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 opinion on October 1, 2002, representing the position of the New York State Insurance Department.

RE: Hospital Billing Under No-Fault.

Question Presented:

When an eligible injured person is hospitalized as a result of a motor vehicle accident and assigns his/her contractual rights to No-Fault benefits to the hospital, at what point does the time period begin during which a health care provider must submit a bill for services rendered to a No-Fault insurer in order to be eligible for payment under No-Fault?

Conclusion:

The hospital must bill within the required time period specified under the No-Fault Endorsement, which period begins from the date of patient discharge.

Analysis:

Under N.Y. Comp. Codes R. & Regs. Tit. 11, 65-1.1(b)(2002)(Regulation 68), which is the prescribed endorsement for No-Fault coverage in New York for all new and renewal policies effective on and after April 5, 2002, the Proof of Claim Condition mandates that "In the case of a claim for health service expenses, the eligible injured person or that person’s assignee or representative shall submit written proof of claim to the Company, including full particulars of the nature and extent of the injuries and treatment received and contemplated, as soon as reasonably practicable but, in no event later than 45 days after the date services are rendered….". (Under the former version of Regulation 68, for all policies issued and effective prior to April 5, 2002, there was a 180 day period in the endorsement for bill submission after the date services are rendered.) While this provision is clear with respect to individual health providers, where the charges for services provided on a particular day are ascertainable, a different billing methodology exists for hospital inpatient billing, pursuant to N.Y. Health Law § 2807-c (McKinney, 2001).

Under Section 2807-c (applicable to No-Fault), reimbursement for inpatient hospital billings are made on an individually calculated case based payment per patient discharge ("DRG"). The system of DRG calculation is governed under N.Y. Comp. Codes R. & Reg. Tit. 10, § 86-1.50 and 1.51 (2002). A DRG rate cannot be calculated before a patient’s discharge, as one of the variables necessary for calculation is the discharge diagnosis. Therefore, the DRG rate for billing purposes cannot be generated until the date of discharge. There is no requirement that any interim billings must be made prior to discharge.

Therefore, in applying both the No-Fault and Public Health regulations, it is clear that the time period for submission of bills by hospitals cannot begin until the date of patient discharge.

For further information, you may contact Supervising Attorney Lawrence M. Fuchsberg at the New York City office.