Section 3224-B. Rules relating to the processing of health claims and overpayments to physicians

(a) Processing of health care  claims.  This  subsection  is  intended  to  provide  uniformity and consistency in the
  reporting of medical services and  procedures  as  they  relate  to  the
  processing  of  health  care  claims  and  is  not  intended  to dictate
  reimbursement policy.
    (1) For purposes of this section, a "health plan" shall be defined  as
  an  insurer  that is licensed to write accident and health insurance, or
  that is licensed pursuant to article forty-three of this chapter  or  is
  certified pursuant to article forty-four of the public health law.
    (2) Subject to the provisions of paragraph three of this subsection, a
  health  plan shall accept and initiate the processing of all health care
  claims submitted by a physician pursuant  to  and  consistent  with  the
  current version of the American medical association's current procedural
  terminology  (CPT)  codes,  reporting guidelines and conventions and the
  centers for medicare and medicaid services healthcare  common  procedure
  coding system (HCPCS).
    (3)  Nothing  in  this  section  shall  preclude  a  health  plan from
  determining that any such claim is not eligible for payment, in full  or
  in part, based on a determination that: (i) the claim is not complete as
  defined  by  11  NYCRR  217;  (ii) the service provided is not a covered
  benefit under the contract or agreement, including but not limited to, a
  determination that  such  service  is  not  medically  necessary  or  is
  experimental  or  investigational;  (iii)  the  insured did not obtain a
  referral, pre-certification or satisfy any other condition precedent  to
  receive  covered  benefits  from the physician; (iv) the covered benefit
  exceeds the benefit limits of the contract or agreement; (v) the  person
  is  not  eligible  for  coverage  or is otherwise not compliant with the
  terms and conditions of his  or  her  contract;  (vi)  another  insurer,
  corporation  or  organization is liable for all or part of the claim; or
  (vii) the plan  has  a  reasonable  suspicion  of  fraud  or  abuse.  In
  addition,  nothing  in  this section shall be deemed to require a health
  plan to pay or reimburse a claim, in full or in  part,  or  dictate  the
  amount of a claim to be paid by a health plan to a physician.
    (4) Every health plan shall publish on its provider website and in its
  provider  newsletter  the  name  of  the  commercially  available claims
  editing  software  product  that  the  health  plan  utilizes  and   any
  significant edits, as determined by the health plan, added to the claims
  software  product  after  the  effective date of this section, which are
  made at the request of the health  plan.  The  health  plan  shall  also
  provide  such information upon the written request of a physician who is
  a participating physician in the health plan's provider network.
    * (b)  Overpayments  to  physicians.  (1)  Other  than  recovery   for
  duplicate  payments,  a  health  plan  shall provide thirty days written
  notice to physicians before engaging in additional overpayment  recovery
  efforts   seeking   recovery  of  the  overpayment  of  claims  to  such
  physicians. Such notice shall state  the  patient  name,  service  date,
  payment   amount,   proposed   adjustment,  and  a  reasonably  specific
  explanation of the proposed adjustment.
    (2) A health plan shall not initiate overpayment recovery efforts more
  than twenty-four months after the original payment  was  received  by  a
  physician.  Provided,  however,  that  no such time limit shall apply to
  overpayment recovery efforts which are: (i) based on a reasonable belief
  of fraud or other  intentional  misconduct,  or  abusive  billing,  (ii)
  required  by,  or  initiated  at the request of, a self-insured plan, or
  (iii) required by a state or federal government program. Notwithstanding
  the aforementioned time limitations,  in  the  event  that  a  physician
  asserts  that  a health plan has underpaid a claim or claims, the health

  plan may defend or set off  such  assertion  of  underpayment  based  on
  overpayments  going back in time as far as the claimed underpayment. For
  purposes of this paragraph, "abusive billing"  shall  be  defined  as  a
  billing  practice which results in the submission of claims that are not
  consistent with sound fiscal, business, or medical practices and at such
  frequency and for such a period of  time  as  to  reflect  a  consistent
  course of conduct.
    (3)  Nothing  in  this  section  shall be deemed to limit an insurer's
  right to pursue recovery of overpayments  that  occurred  prior  to  the
  effective  date  of  this  section  where  the  insurer has provided the
  physician with notice of such recovery efforts prior  to  the  effective
  date of this section.
    * NB Effective until January 1, 2010
    * (b)  Overpayments  to health care providers. (1) Other than recovery
  for duplicate payments, a health plan shall provide thirty days  written
  notice   to   health   care  providers  before  engaging  in  additional
  overpayment recovery efforts seeking  recovery  of  the  overpayment  of
  claims  to  such  health  care  providers.  Such  notice shall state the
  patient name, service date, payment amount, proposed adjustment,  and  a
  reasonably specific explanation of the proposed adjustment.
    (2)  A  health  plan  shall  provide  a  health care provider with the
  opportunity to challenge an overpayment recovery, including the  sharing
  of   claims  information,  and  shall  establish  written  policies  and
  procedures  for  health  care  providers  to  follow  to  challenge   an
  overpayment  recovery.  Such  challenge  shall  set  forth  the specific
  grounds on which the provider is challenging the overpayment recovery.
    (3) A health plan shall not initiate overpayment recovery efforts more
  than twenty-four months after the original payment  was  received  by  a
  health  care  provider.  However,  no  such  time  limit  shall apply to
  overpayment recovery efforts that are: (i) based on a reasonable  belief
  of  fraud  or  other  intentional  misconduct,  or abusive billing, (ii)
  required by, or initiated at the request of,  a  self-insured  plan,  or
  (iii) required or authorized by a state or federal government program or
  coverage that is provided by this state or a municipality thereof to its
  respective   employees,   retirees   or   members.  Notwithstanding  the
  aforementioned time  limitations,  in  the  event  that  a  health  care
  provider asserts that a health plan has underpaid a claim or claims, the
  health  plan  may defend or set off such assertion of underpayment based
  on overpayments going back in time as far as the  claimed  underpayment.
  For  purposes of this paragraph, "abusive billing" shall be defined as a
  billing practice which results in the submission of claims that are  not
  consistent with sound fiscal, business, or medical practices and at such
  frequency  and  for  such  a  period  of time as to reflect a consistent
  course of conduct.
    (4) For  the  purposes  of  this  subsection  the  term  "health  care
  provider" shall mean an entity licensed or certified pursuant to article
  twenty-eight,  thirty-six  or forty of the public health law, a facility
  licensed pursuant to article nineteen, thirty-one or thirty-two  of  the
  mental  hygiene  law, or a health care professional licensed, registered
  or certified pursuant to title eight of the education law.
    (5) Nothing in this section shall be deemed to limit a  health  plan's
  right  to  pursue  recovery  of  overpayments that occurred prior to the
  effective date of this section where the health plan  has  provided  the
  health  care  provider with notice of such recovery efforts prior to the
  effective date of this section.
    * NB Effective January 1, 2010