The final budget bill was recently passed in New York State containing several provisions for Out-of-Network ("OON") reforms. The major changes related to OON reform include: 1) transparency provisions requiring the reestablishment of "usual, customary and reasonable" or "UCR" charges to determine reimbursement rates; 2) adding protections allowing patients to go OON for specialty care; 3) requiring insurers to "make available" OON options reimbursed at 80% UCR; 4) creating a new independent dispute resolution ("IDR") process to resolve disputed claims between insurers and providers; and 5) formation of an OON reimbursement rate workgroup to analyze the effect of the reforms. These reforms not only ensure greater patient choice and access to care, but help protect physician practices that have, for decades, struggled to be adequately reimbursed by insurers for legitimate services provided to patients OON. The following is a brief synopsis of each reform:
Reestablishment of UCR: Beginning in 2015, insurers must be transparent in regards to their rates of reimbursement for services as a percentage of UCR. UCR will be reestablished and defined as "the 80th percentile of all charges for the particular service in the same or similar specialty and same geographic area as reported in the benchmarking database maintained by FAIR Health."
Increasing OON Access and Coverage: Protections have been added, allowing patients to seek OON physicians when their network does not have providers with proper training and expertise for their treatment. Patients will have the option to purchase UCR-based OON products and may request such options from companies that issue comprehensive policies in the group market that cover OON. Such companies must "make available" at least one option for at least 80% of UCR. If no OON coverage option is available in a particular region in New York State, the Superintendent of the Department of Financial Services ("Superintendent") may require insurers selling in the group market of that region to "make available" a similar option.
Independent Dispute Resolution Process (IDR): Greater consumer protections will be enacted against "surprise medical bills." An additional "hold harmless" protection will be in place for consumers who receive care from an OON provider as a result of an emergency situation or through no fault of their own and without notice. Instead, insurers and providers will be allowed to utilize the new IDR process to dispute claims. Rulings through IDR are required to be issued within 30 days of receipt of the request for dispute, ensuring expeditious resolution for providers. To determine a reasonable fee, the IDR entity will consider factors including:
• The physician's usual charges for the same or similar services;
• Fees paid by the insurer to reimburse similarly qualified OON physicians for the same services;
• Level of training, education and experience of the physician;
• Circumstances and complexity of the particular case, including time and place of the service; individual patient characteristics; and
• The usual and customary cost of the service.
OON Reimbursement Rate Workgroup: A workgroup will be formed, aimed at improving access and adequacy of OON services and coverage options. Consisting of two physicians, two insurance representatives, and three consumers and co-chaired by the Superintendent and the Commission of the Department of Health, the workgroup will produce a findings report by January 1, 2016. The workgroup will review and make recommendations regarding the following:
• Current OON reimbursement rates used by insurers and FAIR Health's rate methodology;
• Availability and adequacy of the OON coverage in individual and small group markets in every region; and
• Prevalence of coverage based on UCR or other reimbursement methodologies, such as Medicare.