New York Passes Landmark Consumer Protections
To Prevent Surprise Medical Bills!

1 Page Summary of Bill Provisions
Full Text of Enacted Bill

Superintendent Lawsky1
Superintendent Ben Lawsky speaks at Coalition news conference, 3/28/14,
with Heidi Siegrifed of NYFAHC and Kate Breslin of Schuyler Center for Analysis and Advocacy

Cross posted from the New York Times (3/31/13)

Every year, thousands of New Yorkers find themselves responsible for a surprise medical bill from a doctor, like an anesthesiologist, who becomes involved in their care but, unbeknown to the patient, is not covered by their insurance.

Now a provision in the state budget agreement announced Saturday is intended to protect consumers by requiring that they be given a reasonable amount of notice when an out-of-network doctor will be treating them.

If they are stuck with a surprise bill, patients will be responsible only for whatever their co-pay would be if the doctor were in-network. The out-of-network doctor and the insurance company will have to hash out the bill using what is known as baseball arbitration, with each proposing a price and an arbitrator choosing one of them. The law will go into effect in one year.

“The heart of the bill came out of the fact that the No. 1 complaint on health insurance issues we receive year after year is people who get stuck with surprise balance bills,” Benjamin Lawsky, superintendent of the state’s Financial Services Department, which regulates insurance, said on Sunday.

Usually the doctors involved are not the primary physician whom the patient has come to know but a radiologist, pathologist or anesthesiologist involved in a procedure, like surgery or colonoscopy. Sometimes, patients make it to the operating table before they learn that the out-of-network doctor is involved in the operation.

Insurance plans typically either do not permit patients to go to doctors out of their prescribed network, or charge more when they do. Mr. Lawsky said that patients with plans restricting them to in-network doctors tend to be the patients who are most cost-conscious and can least afford surprise bills.

He said his department got several thousand complaints a year but suggested that many more people had the problem but did not complain.

“We think this is potentially a national model,” Mr. Lawsky said. “These surprise balance bills are very prevalent around the country.”

The bill was widely supported by consumer advocates and organizations like the American Cancer Society, as cancer patients are often saddled with such bills.

“It’s a huge cause of credit problems and consumer bankruptcy,” Mark Scherzer, a consumer advocate, said.

The law would be the toughest in the nation, said Chuck Bell, program director of Consumers Union, the nonprofit that publishes Consumer Reports.

One patient affected by the old system was Claudia Knafo, a concert pianist from the Upper West Side of Manhattan who needed spinal surgery. Ms. Knafo said she carefully researched which surgeon to choose, and chose one at her usual hospital. He listed her insurance plan on the hospital website and a patient coordinator confirmed the coverage, she said. After the surgery, the insurance company told her that the doctor had dropped her plan in 1997. She received a bill for $101,000, and her insurance paid only $3,500, leaving her with a $97,000 surprise balance.

Ms. Knafo considered bankruptcy and divorce before the state attorney general and Mr. Lawsky interceded and she was let off the hook.

“Our lives were really consumed by this,” she said on Sunday. Two years later, she added, “I still sometimes have nightmares that it’s not resolved.”

A version of this article appears in print on March 31, 2014, on page A19 of the New York edition with the headline: State Curbs Medical Bills Containing Surprises.


Coalition Statements Congratulating Gov. Cuomo and the Legislative Leaders (March 30, 2014)

AARP – Statement from Beth Finkel, NY State Director

“Too often, New York patients are billed for services outside of their network that they didn’t choose or know they would be receiving, particularly in emergency situations.  For older patients, the unexpected bills can break their delicate kitchen table economies.  AARP commends the Governor for his leadership in tackling this crucial health care issue and moving to protect New Yorkers from surprise medical bills that could break the bank.  This legislation is much needed in New York.  We thank Governor Cuomo for proposing it and the Legislature for supporting it as part of the final state budget.”

Consumers Union — Statement from Chuck Bell, Programs Director

“Consumers Union commends Gov. Andrew Cuomo and legislative leaders for enacting strong consumer protections against surprise out-of-network medical bills, as part of the state budget.    These comprehensive, carefully-formulated provisions are a huge step forward for preventing unexpected medical bills, which put significant financial and psychological strain on New York patients and their families.”

“Through this action, New York State is leading the nation by enacting the toughest state consumer protections in the country against surprise medical bills.   Gov. Cuomo’s plan creates a comprehensive, efficient framework for improving network adequacy, improving consumer information, and quickly resolving surprise bills when they do occur.  The approved legislation features an independent arbitration process to ensure that billing disputes are quickly resolved, and that the consumer is removed from the center of the dispute.   This aribitration process and hold harmless provisions protect consumers from unnecessary debt and collections processes, and from being ensnared in protracted arguments between insurance companies and providers. ”

Health Care for All New York — Statement from Elisabeth Benjamin, Community Service Society

Health Care For All New York (HCFANY), a coalition of more than 160 consumer advocacy organizations dedicated to achieving quality affordable health coverage for all New Yorkers, congratulates the Governor Cuomo and the New York State Legislature for enacting landmark legislation that will New Yorkers from “surprise” medical bills.

Surprise medical bills have harmed thousands of New York individual and families for years. Surprise medical bills arise when a consumer is treated by an out-of-network provider without their knowledge, for example for surgery provided after an emergency admission. Surprise out-of-network bills lead to medical debt, which is associated with nearly two-thirds of American personal bankruptcies. The new law contains a critical element that holds consumers harmless in surprise billing situations by taking them out-of-the-middle of billing disputes between providers and insurance plans. The legislation also ensures that medical providers and insurance carriers can quickly and efficiently resolve out-of-network billing disputes, leading to a more efficiently run health care system.

HCFANY lauds Governor Cuomo, Superintendent of Financial Services Benjamin J. Lawsky and Deputy Superintendent Troy Oechsner as well as the leadership of the State Assembly and Senate for their leadership in ensuring New Yorkers enjoy amongst the best insurance protections in the nation.

New Yorkers for Accessible Health Coverage — Statement from Heidi Siegfried, Executive Director

“New Yorkers for Accessible Health Coverage (NYFAHC), a statewide coalition of 53 voluntary health organizations and allied groups who serve and represent people with chronic illnesses and disabilities, thanks the legislature and Governor for reaching agreement on comprehensive legislation that will protect consumers from surprise medical bills. ”

“Too many New Yorkers with serious illnesses and disabilities have faced surprise out-of-network medical bills that have threatened them with bankruptcy.  This legislation has been carefully developed to create stronger standards for network adequacy, better upfront information about out-of-network providers and reimbursement levels, expansion of consumer appeal rights for treatment decisions, and independent arbitration when the health plan and provider can’t agree on how much is to be paid.”

1 Page Bill Summary

Full Text of Enacted Bill
S 2914 & A 2905 Part H

*Important note:  The new New York State out-of-network consumer protections do not take effect until 2016, because it will take some time to write and implement the new rules for preventing surprise bills, and communicate them to the health plans and providers, and establish the independent dispute resolution process.

However, the providers and health plans do know these changes are coming, so that should give them a strong incentive to provide good information and assistance for avoiding unnecessary out-of-network expenses.

In the mean time, if you have problems with a surprise medical bill, you can contact the New York State Department of Financial Services (http://www.dfs.ny.gov/consumer/fileacomplaint.htm or 1 (800) 342-3736) , the New York Attorney General (http://www.ag.ny.gov/bureau/health-care-bureau or 1-800-428-9071), or Community Health Advocates (http://www.communityhealthadvocates.org/ or 1-888-614-5400)
Visit www.FairHealthConsumer.org to look up information about specific rates for out-of-network reimbursement, and to compare the Usual and Customary Rate to the Medicare Rate.
We will post more information about the new law on this site, as it becomes available.  You can also visit out Get Help page for additional resources.