New guidance from Department of Financial Services for 'fair & prompt' payment of health insurance claims

Insurers directed to follow new standards for settlement of claims for health care services

Guidance developed in collaboration with insurance industry & hospitals

Gov. Andrew Cuomo on Monday announced the issuance of new guidance by the Department of Financial Services alerting insurers of new protections for patients and health care providers that limit health insurance claims denials and inappropriate payment reductions or delays related to medically necessary services.

"Claim denials and payment delays for administrative reasons are the last things New Yorkers need in the middle of a public health crisis," Cuomo said. "This action speeds up access to health care for all New Yorkers and gives them some measure of peace as we continue to build back from the pandemic."

These protections outlined in the circular letter, which were included in the governor's enacted 2021 budget and became effective on Jan. 1, prohibit insurers from denying hospital claims for administrative reasons, require insurers to use national coding guidelines when reviewing hospital claims, and shorten timeframes for insurers to make medical necessity determinations.

Superintendent of Financial Services Linda A. Lacewell said, "DFS will continue to remove roadblocks to New Yorkers receiving the health care they deserve. DFS commends the insurance industry for its collaboration on today's guidance."

The circular letter advises insurers of the following new requirements:

√ Insurers must not deny a payment for medically necessary services based on a hospital's noncompliance with an insurer's administrative requirements.

√ Insurers must make a determination on a preauthorization request for inpatient rehabilitation services following an inpatient hospital admission within one business day from the receipt of necessary information.

√ Insurers must make a determination with regard to a non-expedited appeal of an adverse determination within 30 calendar days of receipt of the necessary information to conduct the appeal.

√ Insurers must not deny a preauthorized service on retrospective review using different standards than used for the preauthorization review.

√ Insurers must pay claims, submitted through the internet or electronically, within 30 days of receipt when the insurer's obligation to pay the claim is reasonably clear and, if additional information is needed, payment must be made within 15 days of a determination payment is due.
Read a copy of the circular letter on the DFS website.