The New York State Department of Financial Services ("DFS") has issued a new report on New York's out-of-network law, which seeks to protect consumers from emergency and surprise bills from out-of-network ("OON") doctors and other healthcare providers.
According to the DFS, the law, has saved New Yorkers more than $400 million with respect to emergency services alone.
"New York has made extraordinary progress when it comes to enforcing fairness in healthcare costs," Governor Andrew M. Cuomo said in a statement. "These findings show how the out-of-network law has been effective in protecting patients and making it clear to everyone that getting the care New Yorkers need is a right, not a luxury."
"We are taking action to ensure consumers are not hit with unexpected medical bills from out-of-network providers," added Lieutenant Governor Kathy Hochul. "The out-of-network law is helping to make sure all New Yorkers have access to affordable, quality health care coverage because health care is a human right. This law is part of our continuing efforts to protect individuals and families and ensure fair and equal health care costs across the state."
The DFS superintendent, Linda A. Lacewell, said, "Surprise medical bills have been a huge burden that can stress consumers' finances, literally causing some people to go broke. Our review shows that the law is making a major difference in helping New Yorkers receive the healthcare they deserve without the unnecessary shock and onerous cost of surprise bills and the stress of having to enter disputes themselves."
Under the OON law, signed by Governor Cuomo in March 2014, consumers are taken out of disputes over out-of-network emergency and surprise bills, and health plans and providers can use an independent dispute resolution ("IDR") process to resolve such billing disputes. Consumers are held harmless under the OON law, which includes other consumer protections including protection from surprise bills, improved disclosure, extended network adequacy requirements, minimum OON coverage to be made available to consumers, expanded external appeal rights, and easier claims submission.
According to the DFS, since the law was implemented in 2015, the DFS has seen a steady increase in the number of IDR requests filed through its website, as well as decisions on those requests.
Providers, health plans, and certain consumers may submit a dispute to an IDR entity ("IDRE") through a portal on the DFS website. In the IDR process, a paper review is conducted, and decisions are rendered, on disputes involving bills for emergency physician services or surprise bills. IDR requests are submitted to the DFS and assigned to IDR entities certified by the DFS for review. The IDR entity makes a determination as to whether the provider's fee or the health plan's payment is more reasonable, based upon the last best offer of each party.
The DFS report found that between 2015 and 2018, a total of 2,595 decisions were rendered, and the number has been steadily increasing, from 149 in 2015 to 1,148 in 2018. The law has saved consumers over $400 million from its March 2015 implementation through the end of 2018, in part through a reduction in costs associated with emergency services and an increased incentive for network participation, according to the DFS.
Consumers in need of emergency services typically are unable to choose the physician that provides the services. In addition, even when a consumer receives emergency services at an in-network hospital, the physician may not necessarily be in-network.
The DFS explained that, by establishing an IDR process for out-of-network emergency services, the OON law reduced out-of-network billing by 34 percent and lowered in-network emergency physician payments by nine percent. Among the results, the DFS report found the following with respect to emergency services:
- Of 2,250 disputes involving bills for emergency services submitted to DFS for IDR during 2015 to 2018, 263 cases were settled, amounting to 12 percent.
- 43 percent of decisions were in favor of the health plan, 24 percent were in favor of the provider, and 33 percent were split between the health plan and provider, meaning that more than one CPT code was submitted for the date of service, and the IDRE found in favor of the health plan for some codes and the provider for others.
The most common specialty for disputes involving emergency services in 2015 to 2018 was plastic surgery, followed by emergency medicine and orthopedic surgery. Less common provider specialties included cardiology, neurology, radiology, dental surgery, anesthesiology, assistant surgery, psychiatry, gastroenterology, OB/GYN, urology, and pediatrics, which each accounted for less than one percent of all disputes reviewed through December 31, 2018.
In 2015 to 2018, 1,486 disputes involving surprise bills were submitted to IDR. Of those, 815 IDR decisions were rendered. Health plans prevailed in 13 percent of the cases, while providers prevailed in 48 percent of the cases. There were split decisions in 39 percent of the cases.
The dollar amounts of IDR decisions were most frequently in the $1,000 to $5,000 range, regardless of whether the health plan or the provider prevails.
As awareness continues to increase around this issue, the DFS said that it expected the number of IDRs to continue to increase.
Learn more: DFS Report.
Steven A. Meyerowitz
Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. He may be contacted at [email protected].