BILL NUMBER: S7919
SPONSOR: SKOUFIS
 
TITLE OF BILL:
An act to amend the insurance law and the public health law, in relation
to third-party network contracts
 
PURPOSE:
To require dental insurers to take specific measures before leasing
networks to third parties, including notifying in-network dental provid-
ers of intent to lease provider networks to a third party and securing
written consent of the provider prior to doing so.
 
SUMMARY OF PROVISIONS:
Section 1: Amends the insurance law by adding a new section 3217-k to
regulate how dental insurers may involve third parties in provider
network contracts. It permits third-party access to providers' services
and discounted rates only if the provider consents at contract initi-
ation, renewal, or upon material changes. It allows providers to opt for
direct contracts with third parties. Third parties must adhere to the
original contract's terms. Insurers cannot terminate a provider for
refusing third-party access. Insurers must disclose all third-party
access relationships, maintain an updated list online, identify discount
sources on payments, and notify providers of new third-party contracts
and terminations. Providers must consent to changes, and third-party
access ends with contract termination. The law prohibits waiving these
notice requirements in any policy issued or amended after the law's
effective date.
Section 2: Amends the insurance law by adding a new section 4242 to
permit dental insurers to grant third-party access to provider services
and rates only with the provider's consent at contract start, renewal,
or material changes. Providers must be allowed to contract directly with
third parties, and third parties must comply with all original contract
terms. Insurers must disclose third-party arrangements, maintain an
updated online list, give advance notice, and obtain provider approval
for new agreements. Third-party access ends when the provider contract
ends, and notice requirements cannot be waived in any policy issued
after the law takes effect.
Section 3: Amends the insurance law by adding a new section 4325-a to
allow corporations to enter third-party dental network contracts only
with the provider's consent at contract start, renewal, or material
changes, and mandates that third parties follow the original contract's
terms. Providers must be allowed to contract directly with third
parties, and cannot be dropped for refusing third-party access. Corpo-
rations must disclose all third-party arrangements, maintain an updated
online list, give timely notices, and secure provider consent for new
agreements. Third party access ends when the provider contract ends, and
policies cannot waive these notice requirements after the law takes
effect.
Section 4: Amends the public health law by adding a new section 4406-j
to outline that a health care plan may enter into third-party network
contracts only if the provider consents at the time of the original
contract, renewal, or material changes, and the third party agrees to
follow all contract terms. Providers must be allowed to contract direct-
ly with third parties, and cannot be terminated for refusing third-party
access. The health care plan must provide written and electronic notice
of all third-party relationships, maintain an updated online list, iden-
tify the source of discounts on payment documents, and give timely
notice of new or ending third-party agreements. Providers must consent
to new third-party contracts, third-party access ends when the provider
contract is terminated, and no policies issued after the law's effective
date may waive these notice requirements.
Section 5: Sets effective date.
 
JUSTIFICATION:
Network leasing occurs when a dental benefits company allows a third
party-often another insurer or administrator-to access its network of
providers. This means a dentist who signed a contract with the original
dental benefits company may unknowingly be treated as "in-network" by
third parties they never agreed to work with, subjecting them to unfa-
miliar fees and policies. This lack of transparency can be especially
frustrating for dentists, who often don't learn of these third-party
affiliations until after a claim is processed. This bill seeks to
improve transparency and fairness in network leasing by requiring that
providers be notified in advance of any proposed leasing arrangements,
given the option to opt out or contract directly with the third party,
and protected from retaliation by insurers for exercising these rights.
 
LEGISLATIVE HISTORY:
New Bill.
 
FISCAL IMPLICATIONS:
None.
 
EFFECTIVE DATE:
This act shall take effect immediately and shall apply to policies and
contracts issued, renewed, amended, modified, or altered on or after
such date.