Insurance Circular Letter No. 14 (2020)

August 5, 2020

STATUTORY AND REGULATORY REFERENCES: N.Y. Insurance Law §§ 2601, 3217-a, 3221, 4305, and 4324; N.Y. Public Health Law § 4408; 11 NYCRR 52 (Insurance Regulation 62)

I. Purpose

After a period of offering primarily telehealth visits during the COVID-19 pandemic, many physicians, dentists, and other health care providers (collectively, “providers”) have resumed seeing patients in person. As COVID-19 transmission poses a risk in provider office settings, providers are putting necessary protective measures in place, including sanitizing exam rooms and using personal protective equipment, such as masks, gowns, and gloves (collectively, “PPE”). The Department of Financial Services (“Department”) has recently received complaints regarding participating providers charging insureds fees for the providers’ use of PPE during in-person visits for covered services under health or dental insurance policies or contracts. These fees for PPE are in addition to the insureds’ cost-sharing for covered services.

This circular letter reminds insurers authorized to write accident and health insurance in New York State, Article 43 corporations, health maintenance organizations, student health plans certified pursuant to Insurance Law § 1124, municipal cooperative health benefit plans, and prepaid health services plans (collectively, “issuers”) that they should ensure that insureds are not charged fees by participating providers for covered services that go beyond the insureds’ financial responsibility as described in the insureds’ policies or contracts.

II. Discussion

Insurance Law §§ 3221(a)(6) and 4305(a) require issuers to issue to the group policyholder or contract holder, for delivery to each member of the group, a certificate setting forth in summary form the essential features of the insurance coverage. Furthermore, Insurance Law §§ 3217-a(a)(5) and 4324(a)(5) and Public Health Law § 4408(1)(e) require issuers to disclose in the policy or contract, or through a separate disclosure statement, an explanation of an insured’s financial responsibility for payment of premiums, coinsurance, co-payments, deductibles, and any other charges, annual limits on an insured’s financial responsibility, caps on payments for covered services, and financial responsibility for non-covered health care procedures, treatments, or services.^[1] Furthermore, to assist consumers in New York State to better understand and evaluate the benefits provided in policies or contracts, issuers must make a full and fair disclosure of policy or contract benefits pursuant to 11 NYCRR §§ 52.1(d) and 52.54. These sections of the Insurance Law and regulations and the Public Health Law clearly require issuers to disclose the insured’s financial responsibility for covered services, including any other charges, and such disclosure should be made for medical and dental coverage.

The Department has been made aware that participating providers, particularly under dental insurance policies or contracts, are charging insureds fees at the time of in-person visits for PPE or other charges related to increased costs due to COVID-19 that are in addition to the insureds’ cost-sharing for such covered services. A provider who participates with an issuer’s provider network has agreed to accept a reimbursement amount from the issuer for covered services, with the insured responsible for the cost-sharing set forth in the insured’s health or dental insurance policy or contract. A participating provider should not charge the insured fees or other charges in addition to the insured’s financial responsibility for covered services. In addition, the Department does not approve policy or contract provisions that hold the insured responsible for the cost of a participating provider’s PPE.

Accordingly, issuers should ensure that their participating providers are not charging insureds any fees or other charges beyond the insureds’ financial responsibility for covered services as set forth in the insureds’ health or dental insurance policies or contracts. Issuers should immediately notify participating providers that they should not charge insureds fees that are beyond the insureds’ financial responsibility for covered services, such as fees for PPE, and issuers should instruct participating providers to refund any such fees to insureds. In addition, issuers should notify insureds that they should not be charged fees for PPE when visiting a participating provider and include the issuer’s contact information for insureds to submit a complaint regarding PPE charges. Issuers should resolve any issues regarding increased costs due to COVID-19 directly with their participating providers, including for PPE, and insureds should be held harmless for such charges. In order to facilitate resolution, issuers may need to request information from participating providers regarding insureds who were charged fees that exceeded their financial responsibility, and participating providers should report such information to issuers, upon request by issuers. Issuers should work with participating providers to ensure that refunds are provided to insureds. Within 90 days of this circular letter, issuers should report to the Department, at the e-mail address below, the amount of PPE fees that were charged to insureds, the number of insureds impacted, and provide a description of how refunds will be provided.

III. Conclusion

Issuers should ensure that insureds are not charged fees by participating providers for covered services that go beyond the insureds’ financial responsibility as described in the insureds’ policies or contracts. In the event an insured has paid such a fee, an issuer should resolve the issue for the insured with its participating provider. The Department will monitor compliance with these requirements, including during market conduct exams. The Department may take action at any time against an issuer for failing to adhere to the requirements of this circular letter.

Please direct any questions regarding this circular letter by email to [email protected].

Very truly yours,

Lisette Johnson
Chief, Health Bureau

^[1] The insurance policy or contract controls in the event of any inconsistency between a separate written disclosure statement and the insurance policy or contract.