OGC Opinion No. 08-06-03

The Office of General Counsel issued the following opinion on June 4, 2008 representing the position of the New York State Insurance Department.

Re: Emergency Department Treatment

Questions Presented:

1. Must an insurer pay an in-network (“participating”) physician who renders service in an emergency room of a hospital 100% of the usual and customary or reasonable (“UCR”) reimbursement?

2. Would the answer be different for an out-of-network (“non-participating”) physician?


1. The reimbursement for a participating physician is governed by the agreement between the health maintenance organization (“HMO”) or insurer and the physician; there is no hard-and-fast rule prescribed by law.

2. The reimbursement for the services of a non-participating physician for emergency services is subject to negotiations between the physician and the HMO or insurer.


The inquiry is of a general nature, without reference to particular facts.


The rate at which an insurer, including an HMO, makes payment on behalf of an insured to a participating health care provider is governed by the contract between the insurer and the health care provider. Such contracts involving insurers licensed pursuant to Articles 42 or 43 of the New York Insurance Law (McKinney 2007) are not reviewed by either the New York State Insurance Department or the New York State Department of Health. Contracts involving HMOs having a certificate of authority pursuant to New York Public Health Law Article 44 are reviewed by the Department of Health.

Where an insurer, including an HMO, covers the services of a non-participating health care provider, the measure of the insurer’s obligation must be set out in the policy or contract. Many insurers denominate the obligation in terms of UCR. The Insurance Department requires that the methodology for UCR calculations, including the universe of data and its source, be specified in the policy or contract. See Opinion of the Office of General Counsel dated June 21, 2005.

While the payments to a participating health care provider for a particular procedure may bear some arithmetic relationship to the reimbursement to the insured for the services of a non-participating health care provider on the basis of UCR, there is no requirement prescribed by law that the amount paid to a participating provider for services, including services in an emergency department, bear any specific relationship to payments to a non-participating provider.

The regulation of hospitals, and how they bill, is performed by the Department of Health. Based on discussions with the Department of Health, the Insurance Department understands that an HMO has an obligation to negotiate a payment to the hospital or health care professional, or pay the HMO subscriber an amount whereby the subscriber has no further financial obligation for emergency services (other than any co-payment obligation prescribed by the subscriber’s contract). However, the same “hold harmless” requirements are not applicable to persons covered under a non-HMO policy or contact.

For further information you may contact Principal Attorney Alan Rachlin at the New York City office.