BILL NUMBER: S9621
SPONSOR: COONEY
TITLE OF BILL:
An act to amend the insurance law and the public health law, in relation
to the use of virtual credit cards by insurers and certain health care
plans
SUMMARY OF PROVISIONS;
Section 1. Amends Section 3217-b of the insurance law to require that an
insurer seeking to pay a provider using a credit card, virtual credit
card, or EFT that imposes a fee or similar charge on the provider to
process the payment must first (1) notify the provider of the potential
fees or charges, (2) offer the provider an alternative payment method
that does not impose fees or charges, and (3) allow the provider or a
designee to elect to accept such payment type. Further, this section
establishes that an election to accept or not accept a specific type of
payment shall remain in effect until it is changed, requires contracted
vendors to adhere to these provisions, prohibits a waiver of this
section in new contracts, and requires an insurance carrier to seek
permission to charge a fee solely to transmit a payment to a provider.
The section also defines provider and virtual credit card for purposes
of this section of law.
Section 2. Creates a new Section 4242 of the Insurance Law to include
the same provisions as section 1.
Section 3. Amends section 4325 of the Insurance Law to include the same
provisions as section 1.
Section 4. Amends section 4406-C of the Public Health Law to include the
same provisions as section 1.
Section 5. Establishes an effective date.
JUSTIFICATION:
As alternative payment methods increase, provider choice in payment
method decreases. Payment types such as virtual credit cards may apply
higher processing fees than those agreed upon for regular credit cards
under insurer-provider contracts. As a result, providers are left to
deal with bank charges and other fees levied to counter the evolving
software and security needs for new payment types. Unless insurers are
required to seek permission, they often begin paying providers using
costly alternative payment types without providing any notice.
To increase transparency and provider choice, this legislation would
require insurers give appropriate notice and allow providers to elect to
utilize an alternative payment method for claims.
LEGISLATIVE HISTORY:
New bill.
FISCAL IMPLICATIONS:
None.
EFFECTIVE DATE:
This act shall take effect immediately and shall apply to policies and
contracts issued, renewed, modified, altered or amended on and after
such date
Statutes affected:
S9621: 3217-b insurance law, 4325 insurance law, 4406-c public health law