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The New York State Insurance Department announced today that it has requested UnitedHealthcare to delay implementation of its new policy to require hospitals to provide notice within 24 hours after a patient has been admitted. The Department has requested the delay to ensure that the policy complies with Insurance Law and that the policy will not have an adverse impact on consumers or the delivery of health care services.

United’s policy will impose a penalty of up to 50% of normal payment if the hospital fails to notify United within 24 hours after a patient is admitted. There are no exceptions to this policy, even for weekends or holidays when the hospital’s business office may not be fully staffed.

“We are concerned that United’s 24-hour notice requirement may be in violation of laws protecting consumer access to emergency services,” said Insurance Superintendent Eric Dinallo. “The Department has had several productive meetings with United regarding the policy, and we have met with major New York hospital associations to investigate how the policy will affect hospitals on the ground. We are requesting United delay implementation of the policy so that the company can provide us requested information addressing the concerns we have raised.”

According to the Insurance Department, the United policy may compel hospitals to communicate with health plans in emergency situations, in potential violation of state and federal law, or face a financial penalty.

In addition, the Insurance Department is concerned that the policy may not serve to manage care, as United suggests. The Department supports efforts to reasonably reduce administrative costs generally. However, hospitals have complained that the notification policy is simply another hurdle that increases administrative burdens on providers and allows the health plan to deny payment on technical grounds without any demonstration that the notification will be effectively used to coordinate care.

Moreover, the manner in which United implemented its policy calls into question a frequent complaint of hospitals and other providers: the practice of health plans to make material changes to the terms of contract with the provider by unilaterally changing the health plans’ policy manual rather than negotiating an amendment to the contract with the provider.



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