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

George E. Pataki
Governor

Howard Mills
Superintendent

The Office of General Counsel issued the following opinion on December 5, 2006, representing the position of the New York State Insurance Department.

Re: No-Fault Payment for Prescription Drugs

QUESTION PRESENTED

Must a No-Fault insurer make direct payment to a pharmacy for medically necessary prescription drugs dispensed to an eligible injured person?

CONCLUSION

No. Pursuant to N.Y. Comp. Codes R. & Regs. tit. 11 § 65-3.11(a) (Regulation 68), a No-Fault insurer is required to make direct payments only to providers of health care services. A pharmacy is not authorized to provide health care services under New York law.

FACTS

An eligible injured person has been advised by a No-Fault insurer that it will not accept direct billing from a pharmacy for medically necessary drugs dispensed to an eligible injured person.

ANALYSIS

Pursuant to N.Y. Ins. Law § 5102(a)(1) (McKinney 2006), medically necessary prescription drugs are reimbursable under No-Fault.

With respect to making payment for prescription drugs, N.Y. Comp. Codes R. & Regs. tit. 11 § 65-3.11(a) (Regulation 68) states that "An insurer…shall pay benefits directly to providers of health care services as covered under section 5102 (a)(1) of the Insurance Law…"

While a No-Fault insurer must reimburse an eligible injured person for payment made by such person for medically necessary drugs dispensed, the regulation only requires that the insurer make direct payments to providers of health services. Since pharmacies are not licensed to provide health care services under New York law, an insurer is not required to make direct payment to pharmacies dispensing drugs that are reimbursable under No-Fault.

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