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![]() ![]() The Circular Letter also clarifies that a denial prompted by the hospital’s failure to timely provide clinical documentation by a particular deadline is prohibited. ![]() ![]() There are exceptions in the applicable statutes to this requirement related to fraudulent or abusive billing practices, denials required by state or federal coverage, claims not submitted timely, duplicate claims, uncovered services, repeated failure of the hospital to obtain prior authorizations, claims for services for which prior authorization was denied, and requirements imposed by state or federal laws, rules, or regulations. ![]() The laws have also been revised to reduce the maximum penalty in the contract for failure to follow administrative requirements, including failure to timely notify the insurer/MCO, to 7.5 percent of the payment amount for services provided. Any timely notification requirement must, however, allow for “reasonable extensions of time” for services provided on weekends and federal holidays. Hospitals and insurers/MCOs may still agree in contracts to administrative requirements, including timely notification by the hospital of the provision of medically necessary inpatient services, observation services, or emergency department services (in the same manner the statutes previously permitted provisions for timely notification for inpatient services resulting from an emergency department admission). In 2020, New York Insurance Law §§ 3217-b(j)(1) and 4325(k)(1) as well as Public Health Law § 4406-c(8)(a) were amended to prohibit insurers and managed care organizations (“MCOs”) from denying payment by contract, written policy, or procedure, or by any other means, to a hospital for medically necessary inpatient services, observation services, and emergency department services solely for failure of the hospital to comply with administrative requirements. Prohibition on Administrative Denials in Inpatient Settings Some of these changes, such as prohibitions on administrative denials, will have an immediate effect on payors and providers, and may play a role in future negotiations between payors and providers. The clarifications of existing policies do not stake any new positions but do demonstrate areas in which DFS has taken an interest. The Circular Letter explains various changes to statutes that are generally friendly to providers, and particularly inpatient facilities. All changes discussed in the Circular Letter apply to services performed on or after January 1, 2021. These changes relate to commercial and Medicaid products in New York they do not affect Medicare Advantage and self-funded plans governed by the Employee Retirement Income Security Act (or “ERISA”). In addition to covering statutory changes, the Circular Letter clarifies the DFS’s positions on when down-coding requires a utilization review determination and on the subsequent denial of a claim that had received pre-authorization. More specifically, the Circular Letter summarizes a host of important statutory changes relating to common managed care issues, including administrative denials, utilization review, coding, and denials of pre-authorized services. 4 (“Circular Letter”), which both explains modifications to the Insurance Law and the Public Health Law brought about by statutory changes in 2021 and sets forth two policy statements by DFS. On March 10, 2021, the New York State Department of Financial Services (“DFS”) issued Insurance Circular Letter No. The Gig Economy and Contractor Classification.Privacy, Cybersecurity & Data Asset Management.Employment, Labor & Workforce Management. ![]()
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