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STATE OF NEW YORK
INSURANCE DEPARTMENT
25 BEAVER STREET
NEW YORK, NEW YORK 10004

David A. Paterson
Governor

Eric R. Dinallo
Superintendent

OGC Op. No. 08-07-04

The Office of General Counsel issued the following opinion on July 10, 2008 representing the position of the New York State Insurance Department.

Re: Non-network Hospital Emergency Treatment

Question Presented:

On what basis should a hospital or health care professional, which has not contracted with an HMO to become a member of the HMO’s network, be reimbursed for emergency services provided to the HMO’s subscriber?

Conclusion:

An HMO is responsible for payment or reimbursement for emergency services provided to an HMO subscriber by a hospital or health care professional that is not part of the HMO’s network. An HMO may seek to negotiate the amount of such payment with the hospital or health care professional. However, other than any contractual co-payments, the HMO must ensure that the subscriber is held harmless from any additional payment obligations to the hospital or health care professional.

Facts:

The inquirer reports that an HMO subscriber went to the emergency room of a hospital because she suspected that she was having a heart attack, and neither the hospital nor the health care professional treating her had contracted with the HMO to become a member of its network. The inquirer inquires about the payment obligation of the HMO for services rendered to the subscriber by the hospital and health care professionals.

Analysis:

N.Y. Pub. Health Law § 4401(1) (McKinney 2002) is relevant to the query. That statute defines an HMO as follows:

1. "Health maintenance organization" . . . means any person, natural or corporate, or any groups of such persons who enter into an arrangement, agreement or plan or any combination of arrangements or plans which propose to provide or offer, or which do provide or offer, a comprehensive health services plan.

* * * * *

3. "Comprehensive health services" means all those health services which an enrolled population might require in order to be maintained in good health, and shall include, but shall not be limited to, physician services, . . in-patient and out-patient hospital services, diagnostic laboratory and therapeutic and diagnostic radiologic services, and emergency and preventive health services. . . .

In accordance with Public Health Law § 4406(1), contracts between an HMO and a subscriber are regulated by the New York Insurance Department as if they were contracts of a health service corporation. Pursuant to New York Public Health Law § 4406(2)(a), an HMO may, within specified limits, provide coverage for out-of-network services.

In accordance with Insurance Law § 4303(a)(2), not-for-profit health insurers and HMOs are required to provide the following coverage:

For services to treat an emergency condition in hospital facilities. For the purpose of this provision, “emergency condition” means a medical or behavioral condition, the onset of which is sudden, that manifests itself by symptoms of sufficient severity, including severe pain, that a prudent layperson, possessing an average knowledge of medicine and health, could reasonably expect the absence of immediate medical attention to result in (A) placing the health of the person afflicted with such condition in serious jeopardy, or in the case of a behavioral condition placing the health of such person or others in serious jeopardy, or (B) serious impairment to such person's bodily functions; (C) serious dysfunction of any bodily organ or part of such person; or (D) serious disfigurement of such person.

In order to effectuate the Public Health Law requirement that an HMO provide emergency services, the Commissioner of Health has promulgated 10 N.Y. Comp. Codes R.& Regs. tit. 10, § 98-1.13(a) (2005):

All covered services must be directly provided or arranged for within the approved provider network pursuant to written contracts developed and maintained in a form and manner prescribed by the commissioner, except that when services are unavailable within the provider network, such services must be arranged for outside of the approved provider network. . . . Emergency services do not require prior authorization; no MCO [Managed Care Organization] . . . may require enrollees to obtain prior authorization for the provision of such services.

Further, Congress has enacted the Emergency Treatment and Active Labor Act (EMTALA), 42 U.S.C. § 1395dd (West 2003). In accordance with EMTALA, see 42 U.S.C.A. § 1395dd(b), a hospital with an Emergency Department is required to render at least stabilizing services when presented with an “emergency condition”, which is defined in 42 U.S.C. § 1395dd(e)(1) in terms similar to New York Insurance Law § 4303(a)(2).

The Insurance Department does not administer that federal statute. However, under the facts presented, the hospital appears to have been obligated under EMTALA to provide emergency services to the subscriber, notwithstanding the fact that the hospital did not participate in the HMO’s network.

In any event, in accordance with Insurance Law § 4303(a)(2) and 10 NYCRR § 98-1.13(a), the HMO is obligated to either pay the hospital or health care professional directly or reimburse the subscriber for the emergency services, notwithstanding that the hospital or health care professional is not part of its network. Based on the Insurance Department’s discussions with the New York State Department of Health, the Insurance Department understands that the HMO may negotiate the amount of payment to the hospital or health care professional. However, under applicable statute and regulation the HMO has an obligation to ensure that the subscriber has no further financial obligation for emergency services, other than a contractual co-payment, if any.

For further information you may contact Principal Attorney Alan Rachlin at the New York City office.