In response to recent investigations of reimbursements of out-of-network treatment, New York Governor Paterson announced a proposed regulation that will require health and accident insurers, including health maintenance organizations (collectively, “insurers”), to inform insureds as to the actual reimbursement amount for out-of-network treatment before receiving such treatment. The proposed regulation will govern all insurers that promise to reimburse insureds who go out-of-network based on the “usual and customary” charge for the service provided.
The proposed regulation requires that insurers create a Usual and Customary or Reasonable Charges and Fees Schedule (“UCR schedule”) for reimbursements of out-of-network treatment. To ensure fairness and accuracy of the reimbursement, the proposed regulation will require that insurers use an independent source for determining the usual and customary rate. In addition, the insurer must:
- make certain that the UCR schedule fairly and accurately reflects market rates, by using (i) geographic differences in cost, (ii) a representative and statistically valid sample of charge data for the same or comparable service and type of provider, (iii) credible methodology and data, (iv) input from a diverse group of relevant companies and independent researchers, and (v) periodic updates to reflect changes in health care provider charges;
- disclose the specific amount of reimbursement for a particular procedure or treatment within three business days of a request by one of its members or subscribers;
post a copy of the UCR schedule of reimbursement on a website accessible to its members and subscribers; - prominently disclose in its written materials (both to insureds and the New York Insurance Department (“NYID”)) (i) its method of determining usual and customary rate, (ii) its source of data, and (iii) the name of the entity it relies upon to calculate the usual and customary rate; and
- explain the financial impact of receiving out-of-network treatment, including responsibility for payments of balances and cost sharing amounts.
In announcing the proposed regulation, Governor Paterson stated, “For too long, health insurers have not fairly represented the coverage amounts they will pay for out-of-network medical services. These reforms will make sure consumers can make informed decisions about health care knowing beforehand what it will cost them.” Governor Paterson and the NYID believe that requiring insurers to use independent sources for establishing usual and customary rates and increasing transparency in the reimbursement process will ensure fairness and accuracy in the consumer reimbursement system.
The NYID will seek public comment before the regulation is adopted.
