The Office of General Counsel issued the following opinion on April 8, 2003, representing the position of the New York State Insurance Department.

Re: In-Network Provider of Non-HMO Health Plan & Subscriber Co-Payment

Questions Presented:

1. If the fees, which an in-network provider (the "Provider") charges for the medical treatment of a subscriber (the "Subscriber") of a non-profit, non-HMO1 New York health plan (the "Health Plan"), are greater than the allowances contained in such Health Plan’s listed medical fee schedule, may the Provider bill the Subscriber for the difference between the charged fees and such schedule’s allowances?

2. May the Provider require, as a precondition to treatment, the Subscriber to sign an authorization form (the "Form"), which states that the "patient is responsible for all fees regardless of any insurance coverage"?

Conclusions:

1. The Insurance Department has learned, by contacting the Subscriber’s health insurer, that the Subscriber is only responsible for remitting a co-payment to participating providers. Therefore, under the Health Plan, participating providers may not bill the Subscriber for the recoupment of fees that the Health Plan’s reimbursement to the Provider does not fully cover. Please note that the Subscriber’s Health Plan subscriber contract or certificate, or a separate written disclosure statement, should disclose all subscriber payment obligations to participating Health Plan providers.

2. The New York State Department of Health regulates the activities of health providers; therefore, the Department of Health should be contacted for an opinion regarding the legality of the Provider’s use of the Form.

Facts:

The subscriber (the "Subscriber") of a New York State authorized, non-HMO health plan (the "Health Plan"), contacted the Health Plan for the location of a participating, in-network cardiologist (the "Provider"). The Subscriber made an appointment with the Provider; and, upon arrival at the Provider’s medical office, the Provider’s office assistant (the "Assistant") presented the Subscriber with an authorization form (the "Form") for the Subscriber to sign. The Form contained the following language:

All professional services rendered are charged to the patient. The necessary forms will be completed and submitted to insurance carriers to expedite payment. The patient is responsible for all fees regardless of any insurance coverage. It is customary to pay for services when rendered unless other arrangements have been made in advance with office.

I authorize my physician at ABC Medical, P.C. to release information received, including without limitation, medical and other information to my insurance carrier and its representatives. I further authorize my insurance carrier to directly pay my physician at ABC Medical, P.C. for services rendered.

_______________                                                                          _____________

Patient Signature                                                                          Date

The Subscriber refused to sign the Form without first adding, between the second paragraph and the "Patient Signature" line, the statement: "Patient is only responsible for co-payments." The Subscriber then submitted the amended Form to the Assistant. The Assistant refused to accept the Form, and informed the Subscriber that the Provider would not treat her unless she signed and submitted an unaltered Form. The Subscriber refused to sign an unamended Form, and left the Provider’s office.

The Subscriber’s Health Plan subscriber contract (the "Contract") does not permit any participating provider to bill the Subscriber for the recoupment of fees, other than the Subscriber’s co-payment.

Analysis:

The subscriber contracts or certificates, or separate written disclosure statements, of a New York non-profit, non-HMO health plan should disclose all subscriber payment obligations to participating health plan providers. 2  With regard to the Subscriber’s personal payment obligations to the Provider, the Insurance Department has found, by contacting the Subscriber’s health insurer, that the Subscriber’s Health Plan Contract does not permit participating Health Plan providers to bill the Subscriber for the recoupment of fees, other than a co-payment, which the Health Plan’s reimbursement does not fully cover. Therefore, pursuant to the Subscriber’s Contract, the Subscriber is only responsible for the payment of a co-payment to the Provider, and may not be billed by the Provider for any Health Plan reimbursement loss.

The second question, regarding the legality of the Provider conditioning the provision of its services on the Subscriber signing the Form, is not an issue that the Insurance Department may determine. The New York State Department of Health regulates the activities of health providers; and it should be contacted for an opinion concerning the propriety of the Provider’s use of the Form.

For further information you may contact Senior Attorney Kristian Earl Lynch at the New York City Office.

1 Health Maintenance Organization.

2 Article 43 of the New York Insurance Law, N.Y. Ins. Law §§ 4301-4327 (McKinney 2000 & Sup. 2003), regulates non-profit health plans in New York State. § 4308(a) of Article 43, N.Y. Ins. Law § 4308(a) (McKinney 2003), requires such health plans to be filed with and approved by the Superintendent of Insurance as conforming to the applicable provisions of the Insurance Law.