Supplement No. 1 to Insurance Circular Letter No. 9 (2021)
August 29, 2022

STATUTORY AND OTHER REFERENCES: N.Y. Insurance Law §§ 4903, 4904, and 4914; Public Health Law §§ 4903, 4904, and 4914; and Executive Orders No. 4 and 4.12

I. Purpose

On September 27, 2021, Governor Kathy Hochul issued Executive Order No. 4 (“EO 4”) to address hospital staffing shortages. EO 4, in relevant part, suspended utilization review and internal and external appeal timeframes for hospitals and the Governor has extended these suspensions with subsequent executive orders. On August 28, 2022, Governor Hochul issued Executive Order No. 4.12 (“EO 4.12”), which terminated the suspension of utilization review and internal and external appeal timeframes for hospitals. Therefore, the provisions of EO 4 regarding the suspension of utilization review and the internal and external appeal timeframes for hospitals, as extended, ended as of August 28, 2022.

The purpose of this circular letter is to advise insurers authorized to write accident and health insurance in this state, Article 43 corporations, student health plans certified pursuant to Insurance Law § 1124, municipal cooperative health benefit plans, health maintenance organizations, and prepaid health services plans (collectively “issuers”), with respect to commercial health insurance coverage, Child Health Plus, Essential Plan, and Medicaid managed care coverage, and independent agents performing utilization review under contract with such issuers, regarding the resumption of utilization review and the restarting of appeal timeframes. This circular letter supplements Insurance Circular Letter No. 9 (2021) issued on October 7, 2021.

II. Discussion

As discussed in Insurance Circular Letter No. 9 (2021), many hospitals needed to shift staff resources from administrative functions to patient care activities due to hospital staffing shortages. Insurance Law and Public Health Law §§ 4903 permit issuers to perform utilization review of health care services. Insurance Law § 4904(c) and Public Health Law § 4904(3) provide that a health care provider has a period of no less than 45 days after receipt of notice of an adverse determination to file an internal appeal with the issuer. Insurance Law § 4914(b)(1) and Public Health Law § 4914(2)(a) provide that a health care provider has 60 days to initiate an external appeal after the health care provider receives notice of a final adverse determination. In accordance with EO 4, issuers suspended preauthorization, concurrent review and, for in-network hospitals, retrospective review for inpatient and outpatient hospital services starting September 27, 2021, upon receipt of a hospital’s signed certification that such suspension was needed to increase the availability of the hospital’s health care staff. Additionally, the timeframes for a hospital to submit an internal or external appeal were tolled in accordance with EO 4.

The provisions of EO 4 that suspended utilization review for inpatient and outpatient hospital services and tolled the timeframes for a hospital to submit an internal or external appeal ended as of August 28, 2022, because EO 4.12 terminated these provisions. When resuming utilization review, issuers may, to the extent necessary, request information to perform a retrospective review, reconcile claims, and make any payment adjustments. Issuers should ensure that documentation requirements for retrospective review are reasonable, and issuers should take into consideration that hospitals may not be able to provide the typical level of documentation, or may incur delays in furnishing the requested documentation, as a result of the hospital staffing shortages. Additionally, in accordance with EO 4.12, the timeframes that had been tolled for hospitals to submit internal or external appeals are reset as of August 28, 2022. Therefore, hospitals have 45 days to submit an internal appeal or 60 days to submit an external appeal starting from August 28, 2022.

III. Conclusion

Issuers and hospitals are encouraged to continue to work together as utilization review is resumed and internal and external appeal timeframes are restarted.

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

Very truly yours,

Lisette Johnson
Chief, Health Bureau