New York State Seal

STATE OF NEW YORK

INSURANCE DEPARTMENT

25 BEAVER STREET

NEW YORK, NEW YORK 10004

David A. Paterson

Governor

Kermitt J. Brooks

Acting Superintendent

OGC Op. No. 09-07-05

The Office of General Counsel issued the following opinion on July 22, 2009 representing the position of the New York State Insurance Department.

Re: Health Insurance, Time Limit on Claim Submission

Questions Presented:

1. Is there a minimum amount of time that an insurer, including an HMO, must allow for the submission of claims by a participating provider?

2. If there is no time limit for the submission of a claim set forth in the contract between the participating provider and the insurer, then how long does a participating provider have to submit a claim to the insurer?

3. If an insurer, including an HMO, denies a claim by a participating health care provider as stale, would the amount that would otherwise be payable to the provider be payable to the State pursuant to the New York Abandoned Property Law?

Conclusions:

1. No. There is no minimum amount of time that an insurer, including an HMO, must allow for the submission of claims by a participating provider.

2. If the contract between the provider and the insurer is silent on the matter of what would constitute a timely claim, then the insurer should provide for submission of a claim within a reasonable time.

3. Interpretations of the Abandoned Property Law are within the purview of the New York State Department of Audit and Control, not the New York State Insurance Department. Accordingly, the Insurance Department will not opine on this question.

Facts:

The inquirer’s law firm represents a number of health care providers, including institutions and individual practitioners, and that as part of legal representation, the firm is called upon to review participating provider contracts between its clients and insurers, including HMOs. The inquirer further reports that:

These contracts invariably include a requirement that the provider submit all claims for reimbursement to the HMO/insurer within a specified number of days (typically 90 or 180 days) after the date of service, and that failure to submit the claim within the required time period will result in denial of payment. There may be a limited exception granted where the delay in submitting a claim involves a coordination of benefits (COB). For various reasons (often times involving computer software limitations on either the submitting provider or insurer end) it is not always possible to submit the claim within the period specified in the contract, and the HMO/insurer refuses payment even though the claim is perfectly legitimate.

The inquirer asks whether the law prescribes a minimum amount of time by which an insurer must allow for the submission of claims by a provider.

The inquirer further reports that it is her understanding that a health care provider has a legal obligation, pursuant to the Abandoned Property Law, to remit credit balances to the State under certain circumstances, and asks whether the understanding is correct.

Analysis:

I. Time for Claim Submissions

The inquirer asks whether there is a minimum amount of time within which an insurer must allow for submission of a claim by a participating health care provider.

The analysis is limited to interpretation of the New York Insurance Law in so far as it regulates accident and health insurance, medical expense insurance, and subscriber contracts of HMOs. This opinion is not intended to express views about time limits imposed by any statute, either State or federal, concerning subjects such as Medicare or no-fault automobile insurance. Nor does it address any legal requirements imposed on non-participating health care providers or insureds.

N.Y. Ins. Law §§ 3217-b and 4325 (McKinney Supp. 2009) and N.Y. Pub. Health Law § 4406-c (McKinney Supp. 2009) set forth provisions regulating various aspects of the relationship between insurers and participating health care providers. But neither the Insurance Law nor the Public Health Law set forth a minimum amount of time within which an insurer, including an HMO, must allow for submission of a claim by a participating health care provider. Further, the Insurance Department understands from conversations with the New York State Department of Health that, when reviewing a contract between an HMO and a provider, the Health Department does not require the contract to set forth a minimum time period within which an insurer must allow for submission of a claim. Neither the Insurance Department nor the Health Department review contracts between an insurer other than an HMO and a provider.

Consequently, there is no minimum amount of time that an insurer, including an HMO, must allow for the submission of claims by a participating provider.

II. Time for Claim Submissions When Contract is Silent

The inquirer next asks how long a provider has to submit a claim when the contract between the provider and the insurer is silent on the issue. When the contract is silent on that matter, the insurer should allow a reasonable period of time for the submission of the claim by the provider. The Insurance Department has not established by regulation the length of such period of time.

III. Abandoned Property

Lastly, the inquirer asks whether an amount that would otherwise be payable to a participating health care provider would be payable to the State as abandoned property if an insurer, including an HMO, were to deny a claim by the participating provider as stale. Specifically, you report that you believe N.Y. Abandoned Property Law § 1316 (McKinney Supp. 2009) applies to third-party payor credit balances held by entities, including health care providers, and inquire whether there are reciprocal requirements applicable to health insurers.

Interpretations of the Abandoned Property Law are within the purview of the New York State Department of Audit and Control. Consequently, any queries regarding the Abandoned Property Law should be directed to that agency.

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