New York State Seal
STATE OF NEW YORK
INSURANCE DEPARTMENT

25 BEAVER STREET
NEW YORK, NEW YORK 10004

Eliot Spitzer
Governor
Eric R. Dinallo
Acting Superintendent

The Office of General Counsel issued the following opinion on February 13, 2007, representing the position of the New York State Insurance Department.

Re: Payment for Emergency Ambulance Services

Questions Presented:

1. Under the New York Insurance Law and corresponding regulations, is an ambulance company, which is a non-participating provider that renders emergency medical services to a patient, a third-party beneficiary of an insurance contract between an insurer or HMO and the patient?

2. Do the New York Insurance Law and corresponding regulations require an insurer or HMO to provide an ambulance company with a copy of the insurance policy or contract so that the ambulance company will know the amount of the copayment and deductible that the patient is responsible for under the insurance policy or contract and can bill the patient accordingly?

3. Do the New York Insurance Law and corresponding regulations define the term "usual and customary charge"?

Conclusions:

1. No. The New York Insurance Law and corresponding regulations do not specifically address whether an ambulance company, which is a non-participating provider that renders emergency medical services to a patient, is a third-party beneficiary of an insurance contract between an insurer or HMO and the patient. However, New York courts have held that a person may be a third-party beneficiary of a contract only if the contract was intended for that person's benefit, and the contract clearly evinces an intention to assume a duty directly to the third party. Thus, the ambulance company may be a third-party beneficiary of the insurance contract between the insurer or HMO and the patient, if the contract was intended for the benefit of the ambulance company, and the contract clearly expresses an intention to assume a duty directly to the ambulance company.

2. No. The New York Insurance Law and corresponding regulations do not specifically require an insurer or HMO to provide an ambulance company with a copy of the insurance policy or contract so that the ambulance company will know the amount of the copayment and deductible that the patient is responsible for under the insurance policy or contract and can bill the patient accordingly.

3. No. The New York Insurance Law and corresponding regulations do not define the term "usual and customary charge".

Facts:

This inquiry is of a general nature, without reference to specific facts.

Analysis:

Question No. 1

The New York Insurance Law and corresponding regulations do not specifically address the question of whether an ambulance company, which is a non-participating provider that renders emergency medical services to a patient, is a third-party beneficiary of an insurance contract between an insurer or HMO and the patient. However, New York courts have held that a person may be a third-party beneficiary of a contract if it clearly is intended for that person's benefit, see Lawrence v. Fox, 20 N.Y. 268 (1859); State v. American Mfrs. Mut. Ins. Co., 188 A.D.2d 152 (3rd Dep't. 1993), and the contract clearly evinces an intention to assume a duty directly to the third party. Nationwide Mut. Ins. Co. v. Corsey, 62 Misc. 2d 467 (Sup Ct. Onondaga County 1970). Thus, the ambulance company is not a third-party beneficiary of the insurance contract between the insurer or HMO and the patient, unless it can be shown that the contract clearly was intended for the benefit of the ambulance company, and the contract clearly expresses an intention to assume a duty directly to the ambulance company.

Moreover, we note that the ambulance company may enter into an assignment of benefits with the patient. However, the validity of such assignment would depend upon the terms of the contract between the insurer or HMO and the insured. See New Medico Associates, Inc. v. Empire Blue Cross and Blue Shield, 267 A.D. 2d 757, 701 N.Y.S.2d 142 (3rd Dep't. 1999) (holding that an assignment of benefits was void where the insurance contract contained a no assignment clause).

Question No. 2

The inquirer next asked whether the New York Insurance Law and corresponding regulations require an insurer or HMO to provide an ambulance company with a copy of the insurance policy or contract so that the ambulance company will know the amount of the copayment and deductible that the patient is responsible for under the insurance policy or contract and can bill the patient accordingly.

N.Y. Ins. Law § 4303(aa) (McKinney Supp. 2007), which contains the minimum benefits that must be included in insurance contracts issued by not-for-profit health insurers and HMOs, provides, in relevant part, as follows:

(aa)(1) Every contract issued by a hospital service company or health service corporation which provides major medical or similar comprehensive-type coverage shall include coverage for prehospital emergency medical services for the treatment of an emergency condition when such services are provided by an ambulance service issued a certificate to operate pursuant to section three thousand five of the public health law.

(2) Payment by an insurer pursuant to this section shall be payment in full for the services provided. An ambulance service reimbursed pursuant to this section shall not charge or seek any reimbursement from, or have any recourse against an insured for the services provided pursuant to this subsection, except for the collection of copayments, coinsurance or deductibles for which the insured is responsible for under the terms of the policy.

(3) An insurer shall provide reimbursement for those services prescribed by this section at rates negotiated between the insurer and the provider of such services. In the absence of agreed upon rates, an insurer shall pay for such services at the usual and customary charge, which shall not be excessive or unreasonable. (emphasis supplied)

N.Y. Ins. Law § 3221(l)(15) (McKinney 2006 and Supp. 2007), which applies to group or blanket accident and health insurance policies, and N.Y. Ins. Law § 3216(i)(24) (McKinney 2006 and Supp. 2007), which applies to individual accident and health insurance policies, contain provisions identical to N.Y. Ins. Law § 4303(aa).

Although such provisions allow an ambulance company to bill the patient directly for copayments, coinsurance or deductibles, they do not address whether an insurer or HMO must provide the ambulance company with a copy of the insurance policy or contract. At the same time, there is nothing under New York law that precludes an ambulance company from making such a request of the insured.

Question No. 3

Lastly, the inquirer asked whether the New York Insurance Law and corresponding regulations define the term "usual and customary charge".

Although Insurance Law §§ 3216(i)(24), 3221(l)(15), and 4303(aa) refer to the term "usual and customary charge", nowhere does the Insurance Law or its corresponding regulations define such term. Rather, the definition of that term ordinarily is set forth in the insurance contract between the insurer or HMO and the insured.

Please note that the conclusions expressed in this opinion are strictly limited to constrictions of the New York Insurance Law and regulations promulgated thereunder.

For further information you may contact Associate Attorney Pascale Jean-Baptiste at the New York City Office.