BILL NUMBER: S8747
SPONSOR: ADDABBO
 
TITLE OF BILL:
An act to amend the insurance law, in relation to health insurance
coverage of physical and occupational therapy services
 
PURPOSE:
To improve access to occupational therapy and physical therapy services
by eliminating excessive copayments for therapy visits.
 
SUMMARY OF PROVISIONS:
Section 1. amends paragraph 23 of subsection (i) of section 3216 of the
insurance law and states that If a policy provides for reimbursement for
physical and occupational therapy services, the terms of such policy
shall not impose co-payments in excess of twenty percent of the total
reimbursement to the provider of care.
Section 2. amends clause (ii) of subparagraph (A) of paragraph 1 of
subsection f of section 4235 of the insurance law and provides that no
policy of group accident, group health or group accident and health
insurance shall impose co-payments in excess of twenty percent of the
total reimbursement to the provider of care.
Section 3. Subparagraph (A) of paragraph 4 of subsection (f) of section
4235 of the insurance law and provides that no policy of group accident,
group health or group accident and health insurance shall impose co-pay-
ments in excess of twenty percent of the total reimbursement to the
provider of care. Section 4. amends subparagraph (G) of paragraph 1 of
subsection (b) of section 4301 of the insurance law and provides that
co-payments related to reimbursement for such services shall not exceed
twenty percent of the total reimbursement to the provider of care.
Section 5. amends paragraph 13 of subsection (b) of section 4322 of the
insurance law and provides that any co-payments related to reimbursement
for physical therapy services shall not exceed twenty percent of the
total reimbursement to the provider of care.
Section 6. provides that this act shall take effect on the one hundred
eightieth day after it shall have become a law.
 
JUSTIFICATION:
Copayments, or copays, are a common form of cost sharing under many
health insurance plans. The concept of cost-sharing as part of health-
care was originally designed by a group of providers and hospitals
during the Great Depression. These conglomerations set not-for-profit
subscription fees to ensure families and communities could continue to
receive needed care. Over time, as care extended within these communi-
ties, costs continued to rise. A push emerged for private plans that
established their own cost-sharing measures. Today health insurance
plans have two incentives for imposing copayments. One is to prevent
members of the plan from seeking care that is not necessary. The second
incentive is financial, to keep their costs low and pass on as much of
the expense as possible to the member. While copayments can be effective
in reducing health care spending, studies also find that plan members
with low-income, chronic conditions, or disabling conditions will demon-
strate a decrement in access to medically necessary care.
Patients receiving occupational therapy and, or physical therapy
services at an outpatient setting are likely to require treatment two to
three times a week over the course of 5 to 10 weeks. With this type of
treatment schedule a large copayment per session becomes an extreme
financial burden for the patient and their family. Therapists seeing
copays of Up to 80 to 100% of the total reimbursement amount. For many
patients this financial burden comes at a time when they are not working
and have other health care related costs. This burden often leads
patients to cancel treatment sessions, or, dropout of treatment and
prematurely abandoning efforts at recovery.
Excessive copayments essentially defeats the purpose of health insur-
ance, to provide the public with affordable access to health care.
Limiting health insurance copayments provides the insured with the
protection they need to access medically necessary care.
 
PRIOR LEGISLATIVE HISTORY:
A new bill
 
FISCAL IMPLICATIONS:
None.
 
EFFECTIVE DATE:
This act shall take effect on the one hundred eightieth day after it
shall have become a law.

Statutes affected:
S8747: 3216 insurance law, 3216(i) insurance law, 4322 insurance law, 4322(b) insurance law