Insurance Circular Letter No. 11 (2021): The No Surprises Act and Ensuring Continuity of Care During Transitional Periods

Insurance Circular Letter No. 11 (2021)

December 22, 2021

TO:

All Insurers Authorized to Write Accident and Health Insurance in New York State, Article 43 Corporations, Health Maintenance Organizations, Student Health Plans Certified Pursuant to Insurance Law § 1124, Municipal Cooperative Health Benefit Plans, Prepaid Health Services Plans, and Health Care Providers and Facilities

RE:

The No Surprises Act and Ensuring Continuity of Care During Transitional Periods

STATUTORY AND REGULATORY REFERENCES: N.Y. Insurance Law §§ 3217-b(i), 3217-d(c), 4306-c(c), 4325(j), 4804(e) and (f); N.Y. Public Health Law § 4403(6)(e) and (f), and 4406-c(5-d); No Surprises Act (Pub. L. No. 116-260, 134 Stat. 1182, Division BB § 109); 42 U.S.C. § 300gg et. seq.; 86 FR 36872; 11 NYCRR Part 52 (Insurance Regulation 62)

I. Purpose

The purpose of this circular letter is to provide guidance to insurers authorized to write accident and health insurance in New York State, Article 43 corporations, health maintenance organizations, student health plans certified pursuant to Insurance Law § 1124, municipal cooperative health benefit plans, and prepaid health services plans (collectively, “issuers”), and health care providers and facilities (collectively, “providers”), regarding the continuity of care requirements in the federal No Surprises Act (“NSA”) and New York’s continuity of care provisions in Insurance Law §§ 3217-d(c), 4306-c(c), 4804(e) and (f) and Public Health Law § 4403(6)(e) and (f) with respect to comprehensive health insurance coverage.

II. Background

The NSA was signed into law as part of the Consolidated Appropriations Act of 2021 (Public Law 116-260; Division BB § 109) on December 27, 2020 and applies with respect to plan years beginning on or after January 1, 2022. NSA § 113 amends 42 U.S.C. § 300gg et seq. to ensure continuity of care for insureds who are “continuing care patients” for 90 days when contract or benefit terminations affect provider network status or benefits.

On July 1, 2021, the U.S. Department of Health and Human Services, the U.S. Department of Labor, the U.S. Department of the Treasury, and the U.S. Office of Personnel Management (collectively, the “federal departments”) released an interim final rule (“IFR”) with respect to the NSA, titled “Requirements Related to Surprise Billing; Part 1”.¹ The IFR indicates that the federal departments intend to undertake rulemaking to fully implement certain sections of the NSA, including Section 113 on continuity of care, after January 1, 2022. The IFR states that until rulemaking to fully implement the provisions is finalized and effective, issuers are expected to implement the requirements of the NSA using a good faith, reasonable interpretation, with regard to continuity of care.

New York’s continuity of care provisions in Insurance Law §§ 3217-d(c), 4306-c(c), and 4804(e) and Public Health Law § 4403(6)(e) permit an insured receiving an ongoing course of treatment to continue the treatment for 90 days when a provider leaves the issuer’s network. While the NSA continuity of care protections are similar to the New York protections, there are differences in the NSA that expand the New York protections in certain circumstances as described below.

III. Discussion

Insured’s Right to Transitional Care
Under the NSA, continuity of care applies when an insured is a “continuing care patient.” NSA § 113 amends 42 U.S.C. § 300gg-113(b)(1) to define a “continuing care patient” as an individual who, with respect to a provider, is: (1) undergoing a course of treatment for a “serious and complex condition”; (2) undergoing a course of institutional or inpatient care; (3) scheduled to undergo nonelective surgery, including receipt of postoperative care with respect to such a surgery; (4) pregnant and undergoing a course of treatment for the pregnancy; or (5) terminally ill (as determined under Social Security Act § 1861(dd)(3)(A)) and receiving treatment for such illness. A “serious and complex condition” is defined, in the case of an acute illness, as a condition that is serious enough to require specialized medical treatment to avoid the reasonable possibility of death or permanent harm; or in the case of a chronic illness or condition, as a condition that is life-threatening, degenerative, potentially disabling, or congenital and requires specialized medical care over a prolonged period of time. See 42 U.S.C § 300gg-113(b)(2).

New York’s continuity of care provisions in Insurance Law §§ 3217-d(c), 4306-c(c), and 4804(e) and Public Health Law § 4403(6)(e) apply to insureds who are receiving an ongoing course of treatment from a provider who leaves the issuer’s network.² These provisions do not require an insured to have a serious and complex condition. New York’s continuity of care provisions also apply if the insured has entered the second trimester of pregnancy at the time of the provider’s disaffiliation, and the transitional period includes the provision of post-partum care directly related to the delivery, which could extend beyond 90 days.

To implement the expansion of the continuity of care rights introduced by the NSA, issuers must cover transitional care for 90 days when an insured is pregnant and undergoing a course of treatment for the pregnancy, without a requirement that the pregnancy be in the second trimester at the time of the provider’s disaffiliation or termination. The transitional period must also include the provision of post-partum care directly related to the delivery, which could extend beyond 90 days, pursuant to the existing requirements in the Insurance Law and Public Health Law. When an insured does not qualify as a continuing care patient under the NSA, but is receiving an ongoing course of treatment from the provider when the provider leaves the issuer’s network, the issuer must provide a right to transitional care for that course of treatment for up to 90 days pursuant to the existing requirements in the Insurance Law and Public Health Law.
Insured’s Election of Transitional Care
The NSA states that an issuer must provide the insured with the opportunity to notify the issuer of the insured’s need for transitional care and permit the insured to make an election for transitional care. See 42 U.S.C § 300gg-113(a)(2)(B) and (C). Insurance Law §§ 3217-d(c), 4306-c(c), and 4804(e) and Public Health Law § 4403(6)(e) do not require the insured to notify the issuer of the need for transitional care. Therefore, the issuer must still cover transitional care regardless of whether the insured has notified the issuer of the need for transitional care.
Services Covered During Transitional Care
The NSA states that an issuer must provide the insured’s transitional benefits under the same terms and conditions that would have applied and with respect to such items and services that would have been covered had the termination not occurred, with respect to the course of treatment furnished by such provider relating to the insured’s status as a continuing care patient. See 42 U.S.C § 300gg-113(a)(2). The Insurance Law and Public Health Law do not include this explicit language; however, because the insured remains covered under the same policy, New York law also requires that an issuer provide transitional benefits under the same terms and conditions that would have applied and with respect to such items and services that would have been covered had the termination not occurred, consistent with the requirements of the NSA.
Provider Reimbursement Requirements
NSA § 718 adds new 42 U.S.C. § 300gg-138, which expands the continuity of care protections by clarifying that a provider must accept, as payment in full, payment from an issuer and cost-sharing from an insured under the same terms and conditions that would have applied had such termination not occurred. This section of the NSA also states that providers must continue to adhere to all policies, procedures, and quality standards imposed by the issuer with respect to the insured and such items and services in the same manner as if such termination had not occurred.

By contrast, New York’s continuity of care provisions set forth in Insurance Law § 4804(e)(2) and Public Health Law § 4403(6)(e)(2) apply only if the provider agrees to: (1) continue to accept reimbursement from the issuer at the rates applicable prior to the start of the transitional period as payment in full; (2) adhere to the issuer’s quality assurance requirements and to give to the issuer necessary medical information related to such care; and (3) otherwise adhere to the issuer’s policies and procedures including, but not limited to, procedures regarding referrals and obtaining pre-authorization and a treatment plan approved by the issuer.

Reading the NSA with the Insurance Law and Public Health Law, providers who or that render transitional care to an insured must accept reimbursement from the issuer at the rates applicable prior to the start of the transitional period as payment in full, except for the insured’s in-network cost-sharing. In addition, providers who or that render transitional care to an insured must adhere to all policies, procedures, and quality standards, imposed by the issuer with respect to the insured and such items and services in the same manner as if the termination had not occurred. Issuers should make their participating providers aware of the new NSA requirements related to acceptance of payment and adherence to policies, procedures and quality standards, where applicable, and should include these requirements in their contracts with their participating providers.
Issuer Notice Requirements and 90-Day Timeframe
NSA § 113 provides that an issuer must notify, on a timely basis, at the time of a termination, each enrolled insured who is a continuing care patient of a termination affecting a provider. The issuer also must give the insured an opportunity to notify the issuer of the insured’s need for transitional care and permit transitional care during the period beginning on the date on which the issuer provides the notice and ending on the earlier of the 90-day period beginning on such date, or the date in which the insured is no longer a continuing care patient with respect to the provider. See 42 U.S.C § 300gg-113(a)(2)(C). The NSA’s reference to notification “at the time of a termination” suggests that notification of the termination should coincide with the actual termination so that the 90-day transitional period coincides with the termination.

New York Insurance Law §§ 3217-d(c), 4306-c(c), and 4804(e) and Public Health Law § 4403(6)(e) provide for transitional care for up to 90 days from the date of notice to the insured of the provider’s disaffiliation from the issuer’s network. Prior to the enactment of the NSA, questions arose as to when the 90-day period commenced in New York and whether an issuer could notify insureds of the provider’s impending disaffiliation 90 days in advance thereby eliminating the transitional care period. Notice of a disaffiliation that far in advance of the provider’s termination circumvents the protections for the insured to receive transitional care “when an insured’s provider leaves the insurer’s in-network benefits portion of its network” under the Insurance Law and Public Health Law. When reading the requirements of the NSA with the requirements of the Insurance Law and the Public Health law, issuers should provide notice to insureds of the disaffiliation in a timely manner. The New York State Department of Financial Services (“DFS”) and the New York State Department of Health (“DOH”) consider notice 30 days prior to the termination to be timely. However, the 90-day period for transitional care should run from the date of the termination.
When Transitional Care Does Not Apply
The NSA provides that an insured who is a continuing care patient has a right to transitional care when the contractual relationship between the issuer and the provider is terminated, including the expiration or nonrenewal of a contract, or when the benefits provided under such insurance coverage with respect to such provider are terminated because of a change in the terms of the participation of the provider in such coverage. See 42 U.S.C § 300gg-113(a)(1)(A) and (B). However, the continuity of care requirements do not apply if the contract was terminated due to the provider’s failure to meet applicable quality standards or due to fraud.

Insurance Law §§ 3217-d(c), 4306-c(c), and 4804(e) and Public Health Law § 4403(6)(e) do not apply if the insured’s health care provider leaves the issuer’s network due to imminent harm to patient care, a determination of fraud, or a final disciplinary action by a state licensing board or other governmental agency that impairs the health care professional’s ability to practice.

If there are situations when an insured would not be eligible for transitional care under the NSA because of the reasons for the provider’s termination, but would be eligible for transitional care under the Insurance Law or Public Health Law, an issuer still must give the insured the right to 90 days of transitional care, including through post-partum care directly related to the delivery.
Cooling-Off Period for Hospital Services
Insurance Law §§ 3217-b(i) and 4325(j), and Public Health Law § 4406-c(5-d) provide that if a contract between an issuer and a hospital is not renewed or is terminated by either party, the parties must continue to abide by the terms of such contract, including reimbursement terms, for a period of two months from the effective date of termination or, in the case of a non-renewal, from the end of the contract period. Issuers must provide notice to all insureds potentially affected by such termination or non-renewal within 15 days after commencement of the two-month period. The Commissioner of Health may waive the two-month period upon the request of either party to a contract that is being terminated for cause. However, these requirements do not apply when both parties mutually agree in writing to the termination or non-renewal and the issuer provides notice to insureds at least 30 days in advance of the date of contract termination.

The NSA requirements for a 90-day period for transitional care do not provide for a mutual agreement to waive the protections and further require health care facilities (including hospitals) to accept payment from the issuer and cost-sharing from the insured under the same terms and conditions that would have applied had such termination not occurred. Given the NSA requirements, in situations when an issuer and hospital mutually agree in writing to a termination or non-renewal of a contract, insureds must still be provided a 90-day period for transitional care and the hospital must accept payment from the issuer and cost-sharing from the insured under the same terms and conditions that would have applied had such termination not occurred.
Benefits Following Termination of a Group Policy
The NSA states that an insured who is a continuing care patient has a right to transitional care for 90 days when the insured is covered by a group health insurance policy and the contract between the group and the issuer offering the insurance coverage is terminated, resulting in the loss of benefits with respect to the provider. See 42 U.S.C § 300gg-113(a)(1)(C). The New York Insurance Law and regulation include requirements for an extension of benefits when health insurance coverage terminates and, along with the Public Health Law, also impose obligations on issuers when a new insured’s provider does not participate in the issuer’s network. 11 NYCRR § 52.18(b)(4) provides an extension of benefits for termination of a group health insurance policy, whether due to termination of employment, termination of eligibility, or termination of the policy, during a period of the insured’s total disability, for hospital confinements commencing or surgery performed during the next 31 days for the injury, sickness, or pregnancy causing the total disability.³

Insurance Law §§ 3217-d(c), 4306-c(c), and 4804(f) and Public Health Law § 4403(6)(f) impose obligations on issuers when a new insured’s provider is not a member of the issuer’s network. Specifically, these sections require an issuer to permit an insured to continue an ongoing course of treatment with the insured’s current provider during a transitional period of up to 60 days from the effective date of enrollment, if: (1) the insured has a life-threatening disease or condition or a degenerative and disabling disease or condition; or (2) the insured has entered the second trimester of pregnancy at the effective date of enrollment, in which case the transitional period must include the provision of post-partum care directly related to the delivery. If an insured elects to continue to receive care from such provider, the issuer must authorize such care for the transitional period if the provider agrees to: (1) accept reimbursement from the issuer at rates established by the issuer as payment in full; (2) adhere to the issuer’s quality assurance requirements and provide the issuer necessary medical information related to such care; and (3) otherwise adhere to the issuer’s policies and procedures including, but not limited to, procedures regarding referrals and obtaining pre-authorization and a treatment plan approved by the issuer.

DFS has received questions as to whether the NSA mandates that issuers provide a 90-day extension of benefits for insureds when the contract between the group and the issuer offering health insurance coverage is terminated and, if so, whether that obligation ends when an insured obtains replacement coverage that includes benefits with the same participating provider. DFS has forwarded those questions to the Centers for Medicare and Medicaid Services (“CMS”). In the interim, CMS has generally advised issuers that CMS will be issuing guidance on the transitional care requirements in 2022. The IFR advised issuers that until such time, they should make a good faith, reasonable interpretation in providing transitional care rights when a contract between a group and issuer offering health insurance coverage to such group is terminated, resulting in the loss of benefits with respect to the provider. DFS finds it reasonable to interpret this NSA provision as requiring a 90-day extension of benefits with respect to treatment furnished by a provider for insureds who meet the NSA definition of a “continuing care patient” when the contract between the group and issuer has been terminated, resulting in a loss of benefits provided under the group health insurance policy with respect to the provider. DFS will evaluate whether further guidance is necessary once CMS issues guidance. Issuers are further reminded that they must also comply with the New York extension of benefit requirements when group health insurance coverage terminates and the New York transitional care requirements when a new insured’s provider does not participate in the issuer’s network.

IV. Conclusion

DFS expects issuers and providers to fully cooperate in implementing the expansion of coverage for transitional care introduced by the NSA. This includes the provisions of the NSA that require issuers to cover continuing care when an insured is pregnant and undergoing a course of treatment for the pregnancy, without the requirement that the pregnancy be in the second trimester at the time of the provider’s disaffiliation or termination, as applicable. Also, issuers should educate their participating providers regarding their obligations under the NSA to accept payments related to continuing care, as described above.

Additionally, issuers are reminded that they must continue to comply with New York’s continuity of care requirements when the protections are more expansive than the protections afforded under the NSA. Specifically, when insureds do not qualify as continuing care patients under the NSA, but are in an ongoing course of treatment with the provider when the provider leaves the issuer’s network, issuers are reminded that the insured has a right to continuity of care pursuant to the Insurance Law and the Public Health Law. When services relate to continuity of care for a pregnant insured, coverage should be provided for a transitional period that includes the provision of post-partum care directly related to the delivery.

Issuers should review the continuity of care provisions in the NSA, and the continuity of care and extension of benefits requirements in the Insurance Law and the Public Health Law, to ensure compliance with both the state and federal requirements. Issuers are expected to implement the requirements of the NSA using a good faith, reasonable interpretation with regard to the right to transitional care as described in this circular letter.

Please direct any questions regarding this circular letter by email to [email protected].

Very truly yours,

Lisette Johnson
Chief, Health Bureau

¹ 86 FR 36872.

² The continuing care requirements in Insurance Law § 4804(e) and Public Health Law § 4403(6)(e) use the term “provider,” which Insurance Law Article 48 and Public Health Law Article 44 do not define and which is broader than the term “health care professional” that is defined in Insurance Law § 4803(h) and Public Health Law § 4406-d(9) as “a health care professional licensed, registered, or certified pursuant to Education Law Title 8.” The plain meaning of the term “provider” in Insurance Law § 4804(e) and Public Health Law § 4403(6)(e) is not limited to “health care professionals” and therefore includes facilities.

³ 11 NYCRR § 52.18(b)(5) also provides with respect to group health insurance coverage that when a health insurance policy is terminated by reason of termination of active employment, an issuer must provide an extended benefit during total disability, with respect to the sickness, injury, or pregnancy that caused the disability, of at least 12 months subsequent to the termination of insurance unless coverage is afforded for the total disability under another group insurance policy.