New York State
Insurance Department

Tough New Sanctions Also Imposed on HMOs That Fail to Respond Promptly

New York, September 26, 1997  

Governor George E. Pataki today signed legislation requiring the prompt, fair and equitable payment of patient claims, as well as bills submitted to HMOs and insurance companies by doctors and other health care providers. 

The new law requires HMOs and insurers to pay claims and bills within 45 days of receipt, makes them pay significant interest on any late payments and imposes stiff fines on companies that violate the law. 

"For too long, some HMOs have made patients, doctors and other health care providers wait an unacceptable period of time to be paid," Governor Pataki said. "We have had many complaints from both consumers and health care providers about these practices. 

"Now these payments will have to be made quickly, and tough sanctions will be imposed on those HMOs that violate the law," the Governor said. "The Superintendent of Insurance is also now empowered to take strong action against those companies that fail to respond to Insurance Department inquiries about delays in payment." 

Superintendent of Insurance Neil D. Levin said, "The Insurance Department, under this new law, can now fine companies up to $500 per day for each claim not paid after the 45 day limit. We can also fine HMOs and insurers up to $500 per day if they do not respond to our inquiries in a timely manner." 

"These tough, new sanctions will send a clear message that HMOs and insurance companies must be responsive to their members as well as medical providers or face the consequences," Superintendent Levin said. "We will not allow any HMO or insurance company to undermine the stability of New York State's health care system." 

The new law: 

The new law becomes effective in 120 days.