BILL NUMBER: S5319
SPONSOR: BAILEY
 
TITLE OF BILL:
An act to amend the insurance law and the public health law, in relation
to required terms for certain insurance contracts
 
PURPOSE OR GENERAL IDEA OF BILL:
This bill requires insurers and HMOs to include basic provisions in
their contracts with health care providers that will offer providers
more clarity and reliability concerning reimbursement issues.
 
SUMMARY OF PROVISIONS:
This bill would require insurers and HMOs to include in their provider
contracts a description that the date of service, patient identification
number, identification number of the service and the reimbursement paid
by the insurer will be relied upon to calculate reimbursements. This
bill also requires insurers to include in contracts the permissible
payment methods used to reimburse the providers without any associated
charges or fees, requires the insurer to receive consent in advance from
the provider to utilize a certain method of payment, and requires the
insurer to annually provide the provider with an updated payment rate
schedule.
 
JUSTIFICATION:
Medical and dental practices are small businesses. Like other small
businesses, they must track revenues and expenses to make crucial deci-
sions concerning personnel management and overhead costs. Under current
law, there is a frequent lack of clarity and reliability in
insurer/provider relations. Standard contracts are not required to
include provisions that obligate insurers to notify providers annually
of the applicable reimbursement rate schedule, do not require insurers
to provide information that connects a particular payment to particular
services rendered, and do not mandate insurers to bear the cost of tran-
saction fees and other charges associated with the payment method used
to reimburse a provider. Such contractual ambiguities, paired with the
position of strength from which insurers typically negotiate provider
contracts, hobble health care providers when seeking to effectively
manage their businesses.
By requiring insurers to include certain basic contract provisions that
give network providers valuable information, this bill will support
these small businesses in caring for their patients while also helping
them to survive and thrive in the communities they serve.
 
PRIOR LEGISLATIVE HISTORY:
2023-24: S8414A - Referred to Insurance
 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
None.
 
EFFECTIVE DATE:
This act shall take effect on the thirtieth day after it shall have
become a law and shall apply to all contracts entered into, renewed,
modified or amended on or after such effective date.

Statutes affected:
S5319: 3217-b insurance law, 3217-b(e) insurance law, 4325 insurance law, 4325(e) insurance law, 4406-c public health law, 4406-c(5-a) public health law