New York’s Surprise Medical Bill Law went into effect on March 31, 2015, intending to protect consumers from financial devastation due to unexpected bills for out-of-network health care services. The new law imposes certain disclosure requirements on physicians and hospitals to ensure that patients are advised when physicians or other health care providers are “out-of-network” (OON), i.e., providers who do not participate in the patient’s health insurance plan.
Providers must now identify in writing or via website the health plans and hospitals they are affiliated with prior to providing non-emergency care to patients, and verbally at the time of making appointments. If a provider is OON, he/she must advise the patient, prior to providing any non-emergency services, that the estimated charge for services is available upon request, and if requested, must disclose the estimated charges with a warning that costs could be higher if unanticipated complications occur.
If a physician, whether in-network or OON, schedules or refers a patient for health services by another provider who is OON, the physician must provide the name of such provider and advice on how to obtain information about the health plans in which such provider participates. This includes referrals to anesthesiologists, laboratories, pathologists, radiologists, or assistant surgeons.
Under the new law, a patient will not have to pay more than the usual “in-network” cost-sharing charges, such as copayments, coinsurance and deductibles, for OON emergency services in a hospital emergency room. The patient’s health plan and the OON provider will have to negotiate the fees directly or utilize an independent dispute resolution (IDR) process provided for under the new law.
Similarly, a patient who receives non-emergency services from an OON provider, where adequate in-network providers are not available, will not have to pay more than the usual in-network cost-sharing amounts. If a health plan disagrees with the patient on whether there is adequate in-network coverage available, the parties can bring the dispute to New York’s external review system.
Another key feature of the new law is that if a patient receives a “Surprise Medical Bill”, he/she will only be responsible for his/her in-network copayment, coinsurance and deductible amounts, but must sign an “Assignment of Benefits” form (to be supplied by the provider) and submit it along with the medical bill to the patient’s health plan, stating that the bill was a “Surprise Bill”.
A patient will be deemed to have received a “Surprise Bill” if (1) the patient was insured and received services at a hospital or ambulatory surgery center from an OON physician where an in-network physician was unavailable or where the patient had no knowledge that the physician was OON; or (2) the insured patient did not explicitly consent in writing to the services by the OON provider; or (3) an uninsured patient received non-emergency treatment without first receiving the disclosures about OON status and the cost of services as required under the new law.
A bill is not a “Surprise Bill” if an in-network physician is available but the patient chooses to receive services from an OON physician.
If the OON provider and the patient’s health plan cannot agree on an appropriate fee for services where there is a “Surprise Bill”, either the health plan or the provider may submit the disputed “Surprise Bill” to an IDR. The health plan must pay a reasonable payment to the provider while the IDR is pending. The IDR panel will consider, among other things, whether there is gross disparity between the fees charged compared to similarly qualified providers in the same area, the level of training, education and experience of the provider, and the circumstances and complexity of the case. The IDR decision must be issued within 30 days of submission and is binding on the parties. When IDR is used, the patient is taken out of the payment negotiation process – it is left to the health plan, the provider and the IDR entity. A “baseball style” arbitration will be used by the IDR entity, i.e. choosing between the charge by the provider and the payment by the insurer. This is intended to promote reasonableness on both sides. The losing party in the IDR must pay for the costs of the IDR process. If the IDR parties agree on a mutual settlement, the costs of the IDR will be shared equally by both parties. An IDR process will also be available for patients who are not insured.
Under the new law, hospitals and health plans also have disclosure and other obligations which are intended to protect consumers. The Department of Financial Services has issued guidance to assist providers and consumers in understanding the new law which is available at www.dfs.ny.gov/consumer/hrights.htm.
By Ellen F. Kessler
Ellen F. Kessler is a partner at Ruskin Moscou Faltischek, P.C. where she is a member of the Firm’s Health Law Department, bringing special expertise as both an experienced attorney and a registered nurse. She regularly counsels health care clients on mergers, acquisitions and establishment of professional practices, employment and professional service relationships, arrangements with management companies, professional licensure issues, Article 28 and Article 36 facilities, and regulatory matters under state and federal law. She can be reached at (516) 663-6522 or firstname.lastname@example.org.