Insurance Circular Letter No. 9 (2021)

October 7, 2021

TO:

All 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, Prepaid Health Services Plans, and Utilization Review Agents

RE:

Hospital Staffing and Suspension of Utilization Review Requirements and Appeal Timeframes

STATUTORY AND REGULATORY REFERENCES:  N.Y. Insurance Law §§ 4903, 4904, and 4914; Public Health Law §§ 4903, 4904, and 4914; and Executive Order No. 4

I. Purpose

On September 27, 2021, Governor Kathy Hochul issued Executive Order No. 4 (“EO 4”) to address the current hospital staffing shortages.  As hospitals reassign staff to provide patient care activities, certain administrative functions will be impacted.  The purpose of this circular letter is to advise insurers authorized to write accident and health insurance in this state, Article 43 corporations, student health plans certified pursuant to Insurance Law § 1124, municipal cooperative health benefit plans, health maintenance organizations, and prepaid health services plans (collectively “issuers”), with respect to commercial health insurance coverage, Child Health Plus, Essential Plan, and Medicaid managed care coverage, and independent agents performing utilization review under contract with such issuers, that certain utilization review requirements and appeal timeframes must be suspended upon receipt of a certification from a hospital, or a health system on behalf of its hospitals under common control, that suspension is needed to increase the availability of health care staff at the designated hospital facilities.  For purposes of this circular letter, “hospital” includes a nursing home consistent with Public Health Law § 2801.  The suspension must remain in effect during the pendency of the relevant provisions of EO 4, or upon the issuer’s receipt of notification from a hospital that the suspension is no longer needed, if earlier.

II. Suspension of Preauthorization Requirements for Scheduled Surgeries and Admissions at Hospitals and Outpatient Hospital Services

Due to the current hospital staffing shortages, many hospitals are shifting capable staff resources from administrative functions to patient care activities.  Insurance Law and Public Health Law § 4903 permit issuers to require preauthorization for health care services, other than emergency services.  Hospitals may lack the resources for staff to respond to utilization review requests for preauthorization.  In accordance with EO 4, issuers must suspend preauthorization for scheduled surgeries in hospital facilities, admissions to hospitals, and/or hospital outpatient services upon receipt of a hospital’s signed certification that such suspension is needed to increase the availability of the hospital’s health care staff.  The suspension of preauthorization must remain in effect during the pendency of the relevant provisions of EO 4, or upon the issuer’s receipt of notification from the hospital that the suspension is no longer needed, if earlier.  The hospital should use its best efforts to provide 48 hours’ notice to the issuer after an admission to a hospital, including information necessary for an issuer to assist in coordinating care and discharge planning.  Issuers may retrospectively review these services upon the resumption of utilization review.

III. Suspension of Concurrent Review for Inpatient and Outpatient Hospital Services

Insurance Law § 4903(c)(1) and Public Health Law § 4903(3)(a) permit issuers to concurrently review services for medical necessity, including continued or extended health care services or additional services for an insured undergoing a course of continued treatment prescribed by a health care provider.  This review is known as concurrent review.  In accordance with EO 4, issuers must suspend concurrent review for inpatient and outpatient hospital services upon receipt of a hospital’s signed certification that suspension is needed to increase the availability of the hospital’s health care staff.  The suspension of concurrent review must remain in effect during the pendency of the relevant provisions of EO 4, or upon the issuer’s receipt of notification from the hospital that the suspension is no longer needed, if earlier.  Issuers may retrospectively review these services upon the resumption of utilization review.

IV. Suspension of Retrospective Review for Inpatient and Outpatient Hospital Services at In-Network Hospitals and Payment of Claims

Insurance Law § 4903(d) and Public Health Law § 4903(4) permit issuers to retrospectively review services for medical necessity.  This review is known as retrospective review.  In accordance with EO 4, issuers must suspend retrospective review for inpatient and outpatient hospital services provided at in-network hospitals upon receipt of a hospital’s signed certification that suspension is needed to increase the availability of the hospital’s health care staff.  The suspension of retrospective review must remain in effect during the pendency of the relevant provisions of EO 4, or upon the issuer’s receipt of notification from the hospital that the suspension is no longer needed, if earlier.  Issuers must pay claims from in-network hospitals for inpatient and outpatient hospital services that are otherwise eligible for payment without first reviewing the claims for medical necessity during the suspension of retrospective review.  However, issuers may review these services upon the resumption of utilization review.

V. Hospital Discharge Planning and Preauthorization for Home Health Care Services and Inpatient Rehabilitation Services Following a Hospital Admission

Insurance Law and Public Health Law § 4903 permit issuers to require preauthorization for health care services other than emergency services.  In accordance with EO 4, issuers must suspend preauthorization for home health care services following a hospital admission and inpatient rehabilitation services following a hospital admission upon receipt of a hospital’s signed certification that suspension is needed to increase the availability of the hospital’s health care staff.  To the extent that preauthorization is required for inpatient rehabilitation services for mental health or substance use disorder treatment following a hospital admission, those preauthorization requirements are also included in this suspension.  Issuers should provide hospitals with an up-to-date list of all in-network rehabilitation facilities and skilled nursing facilities to facilitate discharges.  Hospitals should use their best efforts to transfer insureds to in-network providers.  The rehabilitation facility or skilled nursing facility should use its best efforts to provide notification of the admission to the issuer.  Issuers may review home health care services and inpatient rehabilitation services, other than services at a nursing home, for medical necessity concurrently and retrospectively.  The suspension of preauthorization must remain in effect during the pendency of the relevant provisions of EO 4, or upon the issuer’s receipt of notification from the hospital that the suspension is no longer needed, if earlier.

VI. Internal and External Appeal Timeframes for Hospitals

Insurance Law § 4904(c) and Public Health Law § 4904(3) provide that a health care provider has a period of no less than 45 days after receipt of notice of an adverse determination to file an internal appeal with the issuer.  Insurance Law § 4914(b)(1) and Public Health Law § 4914(2)(a) provide that a health care provider has 60 days to initiate an external appeal after the health care provider receives notice of a final adverse determination.  In accordance with EO 4, the timeframes for a hospital to submit an internal appeal and an external appeal must be tolled to the extent necessary to increase the availability of the hospital’s health care staff.  The timeframes will be tolled during the pendency of the relevant provisions of EO 4, or upon notification from the hospital that tolling is no longer needed, if earlier.

VII. Hospital Certification to the Issuer and to DFS and DOH

Pursuant to EO 4, in order for an issuer to suspend the designated utilization review requirements, the hospital must certify to the issuer, under penalty of law, that suspension is necessary to increase the availability of its health care staff.  The person signing the certification must be the highest-level management person of the hospital with authority to sign on behalf of the hospital, which may be the Chief Executive Officer, Chief Financial Officer, Chairperson of the Governing Board, or Officer (President, Vice President, Secretary or Treasurer).  A hospital must request suspension of the designated utilization review requirements for all issuers with which it contracts, and cannot selectively request suspension of the requirements for some issuers and not others.

The hospital must use the certification form developed by the Department of Financial Services (“DFS”) and the Department of Health (“DOH”), which must include the estimated number of staff who will be reassigned from utilization review functions to patient care activities, which type of utilization review requirements it is requesting to be suspended, and whether it is requesting a tolling of the internal and external appeal time frames. The certification can be found here. The issuer must suspend the designated utilization review requirements and toll its internal appeal timeframes upon receipt of a completed certification form from the hospital.  The hospital must also provide a copy of the certification to DOH at [email protected] and, if it is requesting that the external appeal timeframes be tolled, to DFS at [email protected].

The hospital must immediately inform the issuer to which it sent a certification and DOH and DFS if the suspension of utilization review requirements is no longer necessary to increase the availability of health care staff pursuant to EO 4.

In addition, DFS and DOH reserve the right to request additional information in the future with regard to EO 4 and the election of a hospital to suspend utilization review requirements.

VIII.   Resumption of Utilization Review

Upon resumption of utilization review, issuers may, to the extent necessary, request information to perform a retrospective review, reconcile claims, and make any payment adjustments.  Issuers should ensure that documentation requirements for retrospective review are reasonable, and issuers should take into consideration that hospitals may not be able to provide the typical level of documentation, or will incur delays in furnishing the requested documentation, as a result of the current hospital staffing shortages.

IX. Conclusion

As hospitals redeploy staff to provide patient care activities due to the current hospital staffing shortages, certain administrative functions will be impacted.  Issuers and hospitals are encouraged to work together to ensure that patients get the care that they need while hospitals shift resources in response to these staffing shortages.

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

 

Very truly yours,

 

Lisette Johnson
Chief, Health Bureau