2012 New York Consolidated Laws
PBH - Public Health
Article 44 - (4400 - 4414) HEALTH MAINTENANCE ORGANIZATIONS
4406 - Health maintenance organizations; regulation of contracts.

 
    §  4406. Health maintenance organizations; regulation of contracts. 1.
  The contract between a health maintenance organization and  an  enrollee
  shall  be  subject  to  regulation by the superintendent as if it were a
  health insurance subscriber contract, and  shall  include,  but  not  be
  limited to, all mandated benefits required by article forty-three of the
  insurance  law. Such contract shall fully and clearly state the benefits
  and limitations  therein  provided  or  imposed,  so  as  to  facilitate
  understanding  and  comparisons,  and to exclude provisions which may be
  misleading or unreasonably confusing. Such contract shall be  issued  to
  any  individual and dependents of such individual and any group of fifty
  or fewer employees or members, exclusive of spouses and  dependents,  or
  any  employee or member of the group, including dependents, applying for
  such contract at any  time  throughout  the  year,  and  may  include  a
  pre-existing  condition  provision  as  provided  for  in  section  four
  thousand three hundred eighteen of the insurance law, provided, however,
  that  such  requirements  shall  not  apply  to  a  health   maintenance
  organization  exclusively serving individuals enrolled pursuant to title
  eleven of article five of the social services  law,  title  eleven-D  of
  article  five  of  the  social  services  law,  title  one-A  of article
  twenty-five of the public health law or title eighteen  of  the  federal
  Social Security Act, and, further provided, that such health maintenance
  organization   shall  not  discontinue  a  contract  for  an  individual
  receiving comprehensive-type coverage in effect prior to January  first,
  two  thousand  four who is ineligible to purchase policies offered after
  such date pursuant to  this  section  or  section  four  thousand  three
  hundred  twenty-two  of  this  article due to the provision of 42 U.S.C.
  1395ss in effect prior to January first, two thousand four.  Subject  to
  the  creditable  coverage requirements of subsection (a) of section four
  thousand three hundred eighteen of the insurance law,  the  organization
  may, as an alternative to the use of a pre-existing condition provision,
  elect  to  offer contracts without a pre-existing condition provision to
  such groups but may require that coverage  shall  not  become  effective
  until  after  a specified affiliation period of not more than sixty days
  after the application for coverage is submitted. The organization is not
  required to provide health care services or benefits during such  period
  and  no  premium  shall  be  charged for any coverage during the period.
  After January first, nineteen hundred ninety-six, all individual  direct
  payment  contracts  shall  be  issued  only  pursuant  to  sections four
  thousand three  hundred  twenty-one  and  four  thousand  three  hundred
  twenty-two of the insurance law. Such contracts may not, with respect to
  an  eligible  individual  (as  defined in section 2741(b) of the federal
  Public  Health  Service  Act,  42  U.S.C.  §  300gg-41(b),  impose   any
  pre-existing condition exclusion.
    2.  (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  superintendent,  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.

    (b)  Except  as  provided  in  paragraph  (c)  of this subdivision, an
  organization may not permit  the  benefits  provided  pursuant  to  such
  out-of-plan  system  to  exceed  ten  percent  of  the total health care
  expenditures of the organization, as determined on  a  quarterly  basis,
  but  such  limitation  shall  not  apply  to  individual  direct payment
  contracts issued pursuant to section forty-three hundred  twenty-two  of
  the  insurance  law.  In  determining the amount of benefits provided in
  connection with the use of such providers,  an  organization  shall  not
  include benefits provided pursuant to a referral made by a participating
  provider or benefits provided in emergency situations.
    (c)  An  organization  may  exceed  the ten percent level by up to two
  percent in any given quarter provided that  the  organization  does  not
  exceed the ten percent level by the end of the following quarter.
    (d)  If the commissioner determines that an organization has permitted
  the benefits provided pursuant to an out-of-plan system  to  exceed  ten
  percent,   except   as  permitted  by  paragraph  (b)  or  (c)  of  this
  subdivision,  the  commissioner  may,  where  appropriate,   assess   an
  organization  a  civil  penalty  not  to exceed the amount determined by
  multiplying the percentage permitted in excess of  ten  percent  by  the
  amount, in dollars, of the difference between what the organization paid
  all  inpatient  hospitals for such year and the amount such organization
  would have paid such hospitals had it been a payor within the categories
  specified in paragraph (b) of subdivision one  of  section  twenty-eight
  hundred seven-c of this chapter and not authorized to negotiate hospital
  rates.  The  commissioner,  in consultation with the superintendent, may
  revoke, suspend or limit an approval issued pursuant to this subdivision
  for non-compliance by the organization with any  of  the  provisions  of
  this article or the rules and regulations promulgated thereunder.
    (e)   The   indemnification   of   enrollees  of  the  services  of  a
  non-participating provider may be  subject  to  deductibles,  copayments
  and/or coinsurance approved by the superintendent.
    (f)  Nothing  in  this  subdivision  shall  be  construed  to limit an
  organization's ability to manage the care of enrollees or the  types  of
  health  services  covered,  to  conduct  utilization  review  of quality
  assurance activities.
    (g) The commissioner may prohibit an organization determined  to  have
  an  inadequate  network  of  participating providers from permitting new
  elections pursuant to this subdivision as of the date of notification of
  such determination by the  commissioner.  Notification  of  such  action
  shall be given by the organization to each enrollee.
    (h)  An organization providing comprehensive health services under one
  or more assumed names shall be deemed to be offering its plan through  a
  line   of   business   corresponding  to  each  such  assumed  name.  An
  organization may, pursuant to the provisions of this subdivision, permit
  enrollees of one or more lines of business to elect to receive  services
  from  providers  not  participating  in  such  line or lines of business
  provided, however, that with respect  to  each  line  of  business  such
  elections  shall  be permitted only to the extent authorized pursuant to
  paragraphs (b) and (c) of this subdivision.
    (i) Nothing herein shall be deemed to prohibit  a  health  maintenance
  organization  from  offering  services  in  connection  with  a  company
  appropriately licensed pursuant to the insurance law.
    3. (a) No contract issued pursuant to this section shall provide  that
  services  of  a participating hospital will be covered as out-of-network
  services solely on the basis that the health care provider admitting  or
  rendering services to the enrollee is not a participating provider.
    (b)  No  contract  issued  pursuant to this section shall provide that
  services of a participating health care  provider  will  be  covered  as

  out-of-network  services  solely  on  the  basis  that  the services are
  rendered in a non-participating hospital.
    (c)  For  purposes  of this subdivision, a "health care provider" is a
  health care professional licensed, registered or certified  pursuant  to
  title  eight  of  the  education  law  or  a  health  care  professional
  comparably licensed, registered or certified by another state.
    4. Nothing in this section shall be  construed  to  require  a  health
  maintenance  organization  in  its  provision  of a comprehensive health
  services plan to meet the requirements of an insurer under the insurance
  law.
    5. If an  enrollee  requires  nursing  facility  placement  and  is  a
  resident  of  a  continuing  care  retirement community authorized under
  article  forty-six  of  this  chapter,  the  enrollee's   primary   care
  practitioner  must  refer  the  enrollee  to  that  community's  nursing
  facility  if  medically  appropriate;  if  the  facility  agrees  to  be
  reimbursed  at  the  health  maintenance  organization's  contract  rate
  negotiated with similar providers for similar services and supplies,  or
  negotiates  a  mutually  agreed upon rate; and if the facility meets the
  health maintenance  organization's  guidelines  and  standards  for  the
  delivery of medical services.