The Office of General Counsel issued the following opinion on January 31, 2005 representing the position of the New York State Insurance Department.
Re: Time Limit for Request of Reimbursement on Overpayment
Is there a provision in the New York Insurance Law, or the regulations promulgated thereunder, that requires an insurer to submit a request for reimbursement on overpayment within a prescribed period of time?
No. With regard to participating providers, the terms of the contract would govern the time limit within which insurers can seek reimbursement on overpayment. There is no Insurance Law or regulation that governs this issue for non-participating providers.
The inquirer represents a medical billing company that is receiving requests from insurers for refunds on "overpayments" made two, three, or four years prior to the denial. The inquirers physician clients object to these demands, arguing that they have closed their fiscal books for that year and that the demand is coming too late.
Pursuant to New York Public Health Law § 4406(1) (McKinney 2004), the Department has jurisdiction over contracts between HMOs and their subscribers. However, quality of care and contractual relations between an HMO and its participating providers resides with the Department of Health. N.Y. Pub. Health Law § 4406-c(5-a) (McKinney 2002 and 2005 Supplement) provides:
Contracts entered into between a plan and a health care provider shall include terms which prescribe:
(a) the method by which payments to a provider, including any prospective or retrospective adjustments thereto, shall be calculated
(b) the time periods within which such calculations will be completed, the dates upon which any such payments and adjustments shall be determined to be due, and the dates upon which any such payments and adjustments will be made;(c) a description of the records or information relied upon to calculate any such payments and adjustments, and a description of how the provider can access a summary of such calculations and adjustments;
(d) the process to be employed to resolved disputed incorrect or incomplete records or information and to adjust any such payments and adjustments which have been calculated by relying on any such incorrect or incomplete records or information and to adjust any such payments and adjustments which have been calculated by relying on any such incorrect or incomplete records or information so disputed; provided, however, that nothing herein shall be deemed to authorize or require the disclosure of personally identifiable patient information or information related to other individual health care providers or the plan's proprietary data collection systems, software or quality assurance or utilization review methodologies; and
(e) the right of either party to the contract to seek resolution of a dispute arising pursuant to the payment terms of such contract through a proceeding under article seventy-five of the civil practice law and rules.
N.Y. Ins. Law § 3217-b(e) (McKinney 2004) has similar provisions regulating contracts between participating health care providers and insurers other than HMOs. N.Y. Ins. Law § 4325(e) is identical to § 3217-b(e), but regulates non-profit medical and dental indemnities, or health and hospital service corporations.
Neither the Public Health Law, nor the Insurance Law limit the time period within which an insurer must make prospective or retrospective adjustments and the dates upon which any such payments and adjustments are due. Rather, as the provisions of the Insurance Law provided demonstrate, the rights and duties of the HMO, insurer or non-profit medical and dental indemnity or health service corporation with regard to the time period for reimbursement on overpayment arise under the contract entered into between it and the participating health care provider. There is no provision in the N.Y. Insurance Law, or the regulations promulgated thereunder, regulating this issue for non-participating providers.
For further information one may contact Principal Attorney Alan Rachlin at the New York City office.