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

George E. Pataki
Governor

Gregory V. Serio
Superintendent

The Office of General Counsel issued the following informal opinion on December 23, 2003, representing the position of the New York State Insurance Department.

RE: Independent and Public Adjusters

QUESTION PRESENTED

Is an independent or public adjuster’s license under N.Y. Ins. Law § 2101(g)(1) (McKinney 2003) required to review the accuracy of ICD-9cm and CPT codes submitted for payment on behalf of health care providers?

CONCLUSION

The services described by the inquirer do not fall within the definition of insurance adjusting and, as such, do not require the inquirer to be licensed as a independent or public adjuster.

FACTS

The inquirer reviews the accuracy of ICD-9cm and CPT codes submitted for payment. These reviews are performed on behalf of health care providers, solely for the purpose of ensuring coding and billing accuracy. If an error is found, the inquirer contacts the health care provider of the correct code that should have been used. A coding change requires the health care provider or an authorized provider signature to indicate that a coding/billing error was found and has been corrected. Health care providers are also provided with assistance regarding adherence to coding guidelines.

ANALYSIS

N.Y. Ins. Law § 2108(a) (McKinney 2003) prohibits any person, firm, association or corporation from acting as an insurance adjuster without the appropriate license.

N.Y. Ins. Law § 2108(a)(1)-(4) specifically states:

(a)(1) Adjusters shall be licensed as independent adjusters or as public adjusters.

(2) The superintendent may prescribe the types of independent adjusters' licenses according to the kind or kinds of insurance claims which the licensee is to be authorized to investigate and adjust.

(3) No adjuster shall act on behalf of an insurer unless licensed as an independent adjuster, and no adjuster shall act on behalf of an insured unless licensed as a public adjuster.

(4) No insurer, agent or other representative of an insurer shall pay any fees or other compensation to any person, firm, association or corporation for acting as an independent adjuster except to a licensed independent adjuster or to a person excepted from the licensing requirement pursuant to subsection (g) of section two thousand one hundred one of this article.

N.Y. Ins. Law § 2101(g)(1) (McKinney 2003) states:

The term "independent adjuster" means any person, firm, association or corporation who, or which, for money, commission or any other thing of value, acts in this state on behalf of an insurer in the work of investigating and adjusting claims arising under insurance contracts issued by such insurer and who performs such duties required by such insurer as are incidental to such claims and also includes any person who for compensation or anything of value investigates and adjusts claims on behalf of any independent adjuster. .  .

N.Y. Ins. Law § 2101(g)(2) (McKinney 2003) states:

"Public adjuster" means any person, firm, association or corporation who, or which, for money, commission or any other thing of value, acts or aids in any manner on behalf of an insured in negotiating for, or effecting, the settlement of a claim or claims for loss or damage to property of the insured in this state caused by, or resulting from, any of the risks as enumerated in paragraphs four, five, six, seven, eight, nine and ten and subparagraphs (B) and (C) of paragraph twenty of subsection (a) of section one thousand one hundred thirteen of this chapter, not including loss or damage to persons under subparagraph (B) of paragraph twenty of subsection (a) of such section or who, or which, advertises for, or solicits employment as an adjuster of such claims, and shall also include any person who, for money, commission or any other thing of value, solicits, investigates, or adjusts such claims on behalf of any such public adjuster. . .

Based upon the facts provided, the activities of the inquirer involve reviewing the accuracy of ICD-9cm and CPT codes solely for the purpose of billing and coding accuracy on behalf of the health care provider. Based upon these facts, the inquirer does not act or aid in any manner on behalf of the insurer or the insured. Therefore, the services described by the inquirer do not fall within the definition of insurance adjusting and, as such, do not require the inquirer to be licensed as an independent or public adjuster.

Although N.Y. Ins. Law § 2101(g)(1) was recently amended by Chapter 692 of the Laws of 2003, which became effective on October 21, 2003, the amendment does not change the definition of the term "independent adjuster" so as to require the inquirer to obtain an independent adjuster’s license.

For further information one may contact Special Counsel Athan Shinas at the Albany Office.