FAQ: Network Adequacy Requirements for Health Insurers

The Insurance Law § 3241(a) network adequacy requirements apply to health insurance policies and contacts, including stand-alone vision and stand-alone dental insurance policies or contracts, with a network of health care providers upon issuance or renewal on and after March 31, 2015. Any health insurance policy, contract, or rider submitted to DFS for approval must include network adequacy information.

Health plans should submit their networks to DFS for quarterly review through the Provider Network Data System (“PNDS”). PNDS is an online portal used by DOH to collect health plan network information and track and manage network adequacy for each health plan.

The network adequacy standards do not include specific exceptions to allow for circumstances when service areas do not have the required number of providers or where usage patterns are distinct. DFS follows the same standards that DOH currently uses in these circumstances.

DFS follows the same standards that DOH uses to determine which providers may be considered PCPs. For purposes of network adequacy requirements, PCPs can typically be in one of four primary care provider categories: Family Practice, General Practice, Internal Medicine, and Pediatrics. Nurse Practitioners that specialize in Family Practice, General Practice, or Internal Medicine may also satisfy the PCP requirement count. While Physician Assistants may serve as PCPs, Physician’s Assistants are not counted in the primary care provider categories in PNDS and are not counted toward satisfying the minimum network adequacy requirements for PCPs.

The network adequacy standards do not include a process to request an exception. DFS follows the same standards that DOH uses in these circumstances.

DOH’s Guidelines for Reviewing MCO Service Delivery Networks do not allow for exceptions to time and distance standards for urban areas. DFS follows the same standards that DOH uses.

When a health plan attests that its network has been approved by DOH, the health plan should use the date of the statement of agreement with DOH.

Yes, if a policy form is approved before the network is approved, the policy form may be used and the health plan’s marketing materials should indicate that the network is pending DFS approval. Any network used in connection with an approved policy form must be submitted to DFS for review within 60 days of the date of approval of the policy form.

Health plans are required to submit a network filing for each unique network.

DFS does not distinguish between tiered and non-tiered networks. As such, health plans should follow the same process for submitting a tiered network as they would for a non-tiered network.

No. The requirement to file a network used with a stand-alone dental insurance policy or contract is not limited to those dental insurance policies or contracts that are NYSOH-certified, but includes all stand-alone dental insurance policies or contracts that use a network of providers.

The telehealth network adequacy requirements in Insurance Law §§ 3217-h(a)(3) and 4306-g(a)(3) apply to health insurance policies and contracts with a network of health care providers upon issuance or renewal on or after April 1, 2022. Insurers that provide comprehensive health insurance must ensure that the network is adequate to meet the telehealth needs of insureds for services covered under the policy or contract.

Insurance Law §§ 3217-a(a)(19)(B) and 4324(a)(20)(B) and Public Health Law § 4408(1)(t)(ii) require health plans to disclose the amount they will reimburse under their OON methodology set forth as a percentage of UCR.

• This requirement will be satisfied if a health plan provides the approximate percentage of UCR that equates to the reimbursement under the health plan’s OON methodology.
• Health plans that have different OON reimbursement methodologies for facilities and other providers need to separately disclose the percentage for the facilities and the percentage for other providers.
• Health plans should use the 80th percentile of UCR for the allowed amount comparison.

The health plan should provide a statement indicating the percentage of charges that the health plan pays.

Insurance Law §§ 3217-a(a)(19)(C) and 4324(a)(20)(C) and Public Health Law § 4408(1)(t)(iii) require health plans to provide examples of anticipated out-of-pocket costs for frequently billed OON services. This requirement will be satisfied if a health plan provides at least three examples which include examples for a colonoscopy (CPT code 45380), spinal surgery (CPT code 63030), and breast reconstruction (CPT code 19357) in a format provided by DFS. The term “hospital services” on the OON Reimbursement Examples chart should reflect outpatient costs for a colonoscopy and inpatient costs for a laminotomy and breast reconstruction. Health plans should add either (outpatient) or (inpatient) after Hospital Services.

Claims submitted by insureds via facsimile are subject to the 45-day prompt payment requirement in Insurance Law § 3224-a(a). Claims submitted electronically via the internet or by electronic mail are subject to the 30-day prompt pay requirement in Insurance Law § 3224-a(a).

A health plan may establish a designated electronic and mailing address for submission of claims and should prominently post the address on its website and in plan materials, including the policy, contract, or certificate. A health plan may also post language on its website to refer insureds to an address on their health plan identification cards. If a health plan has multiple mailing addresses for claim submissions, it does not need to post all addresses on its website and may post information on its website that refers insureds to their identification cards.

If no provider is identified, the preauthorization approval determination should specifically indicate that no provider was identified.

Yes, the preauthorization approval letter may state that while the identified provider may be either participating or non-participating, the insured will be held harmless.

The health plan’s preauthorization approval letters may state that the health plan pays x% of the provider’s charge, and that the insured should consult the provider to determine the provider’s charge.

Yes, the referral is subject to the OON referral provisions. If the insured submits the required written statement from the insured’s attending physician, utilization review and external appeal rights must be provided.

Insurance Law § 4904(a-2) and Public Health Law § 4904(1-b) require an appeal regarding a referral to an out-of-network provider to be treated as a utilization review appeal and not a grievance if the insured submits a written statement from his or her attending physician that: (1) the in-network provider(s) does not have the appropriate training and experience to meet the insured’s particular health care needs; and (2) recommends an out-of-network provider with the appropriate training and experience to meet the insured’s particular health care needs who is able to perform the requested service. These sections of the law define attending physician as “a licensed, board certified or board eligible physician qualified to practice in the specialty area appropriate to treat the insured for the service.”

No. The insured’s attending physician, who signs the written statement for the out-of-network referral internal appeal could be an out-of-network physician.

Yes, the external appeal provisions for OON referral denials apply to requests for a preauthorization or referral to an out-of-network provider that are made before services are rendered.

No, except in limited circumstances. To submit the internal appeal, the insured’s attending physician must include a written statement based upon the in-network providers listed by the health plan in the initial adverse determination letter, requiring the attending physician to research the in-network providers. The attending physician must also complete the attestation in the external appeal application based on the in-network providers listed by the utilization review agent in the final adverse determination letter. Adding in-network providers to the final adverse determination that could have been listed in the initial adverse determination letter creates unnecessary delays for the submission of the external appeal application. A utilization review agent should not list new or additional in-network providers in the final adverse determination letter unless the in-network providers listed in the initial adverse determination letter no longer participate with the health plan’s network or a new provider was added to the health plan’s network.

The health plan must ensure that the insured is only responsible for the in-network deductible, copayment, and coinsurance. The health plan should either negotiate the reimbursement rate with the provider or pay the rate charged.

A surprise bill includes services referred by a participating physician to a non-participating provider without the explicit written consent of the insured acknowledging that the participating physician is referring the insured to a non-participating provider and that the referral may result in costs not covered by the health plan. A referral to a non-participating provider occurs when (1) the health care services are performed by a non-participating health care provider in the participating physician’s office or practice during the course of the same visit; (2) the participating physician sends a specimen taken from the patient in the physician’s office to a non-participating laboratory or pathologist; or (3) for any other health care services when referrals are required under the insured’s contract (i.e., a gatekeeper).

• If an insured is covered under a contract that does not require the insured to obtain a referral before obtaining services and the insured obtains services described in (1) or (2), it will be a surprise bill.
• If an insured is covered under a contract that requires the insured to obtain a referral before obtaining services and the insured obtains services described in (1) or (2), it will be a surprise bill regardless of whether the insured requested a referral.
• If an insured is covered under a contract that requires the insured to obtain a referral before obtaining services, and the insured obtains services provided by a non-participating provider at a participating hospital or ambulatory surgical center and either a participating provider is unavailable, or a non-participating provider renders services without the insured’s knowledge, or unforeseen medical services arise, it will be a surprise bill regardless of whether the insured requested a referral.
• If an insured receives services described in (3) above without requesting a referral, and the services were not otherwise provided at a participating physician’s request (and it is not a service described in (1) or (2) above or a service provided by a non-participating provider at a participating hospital or ambulatory surgical facility as described above) it will not be a surprise bill.
• If an insured is covered under a contract that does not have a gatekeeper but requires the insured to obtain preauthorization before obtaining services, and the insured obtains services described in (1) or (2) above, it will be a surprise bill regardless of whether the insured requested preauthorization.
• If an insured is covered under a contract that does not have a gatekeeper but requires the insured to obtain preauthorization before obtaining services, and the insured obtains services provided by a non-participating provider at a participating hospital or ambulatory surgical center and either a participating provider is unavailable, or a non-participating provider renders services without the insured’s knowledge, or unforeseen medical services arise, it will be a surprise bill regardless of whether the insured requested preauthorization.
• If an insured is covered under a contract that does not have a gatekeeper but requires the insured to obtain preauthorization, (3) above would not apply because the insured’s contract does not require referrals.

Yes, and if the provider receives the consent, it will not be a surprise bill under Financial Services Law § 603(h)(2). The provider should use the Standard Written Notice and Consent Form prescribed in 45 C.F.R. § 149.420.

It depends on the circumstances. For a bill for health care services to be a surprise bill under New York Law, the health care services must be provided in, or in certain circumstances, partially provided in New York. If the participating physician and the non-participating referred health care provider are providing services solely outside of New York, then it would not be a surprise bill under New York Law, but the federal No Surprises Act would apply.

Financial Services Law § 605(a) provides that a bill for emergency services in a hospital from a non-participating physician, provider, or hospital, including a bill for inpatient services which follow an emergency room visit, is eligible for IDR.

Services provided by a non-participating hospital or services provided by a non-participating physician or other provider during an inpatient hospital stay following an emergency room visit are considered inpatient services.

Inpatient services following an emergency room visit are eligible for IDR as an emergency services dispute through the date the patient is discharged. Follow-up outpatient services after discharge are not inpatient services following an emergency room visit.

The services are considered emergency services and subject to the requirements and protections for emergency services regardless of whether the hospital is in-network or out-of-network.

Post-stabilization care physician services are physician services related to an emergency condition that are provided after an insured is stabilized to maintain the stabilized condition, or to improve or resolve the insured’s condition.

If the health plan and hospital had not previously entered into a participating provider agreement, Financial Services Law § 605(a) provides that the health plan must pay an amount that it determines is reasonable for the services rendered except for the insured’s in-network copayment, coinsurance, or deductible, if any.

Under Financial Services Law § 605(e), when a health plan and a hospital had previously entered into a participating provider agreement, the health plan must pay an initial amount that is at least 25% greater than the amount the health plan would have paid for the claim if the hospital had been in-network, based on the most recent contract between the health plan and the hospital, adjusted based on the medical consumer price index if the prior contract expired more than 12 months ago. If a health plan believes this initial payment amount is not reasonable, it may file a dispute by proposing an amount it believes is reasonable.

If the previous contract between the health plan and the hospital expired more than 12 months prior to the payment of the disputed claim, the payment amount must be at least 25% greater than the prior contracted rate and must be adjusted based on the medical consumer price index. This is the case even if the previous contract expired several years prior to the payment of the disputed claim. The base payment should increase each year by the amount of the previous year’s medical consumer price index, meaning that it is compounded annually.

A dispute over the calculation of the health plan payment amount under Financial Services Law § 605(e) when the health plan and hospital had previously entered into a participating provider agreement should be submitted to DFS’s Consumer Assistance Unit and should not be submitted to IDR.

Yes. Hospital services provided to the insured would be eligible for IDR because the hospital is not a participating provider with respect to the insured’s health insurance policy.

Under Financial Services Law § 605(a), the health plan should pay an amount that it determines is reasonable for the services rendered, except for the insured’s in-network copayment, coinsurance, or deductible, if any. The health plan would not have to pay the rate that is 25% greater than the contracted rate.

Public Health Law § 2807-C(1)(a-2) provides that with the exception of those enrollees covered under a payment rate methodology agreement negotiated with a general hospital, payments for hospital services for Medicaid managed care coverage shall be at the Medicaid rate.

Under Financial Services Law § 604 and 23 NYCRR 400, an IDR entity shall consider all relevant factors, including:

• Whether there is a gross disparity between the fee charged by the hospital and (1) fees paid to the hospital for the same services provided to other patients in health plans in which the hospital is non-participating, and (2) the fees paid by the health plan to reimburse similarly qualified out-of-network hospitals for the same services in the same region;
• The teaching status, scope of services, and case mix of the hospital;
• The hospital’s usual charge for comparable services when the hospital does not participate with the patient’s health plan;
• The circumstances and complexity of the case, including the time and date of the service;
• Individual patient characteristics;
• The median of the rate recognized by the health plan to reimburse similarly qualified hospitals for the same or similar services in the same region that are participating with the health plan; and
• Any additional information the hospital or health plan deemed relevant and submitted to the IDRE to support the appeal.

Under Financial Services Law § 605(e), either party may submit a dispute to IDR relating to the payment to the hospital, and a hospital may seek additional payment from the health plan prior to a decision by the IDR entity. The IDR entity must select either the health plan’s last and best offer of payment when the IDR process is initiated, which may be different than the amount that is 25% greater than the previous contracted rate, or the hospital’s last and best offer when the IDR process is initiated.

The hospital’s fee should be reviewed in total and components of the fee may be grouped together using a generally accepted grouping methodology. The health plan, and hospital as applicable, should disclose how the hospital charges are grouped for purposes of determining the payment amount.

Insurance Law §§ 3217-b(i) and 4325(j) and Public Health Law § 4406-c(5-c) require that if a contract between a hospital and a health plan is not renewed or is terminated, the parties shall continue to abide by the terms of the contract for a period of two months from the effective date of the termination or the end of the contract period. Insurance Law §§ 3217-b(l) and 4325(m) and Public Health Law § 4406-c(5-e) require a health plan and hospital to use a mutually agreed upon mediator to assist in resolving any outstanding contractual issues at least 60 days prior to the termination of the contract between the health plan and the hospital. These provisions apply 60 days prior to the termination of the contract. The cooling-off period in Insurance Law §§ 3217-b(i) and 4325(j) and Public Health Law § 4406-c(5-c) begins from the date of termination or nonrenewal and runs for two months from that date. The two time periods run consecutively.

Since the parties are required under Insurance Law §§ 3217-b(i) and 4325(j) and Public Health Law § 4406-c(5-c) to continue to abide by the terms of the contract for a period of two months from the effective date of the termination or the end of the contract period, the hospital would still be considered in-network during this two month period and the dispute resolution process for non-participating hospital services in Financial Services Law § 605, including the required health plan payment amount in Financial Services Law § 605(e), would not apply until after the cooling-off period has ended.

Insurance Law §§ 3217-b(l) and 4325(m) and Public Health Law § 4406-c(5-e) require the parties to utilize a mutually agreed upon mediator to assist in resolving any outstanding contractual issues. The law does not provide for a waiver of this requirement.

Insurance Law §§ 3217-b(l) and 4325(m) and Public Health Law § 4406-c(5-e) took effect on January 1, 2020. Health plans and hospitals should attempt to agree to a mediator to resolve the dispute for any contracts that may terminate on or after January 1, 2020. Health plans and hospitals should add provisions to their participating provider agreements that are issued or renewed on or after January 1, 2020 to comply with this requirement.

The requirement to use a mutually agreed upon mediator in Insurance Law §§ 3217-b(l) and 4325(m) and Public Health Law § 4406-c(5-e) applies both to termination and when the contract between the hospital and the health plan is not being renewed at the end of the fixed contract term.