New York State Seal
STATE OF NEW YORK
INSURANCE DEPARTMENT
25 BEAVER STREET
NEW YORK, NEW YORK 10004

The Office of General Counsel issued the following informal opinion on December 14, 2001, representing the position of the New York State Insurance Department.

Re: Health Care Professional Termination by Insurer

Issue

Is New York Public Health Law § 4406-d (McKinney 1993 and 2001 Supplement), regulating appointment and terminations of health care professionals, applicable to Health Service Corporations licensed pursuant to New York Insurance Law Article 43 (McKinney 2000)?

Conclusion

While New York Public Health Law § 4406-d is only applicable to Health Maintenance Organizations, New York Insurance Law § 4803 (McKinney 2000) imposes similar requirements on insurers, including Health Service Corporations.

Facts

No specific facts were supplied.

Analysis

New York Public Health Law § 4406-d(2)(a) provides:

A health care plan shall not terminate a contract with a health care professional unless the health care plan provides to the health care professional a written explanation of the reasons for the proposed contract termination and an opportunity for a review or hearing as hereinafter provided. This section shall not apply in cases involving imminent harm to patient care, a determination of fraud, or a final disciplinary action by a state licensing board or other governmental agency that impairs the health care professional's ability to practice.

New York Public Health Law § 4406-d(8) defines a health care plan:

For purposes of this section, ‘health care plan’ shall mean a health maintenance organization licensed pursuant to article forty-three of the insurance law or certified pursuant to this article or an independent practice association certified or recognized pursuant to this article.

Accordingly, by its terms, New York Public Health Law § 4406-d is limited to HMOs either holding a Certificate of Authority from the Commissioner of Health in accordance with New York Public Health Law § 4403 (McKinney 1993) or licensed in accordance with New York Insurance Law § 4302 (McKinney 2000). This would include an HMO that is a line of business of a Health Service Corporation licensed pursuant to New York Insurance Law § 4302, as authorized by N.Y. Comp. R. & Regs. tit. 10, § 98-1.5(a) (2001).

There is, however, a companion provision governing insurers, New York Insurance Law § 4803(b)(1):

An insurer shall not terminate a contract with a health care professional for participation in the in-network benefits portion of the insurer's network for a managed care product unless the insurer provides to the health care professional a written explanation of the reasons for the proposed contract termination and an opportunity for a review or hearing as hereinafter provided. This section shall not apply in cases involving imminent harm to patient care, a determination of fraud, or a final disciplinary action by a state licensing board or other governmental agency that impairs the health care professional's ability to practice.

New York Insurance Law § 4801(c) (McKinney 2000) defines a managed care product:

[A] ‘managed care health insurance contract’ or ‘managed care product’ shall mean a contract which requires that all medical or other health care services covered under the contract, other than emergency care services, be provided by, or pursuant to a referral from, a designated health care provider chosen by the insured (i.e. a primary care gatekeeper), and that services provided pursuant to such a referral be rendered by a health care provider participating in the insurer's managed care provider network. In addition, in the case of (i) an individual health insurance contract, or (ii) a group health insurance contract covering no more than three hundred lives, imposing a coinsurance obligation of more than twenty-five percent upon services received outside of the insurer's provider network, and which has been sold to five or more groups, a managed care product shall also mean a contract which requires that all medical or other health care services covered under the contract, other than emergency care services, be provided by, or pursuant to a referral from, a designated health care provider chosen by the insured (i.e. a primary care gatekeeper), and that services provided pursuant to such a referral be rendered by a health care provider participating in the insurer's managed care provider network, in order for the insured to be entitled to the maximum reimbursement under the contract.

For further information, you may contact Principal Attorney Alan Rachlin at the New York City office.