June 12, 2019

On June 6, 2019, the New York State Assembly passed a bill amending New York State Financial Services Law. The bill is aimed at protecting patients from excess hospital charges resulting from out-of-network emergency medical bills.

As it currently stands under the Financial Services Law, alternative dispute resolution for emergency services is only available when an insurance company receives a bill for emergency services billed by a non-participating (i.e., out-of-network) physician–not for emergency services provided by non-participating hospitals.  This amendment proposes to include emergency services billed by hospitals (in addition to physicians), including inpatient services which follow an emergency room visit. 

Under the proposed amendment, when an insurance company receives a bill for emergency services (from a non-participating physician or hospital), the insurance company shall pay the amount that it determines is ”reasonable for the emergency services rendered.”

As set forth in the Financial Services Law, the criteria for determining the ”reasonable fee for health care services” includes the following:

  • whether there is a gross disparity between the fee charged by the health care provider for services rendered as compared to a similarly situated patient;
  • the level of training, education, and experience of the health care provider;
  • the health care provider’s usual charge for comparable services with regard to patients in health care plans in which the health care provider is not participating;
  • the circumstances and complexity of the case, including the time and place of the services;
  • individual patient characteristics; and
  • the usual customary cost of the physician services.

As the Financial Services Law exists today, both the non-participating provider and the insurance company may submit a dispute, regarding a fee or payment for emergency services, for review by an independent dispute resolution entity.  The independent dispute resolution entity may render a decision or may recommend settlement negotiations between the parties.

It is important to note that the provisions of this section will not apply to hospitals that had at least sixty percent (60%) of inpatient discharges annually which consisted of Medicaid, uninsured, and dual eligible individuals as determined by the New York State Department of Health, in its determination of safety net hospitals.

Past versions of this bill that have been proposed unanimously passed the New York State Assembly but died when they reached the New York State Senate.  It will be interesting to see if this is the year the bill gains traction in the Senate, and advances to Governor Cuomo’s desk.

The information contained in this advisory is for general educational purposes only. It is presented with the understanding that neither the author nor Hancock, Daniel & Johnson, P.C., is offering any legal or other professional services. Since the law in many areas is complex and can change rapidly, this information may not apply to a given factual situation and can become outdated. Individuals desiring legal advice should consult legal counsel for up-to-date and fact-specific advice. Under no circumstances will the author or Hancock, Daniel & Johnson, P.C. be liable for any direct, indirect, or consequential damages resulting from the use of this material.

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