Circular Letter No. 9 (2008)

April 16, 2008

STATUTORY REFERENCE: Section 5108 of the Insurance Law

The purpose of this Circular Letter is to inform insurers and providers of “No-fault” benefits, see Article 51 of the Insurance Law, that the Department has promulgated the 30th Amendment to Regulation No. 83.

Section 5108(a) of the Insurance Law specifically limits the fees charged by providers of health services specified under Section 5102(a) of the Insurance Law to the permissible charges established under the Workers' Compensation Board’s fee schedules (unless an insurer or arbitrator determines that unusual procedures or unique circumstances justify an excess charge). This is true whether those fees are part of, or in excess of, a claimant's basic economic loss. Pursuant to Section 5108(b) of the Insurance Law, the Superintendent has the authority to promulgate fee schedules for any health services that may be applicable to No-fault benefits for which schedules have not been established by the Workers’ Compensation Board.

In accordance with Chapter 6 of the Laws of 2007, the Workers’ Compensation Board promulgated a pharmaceutical fee schedule and durable medical equipment fee schedule that took effect July 11, 2007. Therefore, in accordance with Section 5108(a) of the Insurance Law, these Workers’ Compensation fee schedules are applicable to all prescription drugs, durable medical equipment, medical/surgical supplies, orthopedic footwear, and orthotic and prosthetic appliances dispensed to patients under the No-fault scheme on or after July 11, 2007. The 30th Amendment to 11 NYCRR 68 (Regulation No. 83) repeals Parts E and F of Appendix 17-C of the regulation, which set forth the fee schedules. However, any purchase made prior to July 11, 2007, is to be reimbursed under those fee schedules as established by the Superintendent.

All insurers and self-insurers must ensure that the new fee schedules adopted in the 30th Amendment to Regulation 83 are properly applied. Section 68.1(b)(1) of 11 NYCRR 68 establishes the rules to be utilized in applying the workers’ compensation fee schedules to no-fault claims. It states in part:

“However, references to workers" compensation reporting and procedural requirements in such schedules do not apply, e.g., requirements that provide for authorization to perform surgical procedures, is not applicable to no-fault. The general instructions and ground rules in the workers' compensation fee schedules apply, but those rules which refer to workers' compensation claim forms, pre-authorization approval and dispute resolution guidelines do not apply, unless specified in this Part.”

Therefore, the maximum reimbursement for prescription drugs under the No-fault system, including all brand names and generic drugs, shall be the fees set forth under the schedule for the New York State Medicaid program at the time the prescription drugs are provided, plus a dispensing fee of five dollars for generic drugs and four dollars for brand-name drugs. References in the Workers’ Compensation pharmaceutical fee schedule pertaining to pharmacy network or the substitution of brand name drugs are not applicable to No-fault benefits.

If you have any questions or comments regarding this Circular Letter, please contact:

Debra Parris, Senior Insurance Examiner
New York State Insurance Department
25 Beaver Street
New York, NY 10004
212-480-5665 or e-mail at [email protected]

Very truly yours,

Larry Levine
Assistant Deputy Superintendent &
Chief Examiner
Property Bureau