Insurance Circular Letter No. 10 (2021)

December 17, 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 Health Care Providers

RE:

The No Surprises Act, Independent Dispute Resolution Process, and Disclosure of Protections from Balance Billing

I. Purpose

The purpose of this circular letter is to provide guidance to 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”) and health care providers (“providers”) regarding the independent dispute resolution (“IDR”) process in the federal No Surprises Act (“NSA”) and New York’s IDR process in Financial Services Law Article 6 and related disclosure requirements.

II. Background

The NSA was signed into law as part of the Consolidated Appropriations Act of 2021 (Public Law 116-260; Division BB § 109) on December 27, 2020 and takes effect on January 1, 2022. NSA § 103 amends 42 U.S.C. § 300gg et seq. to establish an IDR process for non-emergency services performed by non-participating providers at in-network hospitals, hospital outpatient departments, critical access hospitals, and ambulatory surgical centers (collectively, “facilities”) and out-of-network emergency services in the emergency department of a hospital or independent freestanding emergency department.1 The amendments apply to plan years beginning on or after January 1, 2022.

The NSA provides that the federal IDR process will apply and may be used by providers and issuers to determine the out-of-network rate for emergency services in the emergency department of a hospital or independent freestanding emergency department and non-emergency items and services furnished by non-participating providers during a visit to a participating health care facility when an All-Payer Model Agreement under Social Security Act § 1115A or “specified state law” does not apply. Under 42 U.S.C. § 300gg-111(a)(3)(I), a “specified state law” is a state law that provides for a method of determining the total amount payable in the case of an insured receiving an item or service from a non-participating provider at a participating facility or emergency services in the emergency department of a hospital or independent freestanding emergency department. For a state law to determine the amount upon which cost-sharing is based and the out-of-network rate, the state law must apply to: (1) the plan, issuer, or coverage involved; (2) the non-participating provider or non-participating emergency facility involved; and (3) the item or service involved. When a state has a specified state law, the state law and the state IDR process, rather than the federal IDR process, will apply and the amount upon which cost-sharing is based and the out-of-network rate for emergency and non-emergency services subject to surprise billing protections are calculated based on such specified state law.

New York has an IDR process that applies to out-of-network emergency services,2 including inpatient services that follow an emergency room visit, in hospital facilities, and surprise bills in participating hospitals or ambulatory surgical centers and for services referred by a participating physician.3 The IDR process requires issuers, physicians, hospitals and ambulatory surgical centers, and providers to whom the patient was referred by their participating physician, to ensure that the insured incurs no greater out-of-pocket costs for emergency services and surprise bills than the insured would have incurred with an in-network provider. Since New York has a specified state law, the New York IDR process will continue to apply to out-of-network emergency services and surprise bills. However, while the NSA protections are similar to those already provided in New York, there are differences in the federal provisions that expand the New York protections in certain circumstances. The Department of Financial Services (“DFS”) will apply the following federal requirements to the New York IDR process beginning on January 1, 2022.4

III. Discussion of IDR Process

  1. Types of Providers Eligible for IDR

    The NSA § 103 IDR process to determine payment for out-of-network emergency services applies to bills for emergency services from providers, hospitals, and independent freestanding emergency departments. In addition, NSA § 103 applies to bills from non-participating providers for non-emergency services performed at participating facilities. The NSA is clear that the IDR process applies to providers, and not just physicians.5 NSA § 104 also states that such providers may not bill and may not hold insureds liable for payment amounts that are more than the in-network cost-sharing requirement for out-of-network emergency services and for non-emergency services performed by non-participating providers at participating facilities.6

    Financial Services Law § 605 states that physician and hospital bills for emergency services in hospital facilities (including inpatient services that follow an emergency room visit) are eligible for IDR in New York. Financial Services Law § 607 states that surprise bills for services rendered by non-participating physicians at participating hospitals and ambulatory surgical centers and services referred by participating physicians are eligible for IDR in New York. While New York’s Financial Services Law Article 6 meets the federal definition of “specified state law” in most cases, it does not meet the federal definition with respect to providers other than physicians for disputes involving emergency services (including inpatient services that follow an emergency room visit) in hospital facilities and surprise bills at participating hospitals or ambulatory surgical centers.

    If the Legislature does not expand the New York IDR process to include providers, along with physicians, the federal IDR process would apply to these disputes for plan years beginning on or after January 1, 2022 because there would not be a “specified state law” that applies. Given the federal requirements, and to minimize potential confusion, issuers and providers may submit disputes involving emergency services rendered by providers (including for inpatient services that follow an emergency room visit) in hospital facilities and surprise bills for the services of non-participating providers at participating hospitals and ambulatory surgical centers through New York’s IDR process beginning January 1, 2022. Including providers in New York’s IDR process beginning January 1, 2022 will satisfy the federal standards for the state IDR process to apply to these disputes. Providers are also reminded that pursuant to NSA § 104, they must hold insureds harmless for any amounts that are more than the in-network cost-sharing for emergency services (including inpatient services that follow an emergency room visit) in hospital facilities and surprise bills at participating hospitals or ambulatory surgical centers.

  2. Types of Services Eligible for IDR

    NSA § 102 amends 42 U.S.C. § 300gg-111(b)(2)(B) to define “visit” for purposes of defining the types of items and services furnished to an individual at a facility that are eligible for the federal IDR process. Under this section, “visit” includes, equipment and devices, telemedicine services, imaging services, laboratory services, preoperative and postoperative services, and other such services as the Secretary of the U.S. Department of Health and Human Services (“HHS”) may specify, regardless of whether the provider furnishing such items or services is at the facility.

    Neither the Insurance Law nor the Financial Services Law defines “visit.” If the Legislature does not expand the New York IDR process to include the items and services in the federal “visit” definition, the federal IDR process would apply to these disputes for plan years beginning on or after January 1, 2022 because there would not be a “specified state law” that applies. Therefore, the items and services in the federal “visit” definition will be included in the New York IDR process for emergency services and surprise bills regardless of whether the provider furnishing such items or services is at the facility. Providers and issuers are also reminded that pursuant to NSA §§ 102 and 104, Financial Services Law Article 6, and 23 NYCRR Part 400, they must hold insureds harmless for any amounts that are more than the in-network cost-sharing for emergency services (including inpatient services that follow an emergency room visit) in hospital facilities and for surprise bills at participating hospitals or ambulatory surgical centers.

  3. Safety Net Hospitals

    The federal IDR process for emergency services applies to all hospitals. Financial Services Law § 605(d) exempts hospitals that had at least 60% of inpatient discharges annually that 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 (“safety net hospitals”) from the New York IDR process for hospital bills for emergency services (including inpatient services that follow an emergency room visit). If the Legislature does not expand the New York IDR process to include hospital bills for emergency services at safety net hospitals, the federal IDR process would apply to these disputes for plan years beginning on or after January 1, 2022 because there would not be a “specified state law” that applies. Given the federal requirements, and to minimize potential confusion, issuers and hospitals may submit disputes involving hospital bills for emergency services at safety net hospitals (including inpatient services that follow an emergency room visit) through New York’s IDR process beginning on January 1, 2022. The criteria used for determining the reasonable fee in Financial Services Law § 604, and as applicable, the payment amount set forth in Financial Services Law § 605(e), will be applied to disputes involving safety net hospitals. Including safety net hospitals in New York’s IDR process beginning January 1, 2022 will satisfy the federal standards for the state IDR process to apply to these disputes. Safety net hospitals are also reminded that pursuant to NSA § 104 and Financial Services Law § 606(b), they must hold insureds harmless for any amounts that are more than the in-network cost-sharing for emergency services (including inpatient services that follow an emergency room visit) in hospital facilities.

  4. Exempt Emergency Services CPT Codes

    The federal IDR process for emergency services does not include an exemption for any American Medical Association current procedural terminology (“CPT”) codes. Financial Services Law § 602(b) exempts CPT codes 99281 - 99285, 99288, 99291 - 99292, 99217 - 99220, 99224 - 99226, and 99234 - 99236 from the New York IDR process if the bill does not exceed 120% of the usual and customary cost and the fee disputed is $714.64 (adjusted annually for inflation rates) or less after any applicable coinsurance, copayment, and deductible. If the Legislature does not expand the New York IDR process to include these CPT codes, the federal IDR process would apply for emergency services involving these CPT codes beginning on or after January 1, 2022 because there would not be a “specified state law” that applies. Given the federal requirements, and to minimize potential confusion, issuers and providers are advised that they may submit disputes involving these CPT codes for emergency services at hospital facilities through New York’s IDR process beginning January 1, 2022. Including these CPT codes in New York’s IDR process beginning January 1, 2022 will satisfy the federal standards for the state IDR process to apply to these disputes. Providers are also reminded that pursuant to NSA § 104 and Financial Services Law § 606(b), they must hold insureds harmless for any amounts that are more than the in-network cost-sharing for emergency services (including inpatient services that follow an emergency room visit) in hospital facilities.

  5. Insured’s Cost-Sharing under the IDR Process

    42 U.S.C. § 300gg-111(a)(1)(C)(iii) and (b)(1)(B) and interim final rules promulgated thereunder provide that an insured’s cost-sharing for emergency services in the emergency department of a hospital or independent freestanding emergency department, and for nonemergency services furnished by a non-participating provider at a participating facility, must be calculated based on one of the following amounts: an amount determined by an applicable All-Payer Model Agreement under Social Security Act § 1115A; if there is no such applicable All-Payer Model Agreement, an amount determined by a specified state law; or if there is no such applicable All-Payer Model Agreement or specified state law, the lesser of the billed charge or the plan’s or issuer’s median contracted rate, the latter referred to as the qualifying payment amount (“QPA”). The determination by the IDR entity of the out-of-network rate does not change the insured’s cost-sharing. See 45 C.F.R. §§ 149.110(b)(3) and 149.120(c). The cost-sharing amount remains the same as originally calculated. See id.

    Insurance Law § 3241(c) states that when an insured receives emergency services from a non-participating provider, the issuer must ensure that the insured incurs no greater out-of-pocket expenses for the emergency services than the insured would have incurred with a participating provider. Furthermore, under Financial Services Law § 605(a)(1), when an issuer receives a bill for emergency services from a non-participating physician or hospital (including a bill for inpatient services that follow an emergency room visit), the issuer must pay an amount it deems reasonable, except for the insured’s copayment, coinsurance, or deductible, if any, and must ensure that the insured incurs no greater out-of-pocket costs for the services than the insured would have incurred with a participating physician or hospital. Similarly, with respect to surprise bills, Insurance Law § 607(a)(3) provides that the issuer must pay an amount it deems reasonable, except for the insured’s copayment, coinsurance, or deductible, and 23 NYCRR § 400.5(b)(3)(i) provides that the insured shall incur no greater out-of-pocket costs for the services than the insured would have incurred with a participating physician or provider. Under Financial Services Law § 606(a) and (b), when an insured assigns benefits for a surprise bill or emergency services to a non-participating physician or hospital, the non-participating physician or hospital may not bill the insured except for any applicable copayment, coinsurance, or deductible that would be owed if the insured utilized a participating physician or hospital.

    The foregoing sections of the Insurance Law and Financial Services Law set forth that the insured’s cost-sharing and out-of-pocket costs must not exceed the amounts the insured would have paid for the services of a participating provider. Given the requirements in the federal law, and the state law language, the insured’s cost-sharing amount should not increase in the event the IDR entity determines that the issuer must pay additional amounts for the services rendered. 23 NYCRR § 400.5(a)(3)(ii) and (b)(3)(ii) state that if the issuer pays an amount less than the non-participating physician’s or non-participating hospital’s charge for emergency services or a surprise bill, the issuer must provide the insured with notice which shall explain that the insured’s cost-sharing may increase in the event the IDR entity determines that the issuer must pay additional amounts for the services of the non-participating physician or non-participating hospital. DFS will be amending 23 NYCRR § 400.5, and issuers are advised that the insured’s cost-sharing should be calculated based on the issuer’s original payment amount and cannot increase based on the IDR entity’s determination beginning on January 1, 2022. In such cases, the issuer would be responsible for paying the additional amount. However, if the IDR entity determines that the issuer must pay a non-participating hospital an amount less than the minimum payment required under Financial Services Law § 605(e), the hospital must refund the overpayment and the insured’s cost-sharing should be calculated based on this lower amount.

  6. Prohibition on Waiver of Protections from Balance Billing for Emergency Services

    NSA § 102 and 45 C.F.R. § 149.410(b) permit insureds to waive their balance billing protections for emergency services after the insured is stabilized if: (1) the provider determines that the insured is able to travel using nonmedical transportation or nonemergency medical transportation; (2) the provider satisfies the notice and consent criteria; (3) the individual is in a condition to receive the information and provide informed consent, in accordance with applicable state law; and (4) the provider satisfies any additional requirements or prohibitions under state law. However, no such waiver exists under New York law. Insurance Law § 3241(c) and Financial Services Law § 605(a) provide that an issuer must ensure that the insured incurs no greater out-of-pocket costs for the emergency services (including inpatient services that follow an emergency room visit) than the insured would have incurred with a participating physician or hospital. Additionally, Financial Services Law § 606(b) provides that when an insured assigns benefits for emergency services (including inpatient services that follow an emergency room visit) to a non-participating physician or hospital that knows the insured is insured under a health care plan, the non-participating physician or hospital may not bill the insured except for any applicable copayment, coinsurance, or deductible that would be owed if the insured used a participating physician or hospital. Neither the Insurance Law nor the Financial Services Law permits a waiver of the insured’s rights and protections from balance billing for emergency services. Therefore, issuers and providers are reminded that the NSA provisions relating to notice and consent and the waiver of protections from balance billing for bills for emergency services after the insured is stabilized do not apply in New York.

  7. Prohibition on Waiver of Protections from Balance Billing for Surprise Bills

    NSA § 102, 42 U.S.C. § 300gg-132, and 45 C.F.R. § 149.420(b) permit insureds to waive their protections from balance billing for bills from non-participating providers at in-network facilities if the notice and consent criteria are met for services that are not ancillary services. Pursuant to 45 C.F.R. § 149.420, the notice and consent must be provided to the insured within set timeframes, use a certain format, contain specified information, including a good faith estimate of the services, and meet language access standards. This waiver is not permitted for ancillary services. Under 45 C.F.R. § 149.420(b)(1), “ancillary services” mean services related to emergency medicine, anesthesiology, pathology, radiology, and neonatology, whether provided by a physician or non-physician practitioner; services provided by assistant surgeons, hospitalists, and intensivists; diagnostic services, including radiology and laboratory services; and items and services provided by a non-participating provider if there is no participating provider who can furnish such item or service at such facility.

    The Financial Services Law does not permit a waiver of the surprise bill protections when the criteria in Financial Services Law § 603(h) are met. However, Financial Services Law § 603(h)(1) states that a surprise bill does not include a bill received for health care services in a participating hospital or ambulatory surgical facility when a participating physician is available and the insured has elected to obtain services from a non-participating physician.7 DFS has received questions as to what it means for a participating physician to be considered available for the purposes of a surprise bill. For a participating physician to be considered available, the insured must have a meaningful opportunity to choose an in-network physician in advance of the services. DFS considers notice to the insured at least 72 hours in advance of the services, that otherwise satisfies the requirements of the NSA, to be a meaningful opportunity to choose an in-network physician. DFS does not consider notice on the day of the services as providing the insured with a meaningful opportunity to choose an in-network physician.

    In addition, Financial Services Law § 606(a) provides that when an insured assigns benefits for a surprise bill in writing to a non-participating physician who knows the insured is insured under a health care plan, the non-participating physician or hospital may not bill the insured except for any applicable copayment, coinsurance, or deductible that would be owed if the insured used a participating physician. The Financial Services Law does not permit a waiver of the insured’s rights and protections from balance billing for surprise bills. Therefore, issuers and providers are reminded that the NSA provisions relating to the waiver of balance billing protections for non-ancillary services do not apply in New York for surprise bills defined under Financial Services Law § 603(h)(1).

  8. Provider Hold Harmless for Emergency Services and Surprise Bills

    NSA § 104 added new 42 U.S.C. §§ 300gg-131 and 300gg-132, which set forth that non-participating providers, facilities, hospitals, and independent freestanding emergency departments may not bill and may not hold insureds liable for payment amounts that are more than the in-network cost-sharing requirement for out-of-network emergency services and for non-emergency services performed by non-participating providers at participating facilities, unless an insured waives the hold harmless protections (as described in sections F and G above). Financial Services Law § 606 provides that once an insured signs an assignment of benefits form for emergency services or a surprise bill, the non-participating physician or hospital may only bill the insured for any applicable in-network copayment, coinsurance, or deductible. Given the provisions in federal law, even if a New York insured does not sign an assignment of benefits form, providers, facilities, hospitals, and independent freestanding emergency departments may not bill and may not hold insureds liable for payment amounts that are more than the in-network cost-sharing requirement for out-of-network emergency services and for non-emergency services performed by non-participating providers at participating facilities if the requirements in 42 U.S.C. §§ 300gg-131 and 300gg-132 are met. Additionally, given the provisions in 42 U.S.C. § 300gg-111(a)(1) and (b)(1), even if a New York insured does not sign an assignment of benefits form, upon receipt of a claim from a provider for a surprise bill or for emergency services, an issuer must send the initial payment or notice of denial of the payment directly to the provider. Issuers are also reminded that they must comply with the timeframes and requirements set forth in Insurance Law § 3224-a regarding payment of claims.

IV. Requirements for Air Ambulance Bills

NSA § 105 adds 42 U.S.C. §§ 300gg-112 and 300gg-135 to protect insureds from air ambulance bills and to establish a federal IDR process to determine payment for out-of-network air ambulance bills. Pursuant to 42 U.S.C. § 300gg-112(a), issuers must hold an insured harmless for any amounts that exceed the insured’s in-network cost-sharing for out-of-network air ambulance services if the insured has coverage for in-network air ambulance services. Additionally, issuers must apply any cost-sharing amounts paid by an insured for out-of-network air ambulances services toward the insured’s in-network deductible and out-of-pocket maximum amount. Pursuant to 42 U.S.C. § 300gg-135, out-of-network air ambulance providers must not bill, and must not hold an insured liable for payment amounts that exceed the insured’s in-network cost-sharing requirement for air ambulance services if the insured has coverage for in-network air ambulance services. Air ambulance bills in New York will be subject to the federal IDR process for plan years beginning on or after January 1, 2022, and issuers and providers are expected to comply with these requirements.

V. Requirements for Disclosure of Patient Protections from Balance Billing

  1. Provider Requirements

    NSA § 104 adds a new 42 U.S.C. § 300gg-133 that requires providers to make certain disclosures to patients regarding balance billing protections. Beginning January 1, 2022, each health care provider and facility must make publicly available, post on their public websites, and provide to insureds, a one-page notice in clear and understandable language containing information on: the requirements and prohibitions of such provider or facility under 42 U.S.C. §§ 300gg-131 and 300gg-132 (relating to prohibitions on balance billing for emergency services and surprise bills); any other applicable state law requirements on such provider or facility prohibiting out-of-network balancing billing (including any state laws that provide consumer protections that go beyond the NSA); and information on contacting appropriate state and federal agencies in case an individual believes that such provider or facility has violated any state or federal prohibitions on balance billing for emergency services and surprise bills.

    45 C.F.R. § 149.430(c) provides clarification regarding the methods for this disclosure. When posting on the provider’s or facility’s website, the information or link to the information must appear on a searchable homepage of the provider’s or facility’s website. If a provider or facility does not have a website, this requirement does not apply. Additionally, for the information to be publicly available, the provider or facility must include the information on a sign posted prominently at the provider’s or facility’s location. A sign is posted prominently if the sign is posted in a central location, such as where insureds schedule care, check in for appointments, or pay bills. If the provider does not have a publicly accessible location, this requirement does not apply. Lastly, the notice provided to the insured must be a one-page (double-sided) notice, using print no smaller than 12-point font. The provider or facility must provide the notice in person or through postal mail, or if the insured consents, through electronic mail.

    45 C.F.R. § 149.430 also provides clarification regarding the timing for this disclosure. A provider or facility must provide this notice to insureds no later than the date and time on which the provider or facility requests payment from the insured, or for an insured from whom the provider or facility does not request payment, no later than the date on which the provider or facility submits the claim to the insured’s coverage.

    Certain providers are exempt from these notice requirements. Pursuant to 45 C.F.R. § 149.430(e), providers that do not furnish items or services at a facility, or in connection with a visit to a facility, are not required to make this disclosure. Additionally, providers must make the disclosure to insureds to whom they furnish items or services, but only if such items or services are furnished at a facility, or in connection with a visit to a facility. Additionally, providers are reminded that this disclosure is only required for insureds covered by comprehensive health insurance coverage issued by an issuer.

    Providers are further reminded that such disclosure requirements apply beginning on January 1, 2022. To facilitate compliance with such requirements, HHS issued a model disclosure notice regarding patient protections against surprise bills that providers and facilities may use to satisfy the disclosure requirements under 42 U.S.C. § 300gg-133. Additionally, HHS indicated that a state may develop a model notice consistent with 42 U.S.C. § 300gg-133. DFS developed a model notice for providers and facilities to use that incorporates the requirements of 42 U.S.C. § 300gg-133 and state law. Providers and facilities are encouraged to use the state-developed model notice to ensure that they adhere to the requirements of 42 U.S.C. § 300gg-133 and state law.

  2. Issuer Requirements

    NSA § 116 adds a new 42 U.S.C. § 300gg-115(c) that requires issuers to make certain disclosures to patients regarding balance billing protections. Beginning on January 1, 2022, each issuer must make publicly available, post on its public website, and include on each explanation of benefits for claims for emergency services or surprise bills, in clear and understandable language, information on: the requirements and prohibitions under 42 U.S.C. §§ 300gg-131 and 300gg-132 (relating to prohibitions on providers for balance billing for emergency services and surprise bills); the requirements on issuers under 42 U.S.C. § 300gg-111 (relating to protections from bills for emergency services and surprise bills); any other applicable state law on out-of-network balance billing (including any state laws that provide consumer protections that go beyond the NSA); and information on contacting appropriate state and federal agencies in case an individual believes that a provider or facility has violated any state or federal requirements prohibiting balance billing for emergency services and surprise bills.

    DFS regulation 23 NYCRR Part 400 also requires issuers to provide information regarding protections from bills for emergency services and surprise bills. Pursuant to 23 NYCRR § 400.5(a)(3), for bills for emergency services, if the issuer pays less than the non-participating physician’s or hospital’s charges, the issuer must provide the insured with notice, included on or in conjunction with an explanation of benefits, that: (1) explains that the insured will incur no greater out-of-pocket costs for the services than the insured would have incurred with a participating physician or participating hospital; and (2) directs the insured to contact the issuer in the event that the non-participating physician or non-participating hospital bills the insured for the out-of-network services other than the insured’s in-network cost-sharing.

    Additionally, issuers must disclose certain information to insureds regarding surprise bills. Pursuant to 23 NYCRR § 400.5(b)(3), when a claim for a surprise bill is submitted with an assignment of benefits form or the issuer otherwise determines that the claim is for a surprise bill, the issuer must provide the insured with notice, included on or in conjunction with, an explanation of benefits, that: (1) explains that the insured will incur no greater out-of-pocket costs for the services than the insured would have incurred with a participating physician or provider; and (2) directs the insured to contact the issuer in the event that the non-participating physician or non-participating referred provider bills the insured for the out-of-network service other than the insured’s in-network cost-sharing.

    Issuers are reminded that such disclosure requirements under the NSA are applicable for plan years beginning on or after January 1, 2022. To facilitate compliance with the disclosure requirements under the NSA, HHS issued a model disclosure notice regarding patient protections against surprise bills that issuers may use to satisfy the disclosure requirements under 42 U.S.C. § 300gg-115(c). DFS will develop a model notice for issuers, similar to the one developed for providers and facilities, to incorporate the requirements of the NSA and 23 NYCRR § 400.5. Issuers are encouraged to use the state-developed model notice to ensure that they adhere to the requirements of 42 U.S.C. § 300gg-115(c) and 23 NYCRR § 400.5.

VI. Conclusion

Issuers and providers are advised that, beginning on January 1, 2022, New York’s IDR process is expanded to apply to non-participating providers in participating hospitals and ambulatory surgical centers with respect to surprise bills, non-participating providers of emergency services in hospital facilities, safety net hospitals with respect to emergency services, and all CPT codes with respect to emergency services in hospital facilities.

Issuers and providers are advised that an insured’s cost-sharing under the New York IDR process should be calculated based on the issuer’s original payment amount and should not increase in the event an IDR entity determines that the issuer must pay additional amounts for the services rendered. In addition, there may be situations when the insured’s cost-sharing will decrease. Issuers and providers are also reminded that they must hold insureds harmless for bills for emergency services and surprise bills pursuant to requirements in state and federal law.

Issuers and providers are advised that they must hold an insured harmless for any amounts that exceed the insured’s in-network cost-sharing for out-of-network air ambulance services if the insured has coverage for air ambulance services and further that the federal IDR process will apply to such bills for plan years beginning on or after January 1, 2022.

Finally, issuers and providers are advised that they must comply with the disclosure requirements set forth in the NSA and 23 NYCRR § 400.5, as applicable. Issuers and providers are encouraged to use the state-developed model notices to ensure that they adhere to the disclosure requirements of the NSA and 23 NYCRR § 400.5. DFS will be amending the IDR regulation, 23 NYCRR 400, for consistency with the NSA requirements described in 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 NSA § 102 amended 42 U.S.C. § 300gg-19a(b)(2) to define “emergency services” to mean, with respect to an emergency medical condition, a medical screening examination (as required under Social Security Act § 1867) that is within the capability of the emergency department of a hospital or of an independent freestanding emergency department, as applicable, including ancillary services routinely available to the emergency department to evaluate such emergency medical condition; and within the capabilities of the staff and facilities available at the hospital or the independent freestanding emergency department, as applicable, such further medical examination and treatment as are required under Social Security Act § 1867 to stabilize the patient.

2 Financial Services Law § 603(b) defines “emergency services” to mean, “with respect to an emergency condition: (1) a medical screening examination as required under section 1867 of the social security act, 42 U.S.C. § 1395dd, which is within the capability of the emergency department of a hospital, including ancillary services routinely available to the emergency department to evaluate such emergency condition; and (2) within the capabilities of the staff and facilities available at the hospital, such further medical examination and treatment as are required under section 1867 of the social security act, 42 U.S.C. § 1395dd, to stabilize the patient.”

3 Financial Services Law § 603(h) defines a “surprise bill,” in relevant part, as “a bill for health care services, other than emergency services, received by: (1) an insured for services rendered by a non-participating physician at a participating hospital or ambulatory surgical center, where a participating physician is unavailable or a non-participating physician renders services without the insured’s knowledge, or unforeseen medical services arise at the time the health care services are rendered; provided, however that a surprise bill shall not mean a bill received for health care services when a participating physician is available and the insured has elected to obtain services from a non-participating physician; or (2) an insured for services rendered by a non-participating provider, where the services were referred by a participating physician to a non-participating provider without explicit written consent of the insured acknowledging that the participating physician is referring the insured to a non-participating provider and that the referral may result in costs not covered by the health care plan.”

4 The requirements of the NSA do not apply to governmental programs, such as Medicaid managed care, Child Health Plus, and the Essential Plan. However, changes made to the New York IDR process to incorporate the NSA protections will apply to all disputes subject to the New York IDR process under Financial Services Law § 603(a), including those disputes involving Medicaid managed care, Child Health Plus, and the Essential Plan.

5 42 U.S.C. § 300gg-111(a)(3)(G)(i) defines a “nonparticipating provider” to mean, “with respect to an item or service and a group health plan or group or individual health insurance coverage offered by a health insurance issuer, a physician or other health care provider who is acting within the scope of practice of that provider’s license or certification under applicable State law and who does not have a contractual relationship with the plan or issuer, respectively, for furnishing such item or service under the plan or coverage, respectively.”

6 The NSA sets forth limited circumstances when the insured may agree to waive the insured’s protections, as described in sections F and G below. However, the Insurance Law does not provide for a waiver of the protections for emergency services and surprise bills.

7 Financial Services Law § 603(h)(2) also contemplates that an insured may provide explicit written consent to acknowledge that a participating physician is referring the insured to a non-participating provider and that the referral may result in costs not covered by the issuer. However, this provision in the Financial Services Law is not the focus of this paragraph in the circular letter.