Effective January 1, 2020, the New York State Department of Financial Services (“DFS”) expanded the independent dispute resolution (“IDR”) process for surprise bills and bills for out-of-network (“OON”) emergency to include hospital services. The new IDR process is codified at Financial Services Law § 605.
Although implementation was delayed due to COVID 19, the expanded IDR process applies to emergency hospital services provided on or after January 1, 2020. Eligible hospital services include hospital admissions from the emergency room through the date of discharge.
Payment for Out of Network Emergency Hospital Services May Depend on Prior Participation Agreement.
The expanded IDR process defines how payment for the OON emergency services for a hospital is determined once a patient assigns their benefits to the non-participating hospital. Payment is based on the contractual history between the health care plan and the hospital. If the health care plan and hospital have not previously entered into a participating provider agreement, the health care plan must pay an amount that is determined to be ‘reasonable’ for the services rendered. The criteria the IDR entity should consider in determining ‘reasonableness’ is codified at Financial Services Law § 604.
If the hospital and health care plan have previously entered into a participating provider agreement, the payment made to hospital must be 25% greater than the in-network amount from the previous agreement between the parties. If such agreement expired greater than a year before, the previous in-network rate under the agreement must be adjusted by the medical consumer price index for each year plus the 25% increase. If hospital is participating with other products offered by the health care plan, the dispute can still be submitted to IDR and health plan should pay the ‘reasonable’ amount.
Expanded IDR Process Does Not Apply during Cooling Off or to Safety Net Hospitals.
If the hospital and the health care plan recently terminated their agreement and are still in the statutorily prescribed cooling off period, the services are not eligible for IDR. The new IDR process does not apply to safety net hospitals (hospitals whose inpatient discharged annually consists of at least 60% of Medicaid, uninsured and dual-eligible individuals) as determined by the New York State Department of Health (“DOH”). DFS uses the DOH list of safety net hospitals in effect on the date services were provided.
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DFS has also developed an assignment of benefits form for hospitals to use, available here. Use of this form is not required by DFS at this time but is strongly encouraged. To initiate the IDR process, hospitals and insurers must use this DFS application and follow the Hospital IDR processes. Patients who wish to submit to IDR must use a different application, available here.
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