Financial Services Superintendent Maria T. Vullo today announced that the Department of Financial Services (DFS) has finalized a new regulation to limit the amount that insurers can reimburse for healthcare services performed outside of New York State under its no-fault insurance law.  This regulation follows from DFS’s learning that certain providers have assumed a practice of charging the prevailing fee, or more, in their geographical location outside of New York, which exceeds New York limits and is believed to lead to inflated claims, depleted coverage, increased litigation and higher premiums.  In addition, New York residents eligible for no-fault benefits for their physical injuries often are influenced to seek healthcare services from non-New York providers that engage in such practice.  The new regulation clarifies the intent of the current law and aims to eliminate this practice and its resulting disadvantage to consumers.

“New York’s no-fault insurance law will not be abused by out-of-state providers charging excessive rates.  Under this final regulation, there are limits on the amounts insurers in New York State will be allowed to reimburse,” said Superintendent Vullo.  “By limiting the amounts reimbursable under no-fault law to New York parameters, the regulation eliminates abuses and ensures that policy limit amounts will provide for necessary policyholder benefits and lost wages, while leveling the playing field for New York insurers.”

No-fault insurance provides for reimbursement of medical expenses and lost wages for a policyholder injured in an automobile accident regardless of who is at fault.  Under the final regulation, when a professional healthcare service reimbursable under the no-fault law is performed outside of New York to an injured person who is a New York resident, the amount that the insurer can reimburse for the service is the fee applicable in the New York region that has the highest value in the no-fault fee schedule for such service.  In addition, an insurer may not reimburse an amount that exceeds the amount that the provider is legally permitted to charge for a service under the laws of the jurisdiction where the services are provided.

The new rule adopted by DFS today takes into consideration comments that were submitted during a 45-day comment period for the proposed regulation published in May 2017.

A copy of the final regulation can be found here.