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. 09-08-09

The Office of General Counsel issued the following opinion on July 31, 2009 representing the position of the New York State Insurance Department.

Re: Insurers Providing Explanations of Benefit to Non-Participating Ophthalmologists

Questions Presented:

1. Do the New York Insurance Law and regulations promulgated thereunder require an insurer to furnish an explanation of benefit ("EOB") form to a non-participating ophthalmologist?

2. Do the Insurance Law and regulations promulgated thereunder address whether an ophthalmologist may bill a patient upfront for its usual fee, where the ophthalmologist does not participate with the patient's primary insurer, but participates with the patient's secondary insurer?

Conclusions:

1. No. The Insurance Law and regulations promulgated thereunder do not require an insurer to furnish an EOB to a non-participating ophthalmologist.

2. No. The Insurance Law and regulations promulgated thereunder do not address what the ophthalmologist may bill the patient under such circumstances. However, the ophthalmologist's contract with the secondary insurer may address this issue.

Facts:

The inquiry sets forth the following scenario: An ophthalmologist has a patient who has primary insurance coverage through ABC Insurance Company ("ABC"), and secondary insurance coverage through XYZ Insurance Company ("XYZ"). The physician does not participate with ABC, but participates with XYZ. ABC refuses to provide EOB forms to non-participating providers. The inquirer initially stated in his inquiry that ABC also refuses to accept claims from non-participating providers. However, he later clarified that this hypothetical is based on experiences that physicians have had with various insurers, including those that offer Medicare coverage.

With respect to Medicare claims, the inquirer states that the regulations promulgated by the United States Department of Health & Human Services’ Center for Medicare and Medicaid Services ("CMS") prohibit insurers from accepting claims from providers that opt-out of (or do not participate in) the Medicare program. With respect to non-Medicare claims, certain insurers do, in fact, accept claims from non-participating providers, but refuse to accept assignments of benefits from such providers. Nor will they provide EOBs to non-participating providers.

The inquirer further states in his hypothetical that the secondary insurer (XYZ) requires a copy of the EOB or Remittance Statement from the primary insurer (ABC) so that XYZ can calculate its responsibility as a secondary insurer. The inquirer also reports that when providers ask the patient for the EOB, the patient typically does not have it, or the patient ignores the provider once the patient has received payment from the primary insurer. The inquirer asks whether the New York Insurance Law and regulations promulgated thereunder require an insurer to furnish an EOB to a non-participating ophthalmologist, or permit an ophthalmologist to bill a patient upfront for its usual fee, where the provider does not participate with the patient's primary insurer, but participates with the patient's secondary insurer.

Analysis:

At the outset, it should be noted that the Department does not oversee the federal Medicare program, and questions regarding CMS regulations should be directed to that agency. The following analysis only addresses coverage to which the Insurance Law applies.

I. Providing EOBs to Non-Participating Providers

The inquirer first asks whether the Insurance Law and regulations promulgated thereunder require insurers to furnish an EOB form to a non-participating ophthalmologist.

N.Y. Ins. Law § 3234 (McKinney 2006) governs EOBs relating to claims under certain accident and health insurance policies. That statute reads, in pertinent part, as follows:

(a) Every insurer, including health maintenance organizations operating under article forty-four of the public health law or article forty-three of this chapter and any other corporation operating under article forty-three of this chapter, is required to provide the insured or subscriber with an explanation of benefits form in response to the filing of any claim under a policy or certificate providing coverage for hospital or medical expenses, including policies and certificates providing nursing home expense or home care expense benefits.

Thus, while an insurer is required to provide an EOB form to an insured or subscriber, there is currently no statutory or regulatory requirement that an insurer provide an EOB to a non-participating provider.

II. Permissibility of Billing Patient Upfront

The second question is whether the Insurance Law and regulations promulgated thereunder address whether an ophthalmologist may charge a patient upfront for its usual fee, where the ophthalmologist does not participate with the patient's primary insurer, but participates with the patient's secondary insurer.

Neither the Insurance Law nor regulations promulgated thereunder specifically address whether the ophthalmologist may bill the patient directly under such circumstances. The issue of whether a provider may bill a patient directly for its usual fee is ordinarily set forth in the contract between the insurer and the provider. The provider may wish to review the terms of its contract with the secondary insurer to determine whether the contract speaks to the matter.

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