Posted yesterday to the NYS Insurance Department's website are the Office of General Counsel Opinions for April 2009. Two of the 6 posted opinions are relevant to P&C insurers doing business in New York.
Applicability of Workers' Compensation Board Directive to Durable Medical Equipment Fee Schedule in No-Fault Claims (April 6, 2009)
Question Presented:
Is the Workers’ Compensation Board’s (“WCB”) directive of July 18, 2008 concerning the inapplicability of the durable medical equipment (“DME”) fee schedule to medical providers supplying such equipment applicable to no-fault claims?
Yes, the WCB’s directive of July 18, 2008 concerning the inapplicability of the DME fee schedule to medical providers supplying such equipment is applicable to no-fault claims.
Facts:
The inquiry is of a general nature, without reference to particular facts.
Analysis:
Under New York’s “no-fault” insurance law, see Article 51 of the New York Insurance Law, a provider of health services is limited in what he can charge to an insurer by the amounts specified in the workers’ compensation fee schedules. See N.Y. Ins. Law § 5108 (McKinney 2000). Section 68.1(a) of N.Y. Comp. Codes R. & Regs. tit. 11, pt. 68 (Regulation 83) adopts certain workers’ compensation fee schedules for purposes of the no-fault law. That regulatory provision reads as follows:
The existing fee schedules prepared and established by the chairman of the Workers’ Compensation Board for industrial accidents are hereby adopted by the Superintendent of Insurance with appropriate modification so as to adapt such schedules for use pursuant to the provisions of section 5108 of the Insurance Law.
Furthermore, 11 N.Y.C.R.R. 68.1(b)(1) incorporates the grounds rules of the workers’ compensation fee schedules by providing in relevant part that “[t]he general instructions and ground rules in the workers’ compensation fee schedules apply” for purposes of no-fault billing. Thus, any charges for health services submitted to an insurer for reimbursement under the no-fault law are limited to the fee schedules and ground rules put forth by the WCB. This includes charges for DME, for which the WCB has established a fee schedule.
Injured persons typically receive DME either directly from a medical provider or from a DME supplier, as when the equipment has been prescribed by a physician. On July 18, 2008, the WCB issued a directive addressing the fee schedule for DME. The directive makes the DME fee schedule inapplicable to medical providers supplying DME, and reads in relevant part as follows:
The Durable Medical Equipment Fee Schedule does not apply to medical providers supplying durable medical equipment to injured workers as part of medical treatment described in the New York Workers’ Compensation Medical Fee Schedule. Billing and reimbursement follows the ground rules as described in the fee schedule.
The directive thus establishes a separate reimbursement system for medical providers supplying DME directly to patients, while leaving in effect the current DME fee schedule for suppliers of DME (who are not licensed medical providers) to patients.
For those medical providers, the directive states that billing and reimbursement will instead follow “the ground rules” set forth in the fee schedule. With respect to the reimbursement of medical providers, Ground Rule No. 4 of the Medical Fee Schedule reads in pertinent part as follows:
Supplies and materials provided by the physician…over and above those usually included with the office visit or other service rendered may be charged for separately…. Payment shall not exceed the invoice cost of the item.
Ground Rule No. 4 thus requires that the compensation physicians may receive for providing DME directly to patients shall not exceed the invoice cost of the item.
Since 11 N.Y.C.R.R. 68.1(b)(1) (Regulation 83) adopts the WCB’s fee schedules and ground rules for no-fault billing and reimbursement, and because physicians are excluded from the DME fee schedule, the WCB’s directive interpreting the DME fee schedule applies to charges arising from no-fault claims, in accordance with the clear intent of Insurance Law § 5108(a) to ensure that no-fault health services are reimbursed in accordance with the WCB fee schedule. Thus, the DME fee schedule applies only to DME suppliers, and not to medical providers supplying DME directly to patients, for purposes of reimbursing the cost of DME under the no-fault law.
For further information you may contact Principal Attorney Lawrence M. Fuchsberg at the New York City office.
Insurer's Obligation to Notify the Insured's Authorized Agent of the Insurer's Nonrenewal of the Policy (April 8, 2009)
Question Presented:
Does an insurer have an obligation to notify an insured's authorized agent if the insurer mails a notice of its intention not to renew a non-commercial automobile insurance policy to the named insured?
Conclusion:
Yes. Under N.Y. Ins. Law § 3425(h)(3) (McKinney Supp. 2009), if an insurer mails a notice of intention not to renew a non-commercial automobile insurance policy to the named insured, the insurer shall mail, deliver or transmit a copy of the notice to the insured's authorized agent or broker within seven days of the time the notice is mailed to the named insured.
Facts:
The inquiry is of a general nature, without reference to particular facts.
Analysis:
Insurance Law § 3425 is germane to the inquiry. The statute applies to most non-commercial automobile insurance policies other than those issued through the New York Automobile Insurance Plan. Insurance Law § 3425(a)(1) defines a "covered policy" to mean an insurance policy issued or issued for delivery in this State by an authorized insurer, on a risk located or resident in this State, and that insures against losses or liabilities arising out of the ownership, operation or use of a motor vehicle, when a natural person is the named insured.
Insurance Law § 3425(h)(3) is relevant to the inquirer’s inquiry because that provision governs an insurer's obligation to notify the insured's authorized agent or broker if the insurer mails a notice of its intention not to renew a non-commercial automobile insurance policy to the named insured. Insurance Law § 3425(h)(3) reads as follows:
(3) A copy of every notice of cancellation, reduction of limits, substitution of policy form, elimination of coverages, conditioned renewal or of intention not to renew, including the reasons therefor, or a summary of such notice, shall be mailed, delivered or transmitted to the insured's authorized agent or broker within seven days of the time such notice is mailed to the named insured. Electronic transmission or any other means of delivery or transmission of information commonly used by the insurer to communicate with agents or brokers shall be deemed sufficient for compliance with this paragraph. Failure to mail, deliver or transmit a copy of such notice to the insured's authorized agent or broker pursuant to this paragraph shall not render any such notice ineffective, provided that all of the other requirements of this section are met and shall not be considered failure to include a provision required by this section for purposes of paragraph two of this subsection. (Emphasis supplied.)
Insurance Law § 3425(h)(1), too is relevant here, because proof of mailing of a notice of intention not to renew a non-commercial automobile insurance policy constitutes sufficient proof of notice. Insurance Law § 3425(h)(1) reads as follows:
For further information, you may contact Senior Attorney Robert Freedman at the New York City office.(h) (1) Proof of mailing of a notice of cancellation, reduction of limits, substitution of policy form, elimination of coverages, conditioned renewal or of intention not to renew, or proof of the mailing of the reasons therefor, to the named insured at the address shown in the policy, shall be sufficient proof of the giving of notice and the giving of reasons required by this section.
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