The Office of General Counsel issued the following informal opinion on September 20, 2001, representing the position of the New York State Insurance Department.
Re: "Stale Claims"
Question Presented:
Are the requirements of N.Y. Ins. Law § 3224-a (McKinney 2000) applicable if a claim is being denied because it is submitted beyond a certain time period after the date of service ("stale claim")?
Conclusion:
Yes. The language and intent of N.Y. Ins. Law § 3224-a support that result.
Facts:
Providers are notified of a health plans stale claim policy, which requires providers to submit claims within a defined period of time from the date of service. A claim that is submitted past that time will be denied. It is asserted that the issuance of such a denial is not governed by N.Y. Ins. Law § 3224-a (McKinney 2000) and, consequently, is not subject to the time requirements in that section.
Analysis:
N.Y. Ins. Law § 3224-a (McKinney 2000) provides:
In the processing of all health care claims submitted under contracts or agreements issued or entered into pursuant to articles thirty-two, forty-two and forty-three of this chapter and article forty-four of the public health law and all bills for health care services rendered by health care providers pursuant to such contracts or agreements, any insurer or organization or corporation licensed or certified pursuant to article forty-three of this chapter or article forty-four of the public health law shall adhere to the following standards:
(a) Except in a case where the obligation of an insurer or an organization or corporation licensed or certified pursuant to article forty-three of this chapter or article forty-four of the public health law to pay a claim submitted by a policyholder or person covered under such policy or make a payment to a health care provider is not reasonable clear, or when there is a reasonable basis supported by specific information available for review by the superintendent that such claim or bill for health care services rendered was submitted fraudulently, such insurer or organization or corporation shall pay the claim to a policyholder or covered person or make a payment to a health care provider within forty-five days of receipt of a claim or bill for services rendered.
(b) In the case where the obligation of an insurer or an organization or corporation licensed or certified pursuant to article forty-three of this chapter or article forty-four of the public health law to pay a claim or make a payment for health care services rendered is not reasonably clear due to a good faith dispute regarding the eligibility of the person for coverage, the liability of another insurer or corporation or organization for all or part of the claim, the amount of the claim, the benefits covered under a contract or agreement, or the manner in which services were accessed or provided, an insurer or organization or corporation shall pay any undisputed portion of the claim in accordance with this subsection and notify the policyholder, covered person or health care provider in writing within thirty calendar days of the receipt of the claim:
(1) that it is not obligated to pay the claim or make the medical payment, stating the specific reasons why it is not liable; or
(2) to request all additional information needed to determine liability to pay the claim or make the health care payment.
In accordance with the above, insurers and health maintenance organizations are required to make payment within 45 days of receipt of the claim, except in cases where the obligation to make payment is not reasonably clear, or where there is a reasonable basis supported by evidence that the claim has been submitted fraudulently. In cases where the obligation to make payment is questionable, the statute requires the insurer or health maintenance organization to pay any undisputed portion of such claims within the 45 day time frame and notify the insured or provider within 30 calendar days that either: (1) an obligation to pay does not exist or (2) additional information is necessary to determine liability.
The inquirer stated that with respect to stale claims, "while there is a good faith dispute regarding payment, it does not appear to require § 3224-a(b) notice to the provider because it does not involve any of the five statutory reasons for denial listed in § 3224-a(b)." This assertion, that there are certain claims that fall outside the scope of the statute and, with respect to these claims, insurers and HMOs are not governed by the statutory timeframes, is inconsistent with both the statutory language and the legislative history.
The introductory language in N.Y. Ins. Law § 3224-a states that insurers and HMOs must adhere to the statutory standards for "all health care claims and all bills for health care services ." This makes it clear that a bill or a claim is subject to either N.Y. Ins. Law §§ 3224-a(a) or 3224-a(b) (McKinney 2000) and that the applicable timeframe must be complied with. Thus, if the health plan takes the position that, in the case of a stale claim, there is a good faith dispute, the health plan, in accordance with N.Y. Ins. Law § 3224-a(b)(1) (McKinney 2000), must, within thirty calendar days of the receipt of the claim, notify the provider that it is not obligated to make the payment, stating the specific reasons why it is not liable.
There is nothing in the legislative history to suggest that there are exceptions to the reach of this amendment. The Memorandum that was filed with Senate Bill Numbers 453-D and 5770 (N.Y. 1997) stated that the purpose of the bills was to "amend the Insurance Law to set standards for the prompt, fair and equitable settlement of claims for health care services" and makes no mention of any exceptions.
For further information you may contact Supervising Attorney Joan Siegel at the New York City Office.