New York Laws
Article 32 - Insurance Contracts - Life, Accident and Health, Annuities
3224-A - Standards for Prompt, Fair and Equitable Settlement of Claims for Health Care and Payments for Health Care Services.

(a) Except in a case where the obligation of an insurer or an
organization or corporation licensed or certified pursuant to article
forty-three or forty-seven 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 ("covered person") or make a payment to a
health care provider is not reasonably 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 thirty days of receipt
of a claim or bill for services rendered that is transmitted via the
internet or electronic mail, or forty-five days of receipt of a claim or
bill for services rendered that is submitted by other means, such as
paper or facsimile.
(b) In a case where the obligation of an insurer or an organization or
corporation licensed or certified pursuant to article forty-three or
forty-seven 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 a 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, and through the
internet or other electronic means for claims submitted in that manner,
within thirty calendar days of the receipt of the claim:
(1) whether the claim or bill has been denied or partially approved;
(2) which claim or medical payment that it is not obligated to pay
stating the specific reasons why it is not liable; and
(3) to request all additional information needed to determine
liability to pay the claim or make the health care payment; and
(4) of the specific type of plan or product the policyholder or
covered person is enrolled in; provided that nothing in this section
shall authorize discrimination based on the source of payment.
Upon receipt of the information requested in paragraph three of this
subsection or an appeal of a claim or bill for health care services
denied pursuant to this subsection, an insurer or organization or
corporation licensed or certified pursuant to article forty-three or
forty-seven of this chapter or article forty-four of the public health
law shall comply with subsection (a) of this section; provided, that if
the insurer or organization or corporation licensed or certified
pursuant to article forty-three or forty-seven of this chapter or
article forty-four of the public health law determines that payment or
additional payment is due on the claim, such payment shall be made to

the policyholder or covered person or health care provider within
fifteen days of the determination. Any denial or partial approval of
claim or payment and the specific reasons for such denial or partial
approval pursuant to this subsection shall be prominently displayed on a
written notice with at least twelve-point type. A partial approval of
claim or payment shall state at the top of such written notice with at
least fourteen-point type bold: "NOTICE OF PARTIAL APPROVAL OF MEDICAL
COVERAGE". A denial of claim or payment shall state at the top of such
written notice with at least fourteen-point type bold: "NOTICE OF DENIAL
OF MEDICAL COVERAGE". Any additional terms or conditions included on
such notice of partial approval or such notice of denial, such as but
not limited to time restraints to file an appeal, shall be included with
at least twelve-point type.
(c) (1) Except as provided in paragraph two of this subsection, each
claim or bill for health care services processed in violation of this
section shall constitute a separate violation. In addition to the
penalties provided in this chapter, any insurer or organization or
corporation that fails to adhere to the standards contained in this
section shall be obligated to pay to the health care provider or person
submitting the claim, in full settlement of the claim or bill for health
care services, the amount of the claim or health care payment plus
interest on the amount of such claim or health care payment of the
greater of the rate equal to the rate set by the commissioner of
taxation and finance for corporate taxes pursuant to paragraph one of
subsection (e) of section one thousand ninety-six of the tax law or
twelve percent per annum, to be computed from the date the claim or
health care payment was required to be made. When the amount of interest
due on such a claim is less then two dollars, and insurer or
organization or corporation shall not be required to pay interest on
such claim.
(2) Where a violation of this section is determined by the
superintendent as a result of the superintendent's own investigation,
examination, audit or inquiry, an insurer or organization or corporation
licensed or certified pursuant to article forty-three or forty-seven of
this chapter or article forty-four of the public health law shall not be
subject to a civil penalty prescribed in paragraph one of this
subsection, if the superintendent determines that the insurer or
organization or corporation has otherwise processed at least
ninety-eight percent of the claims submitted in a calendar year in
compliance with this section; provided, however, nothing in this
paragraph shall limit, preclude or exempt an insurer or organization or
corporation from payment of a claim and payment of interest pursuant to
this section. This paragraph shall not apply to violations of this
section determined by the superintendent resulting from individual
complaints submitted to the superintendent by health care providers or
policyholders.
(d) For the purposes of this section:
(1) "policyholder" shall mean a person covered under such policy or a
representative designated by such person;
(2) "health care provider" shall mean an entity licensed or certified
pursuant to article twenty-eight, thirty-six or forty of the public
health law, a facility licensed pursuant to article nineteen or
thirty-one of the mental hygiene law, a fiscal intermediary operating
under section three hundred sixty-five of the social services law, a
health care professional licensed, registered or certified pursuant to
title eight of the education law, a dispenser or provider of
pharmaceutical products, services or durable medical equipment, or a
representative designated by such entity or person;
(3) "plan or product" shall mean:
(i) Medicaid coverage provided pursuant to section three hundred
sixty-four-j of the social services law;
(ii) a child health insurance plan certified pursuant to section
twenty-five hundred eleven of the public health law;
(iii) basic health program coverage certified pursuant to section
three hundred sixty-nine-gg of the social services law, including the
specific rating group the policyholder or covered person is enrolled in;
(iv) coverage purchased on the New York insurance exchange established
pursuant to section two hundred sixty-eight-b of the public health law;
and
(v) any other comprehensive health insurance coverage subject to
article thirty-two, forty-three, or forty-seven of this chapter, or
article forty-four of the public health law; and
(4) "emergency services" shall have the meaning set forth in
subparagraph (D) of paragraph nine of subsection (i) of section three
thousand two hundred sixteen of this article, subparagraph (D) of
paragraph four of subsection (k) of section three thousand two hundred
twenty-one of this article and subparagraph (D) of paragraph two of
subsection (a) of section four thousand three hundred three of this
chapter.
(e) Nothing in this section shall in any way be deemed to impair any
right available to the state to adjust the timing of its payments for
medical assistance pursuant to title eleven of article five of the
social services law, or for child health insurance plan benefits
pursuant to title one-a of article twenty-five of the public health law
or otherwise be deemed to require adjustment of payments by the state
for such medical assistance or child health insurance.
(f) In any action brought by the superintendent pursuant to this
section or article twenty-four of this chapter relating to this section
regarding payments for medical assistance pursuant to title eleven of
article five of the social services law, child health insurance plan
benefits pursuant to title one-a of article twenty-five of the public
health law, benefits under the voucher insurance program pursuant to
section one thousand one hundred twenty-one of this chapter, and
benefits under the New York state small business health insurance
partnership program pursuant to article nine-A of the public health law,
it shall be a mitigating factor that the insurer, corporation or
organization is owed any premium amounts, premium adjustments, stop-loss
recoveries or other payments from the state or one of its fiscal
intermediaries under any such program.
(g) Time period for submission of claims. (1) Except as otherwise
provided by law, health care claims must be initially submitted by
health care providers within one hundred twenty days after the date of
service to be valid and enforceable against an insurer or organization
or corporation licensed or certified pursuant to article forty-three or
article forty-seven of this chapter or article forty-four of the public
health law. Provided, however, that nothing in this subsection shall
preclude the parties from agreeing to a time period or other terms which
are more favorable to the health care provider. Provided further that,
in connection with contracts between organizations or corporations
licensed or certified pursuant to article forty-three of this chapter or
article forty-four of the public health law and health care providers
for the provision of services pursuant to section three hundred
sixty-four-j or three hundred sixty-nine-ee of the social services law
or title I-A of article twenty-five of the public health law, nothing
herein shall be deemed: (i) to preclude the parties from agreeing to a
different time period but in no event less than ninety days; or (ii) to

supersede contract provisions in existence at the time this subsection
takes effect except to the extent that such contracts impose a time
period of less than ninety days.
(2) This subsection shall not abrogate any right or reduce or limit
any additional time period for claim submission provided by law or
regulation specifically applicable to coordination of benefits in effect
prior to the effective date of this subsection.
(h) (1) An insurer or organization or corporation licensed or
certified pursuant to article forty-three or article forty-seven of this
chapter or article forty-four of the public health law shall permit a
participating health care provider to request reconsideration of a claim
that is denied exclusively because it was untimely submitted pursuant to
subsection (g) of this section. The insurer or organization or
corporation shall pay such claim pursuant to the provisions of paragraph
two of this subsection if the health care provider can demonstrate both
that: (i) the health care provider's non-compliance was a result of an
unusual occurrence; and (ii) the health care provider has a pattern or
practice of timely submitting claims in compliance with subdivision (g)
of this section.
(2) An insurer or organization or corporation licensed or certified
pursuant to article forty-three or article forty-seven of this chapter
or article forty-four of the public health law may reduce the
reimbursement due to a health care provider for an untimely claim that
otherwise meets the requirements of paragraph one of this subsection by
an amount not to exceed twenty-five percent of the amount that would
have been paid had the claim been submitted in a timely manner;
provided, however, that nothing in this subsection shall preclude a
health care provider and an insurer or organization or corporation from
agreeing to a lesser reduction. The provisions of this subsection shall
not apply to any claim submitted three hundred sixty-five days after the
date of service, in which case the insurer or organization or
corporation may deny the claim in full.
(i) Except where the parties have developed a mutually agreed upon
process for the reconciliation of coding disputes that includes a review
of submitted medical records to ascertain the correct coding for
payment, a general hospital certified pursuant to article twenty-eight
of the public health law shall, upon receipt of payment of a claim for
which payment has been adjusted based on a particular coding to a
patient including the assignment of diagnosis and procedure, have the
opportunity to submit the affected claim with medical records supporting
the hospital's initial coding of the claim within thirty days of receipt
of payment. Upon receipt of such medical records, an insurer or an
organization or corporation licensed or certified pursuant to article
forty-three or forty-seven of this chapter or article forty-four of the
public health law shall review such information to ascertain the correct
coding for payment based on national coding guidelines accepted by the
centers for Medicare and Medicaid services or the American medical
association, to the extent there are codes for such services, including
ICD-10 guidelines to the extent available, and process the claim,
including the correct coding, in accordance with the timeframes set
forth in subsection (a) of this section. In the event the insurer,
organization, or corporation processes the claim consistent with its
initial determination, such decision shall be accompanied by a statement
of the insurer, organization or corporation setting forth the specific
reasons why the initial adjustment was appropriate. An insurer,
organization, or corporation that increases the payment based on the
information submitted by the general hospital, shall pay to the general
hospital interest on the amount of such increase at the rate set by the

commissioner of taxation and finance for corporate taxes pursuant to
paragraph one of subsection (e) of section one thousand ninety-six of
the tax law, to be computed from the date thirty days after initial
receipt of the claim if transmitted electronically or forty-five days
after initial receipt of the claim if transmitted by paper or facsimile.
Provided, however, a failure to remit timely payment shall not
constitute a violation of this section. Neither the initial or
subsequent processing of the claim by the insurer, organization, or
corporation shall be deemed an adverse determination as defined in
section four thousand nine hundred of this chapter if based solely on a
coding determination. Nothing in this subsection shall apply to those
instances in which the insurer or organization, or corporation has a
reasonable suspicion of fraud or abuse or when an insurer, organization,
or corporation engages in reasonable fraud, waste and abuse detection
efforts; provided, however, to the extent any subsequent payment
adjustments are made as a result of the fraud, waste and abuse detection
processes or efforts, such payment adjustments shall be consistent on
the coding guidelines required by this subsection.
(j) An insurer or an organization or corporation licensed or certified
pursuant to article forty-three or forty-seven of this chapter or
article forty-four of the public health law or a student health plan
established or maintained pursuant to section one thousand one hundred
twenty-four of this chapter shall accept claims submitted by a
policyholder or covered person, in writing, including through the
internet, by electronic mail or by facsimile.
(k) The superintendent, in conjunction with the commissioner of
health, shall convene a health care administrative simplification
workgroup. The workgroup shall consist of stakeholders, including but
not limited to, insurers, hospitals, physicians and consumers or their
representatives, to study and evaluate mechanisms to reduce health care
administrative costs and complexities through standardization,
simplification and technology. Areas to be examined by the workgroup
shall include claims submission and payment, claims attachments,
preauthorization practices, provider credentialing, insurance
eligibility verification, and access to electronic medical records. The
workgroup shall report on its findings and recommendations to the
superintendent, the commissioner of health, the speaker of the assembly
and the temporary president of the senate within eighteen months of the
effective date of this subsection.

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