2013 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.
    * NB Effective until January 1, 2014
    * 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,   the   superintendent  may,  after  giving
  consideration to  the  public  interest,  exempt  a  health  maintenance
  organization from the requirements of this section provided that another
  health  insurer  or  health  maintenance  organization within the health
  maintenance organization's same holding company system,  as  defined  in
  article  fifteen  of  the  insurance law, including a health maintenance
  organization operated  as  a  line  of  business  of  a  health  service
  corporation  licensed  under  article  forty-three of the insurance law,
  offers coverage that, at a  minimum,  complies  with  this  section  and
  provides  all  of  the consumer protections required to be provided by a
  health  maintenance  organization   pursuant   to   this   chapter   and
  regulations,  including those consumer protections contained in sections
  four thousand four hundred three and four thousand four hundred  eight-a
  of   this  chapter.  The  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.
    * NB Effective January 1, 2014
    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.