Insurance Circular Letter No. 1 (2022)
January 6, 2022
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, Utilization Review Agents, and Licensed Independent Adjusters
Coronavirus and the Suspension of Certain Utilization Review Requirements
STATUTORY REFERENCES: N.Y. Insurance Law §§ 3216, 3217-d, 3221, 4303, 4306, 4902, and 4903; and N.Y. Public Health Law §§ 4403, 4902, and 4903
Coronavirus disease 2019 (“COVID-19”) cases are spiking due to the Omicron variant and continue to strain health care delivery systems. In order to be able to meet the increased demand for inpatient hospital care while facing staffing shortages, hospitals need to be ready to quickly transfer patients between hospitals and, when appropriate, discharge patients to skilled nursing facilities in order to increase bed capacity and balance patient load. Against this backdrop, existing preauthorization requirements for certain services may hinder efforts by hospitals to rapidly transfer or discharge patients.
The purpose of this circular letter is to advise insurers authorized to write accident and health insurance in this 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 with respect to commercial coverage, Child Health Plus, Essential Plan, and Medicaid managed care coverage (collectively “issuers”), independent agents performing utilization review under contracts with such issuers, and licensed independent adjusters, that they should suspend certain utilization review requirements for 30 days starting from the date of this letter, to assist hospitals with staffing and resources issues.
II. Suspension of Preauthorization Requirements for Insured Transfers Between In-Network Hospitals
Hospitals need to be able to rapidly transfer insureds to a hospital within the same hospital system or to a hospital outside their system in order to balance patient load. N.Y. Insurance Law (“Insurance Law”) and N.Y. Public Health Law (“Public Health Law”) §§ 4903 permit issuers to require preauthorization for health care services, other than emergency services. However, hospitals need flexibility to quickly transfer insureds between hospitals, either within the same hospital system or to another hospital that is in the issuer’s network, to ensure that a particular hospital experiencing a higher patient volume is not overwhelmed. Therefore, issuers should suspend preauthorization review for in-network hospital transfers for 30 days starting from the date of this letter. However, a hospital should use its best efforts to provide 48 hours’ notice to the issuer after the transfer, including information necessary for an issuer to assist in coordinating care and discharge planning.
To the extent that they have not already done so, hospitals and issuers are also encouraged to work collaboratively to resolve issues relating to payment for hospital transfers. To the extent that an issuer and hospital have a contract in place that addresses a transfer either within the hospital system or between other hospitals, the contract will govern the billing for such transfer. If an issuer does not have a contract with a hospital that addresses such transfers, the issuer and hospital should work in good faith to determine the appropriate policies and payment for the transferring or the receiving hospital, including whether the stay should be considered a short stay. In the absence of contract language providing for a transfer payment policy, payments for transfers involving Medicaid managed care insureds should be guided by Medicaid fee-for-service program policies. Issuers may review these services for medical necessity concurrently or retrospectively.
III. Suspension of Preauthorization for In-Network Inpatient Rehabilitation Services Following an Inpatient Hospital Stay
Insurance Law § 4903(b)(1) and Public Health Law § 4903(2)(a) require issuers to make a determination on a preauthorization request for inpatient rehabilitation services following an inpatient hospital admission provided by a hospital or skilled nursing facility within one business day of receipt of the necessary information. In order to enable hospitals to readily discharge insureds to lower levels of care when medically appropriate, issuers should suspend preauthorization requirements for in-network inpatient rehabilitation services following a hospital admission for 30 days starting from the date of this letter. Issuers should provide hospitals with an up-to-date list of all in-network rehabilitation facilities and skilled nursing facilities in order to facilitate such discharges. Hospitals should use their best efforts to provide notice of the discharge to the issuer within 48 hours. An issuer may require the rehabilitation facility or skilled nursing facility to provide notification of the admission to the issuer. Issuers may review inpatient rehabilitation services for medical necessity concurrently or retrospectively.
Issuers are also reminded that Insurance Law §§ 3217-d(d), 4306-c(d), and 4804(a) and Public Health Law § 4403(6) require an issuer that does not have an in-network provider, including an inpatient rehabilitation services provider, able to accept the insured, to provide access to an out-of-network provider at the in-network cost-sharing.
IV. Applicability to Medicare Advantage Plans and Third-Party Administrators of Self-Funded Plans
Adherence to this circular letter is essential to ensure that hospitals are able to handle staffing and resource issues related to COVID-19. Issuers offering Medicare Advantage plans are strongly encouraged to apply the provisions of this circular letter to such plans. In addition, third-party administrators, which are licensed by the Department as independent adjusters, are also strongly encouraged to apply the provisions of this circular letter to their administrative service arrangements with self-funded plans.
It is in the interest of all stakeholders that hospitals are able to maintain the ability to provide care for patients when dealing with staffing shortages and resource issues related to COVID-19. In order to accomplish this objective, hospitals need flexibility in the transfer and discharge of insureds. Issuers should suspend certain utilization review requirements as outlined in this circular letter so that hospitals may quickly transfer or discharge insureds, as medically appropriate.
Please direct any questions regarding this circular letter by email to [email protected].
Very truly yours,
Chief, Health Bureau