by Jason E. Lopata, Esq.
In New York State, a ‘prompt payment’ law has been in effect since 1998 which ensures that ‘clean claims’ are processed by health care insurance companies within 45 days of receipt (you can read a summary of this law here). Changes passed by the New York legislature in 2009 which affect the processing standards for health care payments and services become effective on January 1, 2010. These changes and additions to the legislation relate to the time period both for the submission of claims by providers and for the required response to those claims by insurers.
The first relevant provision is a new standard set regarding the time period for submission of claims. Health care claims must now be initially submitted by health care providers within 120 days after the date of service in order for them to be enforceable against an insurer. Health care providers and insurers may agree to a longer or shorter period of time (per specific contract), as long as that period is no less than 90 days. Current contracts in existence will still be in effect, however, any agreements that have a submission requirement of less than 90 days will now be superseded with that 90 day requirement.
The new legislation also states that insurers may reduce the reimbursement to health care providers by no more than 25% for untimely claims. A lesser reduction can still be negotiated between providers and insurers. However, this reduction limitation shall NOT apply to untimely claims submitted over ONE year after the date of service, which may be denied completely. For many providers, insurers will not pay claims that are not filed timely anyway, but this provision at least allows for some recourse within the one year time frame.
Lastly, insurers are now required to pay a covered claim within 30 days of receipt of that claim or bill for services transmitted via the internet or electronic mail. This is down from the 45 day requirement that previously applied to such claims, and still remains in effect for claims submitted by other means, such as paper or facsimile. Thus, the New York State legislation is providing a significant incentive to submit claims electronically for more prompt payment, and many insurers are now requiring that all claims have to be submitted electronically in order to process them.
You can read about these changes to NY CLS Ins. Sec. 3224-a relating to the “processing of all health care claims submitted under contracts or agreements…for health care services rendered by health care providers” at http://www.ins.state.ny.us/hprovrght.htm. While you are there, make yourself familiar with ALL your Health Care Provider Rights located on that page too. There is valuable information available on the following topics:
– Participation in a Health Plan’s Network
– Provider Contracts
– Termination of Provider Contracts
– Non-renewal of a Participating Provider Contract
– Performance and Practice Information
– Patient Care and Treatment
– Claims Processing
– Overpayment Recovery Efforts
– Prompt Payment of Health Care Claims
You can also report a prompt payment violation to the Insurance Department here http://www.ins.state.ny.us/provlhow.htm