsection,  each
  claim  or  bill  for health care services processed in violation of this
  section shall constitute  a  separate  violation.  In  addition  to  the
  penalties  provided  in  this  chapter,  any  insurer or organization or
  corporation that fails to adhere to  the  standards  contained  in  this
  section  shall be obligated to pay to the health care provider or person
  submitting the claim, in full settlement of the claim or bill for health
  care services, the amount of the  claim  or  health  care  payment  plus
  interest  on  the  amount  of  such  claim or health care payment of the

greater of the rate equal  to  the  rate  set  by  the  commissioner  of
  taxation  and  finance  for corporate taxes pursuant to paragraph one of
  subsection (e) of section one thousand ninety-six  of  the  tax  law  or
  twelve  percent  per  annum,  to  be computed from the date the claim or
  health care payment was required to be made. When the amount of interest
  due  on  such  a  claim  is  less  then  two  dollars,  and  insurer  or
  organization  or  corporation  shall  not be required to pay interest on
  such claim.
    (2)  Where  a  violation  of  this  section  is  determined   by   the
  superintendent  as  a  result of the superintendent's own investigation,
  examination, audit or inquiry, an insurer or organization or corporation
  licensed or certified pursuant to article forty-three or forty-seven  of
  this chapter or article forty-four of the public health law shall not be
  subject  to  a  civil  penalty  prescribed  in  paragraph  one  of  this
  subsection,  if  the  superintendent  determines  that  the  insurer  or
  organization   or   corporation   has   otherwise   processed  at  least
  ninety-eight percent of the claims  submitted  in  a  calendar  year  in
  compliance  with  this  section;  provided,  however,  nothing  in  this
  paragraph shall limit, preclude or exempt an insurer or organization  or
  corporation  from payment of a claim and payment of interest pursuant to
  this section. This paragraph shall  not  apply  to  violations  of  this
  section  determined  by  the  superintendent  resulting  from individual
  complaints submitted to the superintendent by health care  providers  or
  policyholders.
    (d) For the purposes of this section:
    (1)  "policyholder" shall mean a person covered under such policy or a
  representative designated by such person; and
    (2) "health care provider" shall mean an entity licensed or  certified
  pursuant  to  article  twenty-eight,  thirty-six  or forty of the public
  health  law,  a  facility  licensed  pursuant   to   article   nineteen,
  twenty-three  or  thirty-one  of  the  mental hygiene law, a health care
  professional licensed, registered or certified pursuant to  title  eight
  of  the  education  law,  a  dispenser  or  provider  of  pharmaceutical
  products, services or durable medical  equipment,  or  a  representative
  designated by such entity or person.
    (e)  Nothing  in this section shall in any way be deemed to impair any
  right available to the state to adjust the timing of  its  payments  for
  medical  assistance  pursuant  to  title  eleven  of article five of the
  social services  law,  or  for  child  health  insurance  plan  benefits
  pursuant  to title one-a of article twenty-five of the public health law
  or otherwise be deemed to require adjustment of payments  by  the  state
  for such medical assistance or child health insurance.
    (f)  In  any  action  brought  by  the superintendent pursuant to this
  section or article twenty-four of this chapter relating to this  section
  regarding  payments  for  medical assistance pursuant to title eleven of
  article five of the social services law,  child  health  insurance  plan
  benefits  pursuant  to  title one-a of article twenty-five of the public
  health law, benefits under the voucher  insurance  program  pursuant  to
  section  one  thousand  one  hundred  twenty-one  of  this  chapter, and
  benefits under the  New  York  state  small  business  health  insurance
  partnership program pursuant to article nine-A of the public health law,
  it  shall  be  a  mitigating  factor  that  the  insurer, corporation or
  organization is owed any premium amounts, premium adjustments, stop-loss
  recoveries or other payments  from  the  state  or  one  of  its  fiscal
  intermediaries under any such program.
    (g)  Time  period  for  submission  of claims. (1) Except as otherwise
  provided by law, health care  claims  must  be  initially  submitted  by
  health  care  providers within one hundred twenty days after the date of

service to be valid and enforceable against an insurer  or  organization
  or  corporation licensed or certified pursuant to article forty-three or
  article forty-seven of this chapter or article forty-four of the  public
  health  law.  Provided,  however,  that nothing in this subsection shall
  preclude the parties from agreeing to a time period or other terms which
  are more favorable to the health care provider. Provided  further  that,
  in  connection  with  contracts  between  organizations  or corporations
  licensed or certified pursuant to article forty-three of this chapter or
  article forty-four of the public health law and  health  care  providers
  for  the  provision  of  services  pursuant  to  section  three  hundred
  sixty-four-j or three hundred sixty-nine-ee of the social  services  law
  or  title  I-A  of article twenty-five of the public health law, nothing
  herein shall be deemed: (i) to preclude the parties from agreeing  to  a
  different  time period but in no event less than ninety days; or (ii) to
  supersede contract provisions in existence at the time  this  subsection
  takes  effect  except  to  the  extent that such contracts impose a time
  period of less than ninety days.
    (2) This subsection shall not abrogate any right or  reduce  or  limit
  any  additional  time  period  for  claim  submission provided by law or
  regulation specifically applicable to coordination of benefits in effect
  prior to the effective date of this subsection.
    (h)  (1)  An  insurer  or  organization  or  corporation  licensed  or
  certified pursuant to article forty-three or article forty-seven of this
  chapter  or  article  forty-four of the public health law shall permit a
  participating health care provider to request reconsideration of a claim
  that is denied exclusively because it was untimely submitted pursuant to
  subsection  (g)  of  this  section.  The  insurer  or  organization   or
  corporation shall pay such claim pursuant to the provisions of paragraph
  two  of this subsection if the health care provider can demonstrate both
  that: (i) the health care provider's non-compliance was a result  of  an
  unusual  occurrence;  and (ii) the health care provider has a pattern or
  practice of timely submitting claims in compliance with subdivision  (g)
  of this section.
    (2)  An  insurer  or organization or corporation licensed or certified
  pursuant to article forty-three or article forty-seven of  this  chapter
  or   article  forty-four  of  the  public  health  law  may  reduce  the
  reimbursement due to a health care provider for an untimely  claim  that
  otherwise  meets the requirements of paragraph one of this subsection by
  an amount not to exceed twenty-five percent of  the  amount  that  would
  have  been  paid  had  the  claim  been  submitted  in  a timely manner;
  provided, however, that nothing in  this  subsection  shall  preclude  a
  health  care provider and an insurer or organization or corporation from
  agreeing to a lesser reduction. The provisions of this subsection  shall
  not apply to any claim submitted three hundred sixty-five days after the
  date   of  service,  in  which  case  the  insurer  or  organization  or
  corporation may deny the claim in full.