Bill Text: NY S03590 | 2023-2024 | General Assembly | Introduced
Bill Title: Enacts the "Automobile Insurance Fraud Prevention Act"; relates to claims and medical treatment arising out of motor vehicle accidents.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2024-01-03 - REFERRED TO INSURANCE [S03590 Detail]
Download: New_York-2023-S03590-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 3590 2023-2024 Regular Sessions IN SENATE February 1, 2023 ___________ Introduced by Sen. BRESLIN -- read twice and ordered printed, and when printed to be committed to the Committee on Insurance AN ACT to amend the insurance law, in relation to enacting the "automo- bile insurance fraud prevention act of 2023" The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. This act shall be known and may be cited as the "automobile 2 insurance fraud prevention act of 2023". 3 § 2. Section 5106 of the insurance law, subsection (b) as amended by 4 chapter 452 of the laws of 2005, subsection (d) as amended by section 8 5 of part AAA of chapter 59 of the laws of 2017, and paragraph 2 of 6 subsection (d) as amended by chapter 129 of the laws of 2022, is amended 7 to read as follows: 8 § 5106. Fair claims settlement. (a) (1) Payments of first party bene- 9 fits and additional first party benefits shall be made as the loss is 10 incurred. Such benefits are overdue if not paid within thirty days 11 after the claimant supplies proof of the fact and amount of loss 12 sustained. If proof is not supplied as to the entire claim, the amount 13 which is supported by proof is overdue if not paid within thirty days 14 after such proof is supplied. All overdue payments shall bear interest 15 at the rate of two percent per month. If a valid claim or portion was 16 overdue, the claimant shall also be entitled to recover his attorney's 17 reasonable fee, for services necessarily performed in connection with 18 securing payment of the overdue claim, subject to limitations promulgat- 19 ed by the superintendent in regulations. 20 (2) The failure to issue a denial of a claim within thirty days shall 21 not preclude the insurer or self-insurer from presenting evidence to 22 establish that (A) the services or items billed for in a claim were not 23 provided; (B) certain portions of the charges for services in a claim 24 exceed, by more than ten percent, the charges permissible under sched- 25 ules prepared and established pursuant to subsections (a) and (b) of EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD08593-01-3S. 3590 2 1 section five thousand one hundred eight of this article; or (C) the 2 event from which the claim arose was based upon an intent to defraud an 3 insurer or self-insurer. Nothing contained in this paragraph shall 4 preclude an insurer from contesting the existence of applicable insur- 5 ance coverage for the loss claimed. 6 (3) An insurer may deny a claim on the basis of lack of medical neces- 7 sity not later than sixty days after the date upon which the claim 8 became overdue. Any denial of a claim which is based upon a lack of 9 medical necessity shall be based upon review by a licensed provider who 10 typically diagnoses and provides treatment for the condition under 11 review, or typically provides the health care service or treatment under 12 review. Copies of all reports prepared by a health care provider who 13 examines a claimant at the request of an insurer or reviews a claim for 14 medical benefits at the request of an insurer shall be provided to the 15 claimant, the claimant's attorney and the claimant's treating health 16 care provider within thirty business days of such examination or review. 17 (b) [Every insurer shall provide a] (1) A claimant [with] shall have 18 the option of submitting any dispute involving the insurer's liability 19 to pay first party benefits, or additional first party benefits, the 20 amount thereof or any other matter which may arise pursuant to 21 subsection (a) of this section to arbitration pursuant to simplified 22 procedures to be promulgated or approved by the superintendent. Such 23 simplified procedures shall include an expedited eligibility hearing 24 option, when required, to designate the insurer for first party benefits 25 pursuant to subsection [(d)] (f) of this section. The expedited eligi- 26 bility hearing option shall be a forum for eligibility disputes only, 27 and shall not include the submission of any particular bill, payment or 28 claim for any specific benefit for adjudication, nor shall it consider 29 any other defense to payment. 30 [(c)] (2) The commencement of a court proceeding or the submission of 31 a dispute to arbitration shall not preclude a claimant from electing to 32 submit other disputes arising from the same instance of use or operation 33 of a motor vehicle to the alternate forum. However, with the exception 34 of a proceeding brought pursuant to article seventy-five of the civil 35 practice law and rules, a claimant may not submit a dispute regarding 36 the same denial to multiple forums. 37 (3) Arbitrators are required to follow and apply substantive law. An 38 award by an arbitrator shall be binding except where vacated or modified 39 by a master arbitrator in accordance with simplified procedures to be 40 promulgated or approved by the superintendent, which shall offer the 41 parties the opportunity to submit written briefs. The grounds for vacat- 42 ing or modifying an arbitrator's award by a master arbitrator shall not 43 be limited to those grounds for review set forth in article seventy-five 44 of the civil practice law and rules and shall include factual, legal and 45 procedural errors. The award of a master arbitrator shall be binding 46 except for the grounds for review set forth in article seventy-five of 47 the civil practice law and rules, and provided further that where the 48 amount of such master arbitrator's award is five thousand dollars or 49 greater, exclusive of interest and attorney's fees, the insurer or the 50 claimant may institute a court action to adjudicate the dispute de novo. 51 [(d)] (c) With respect to an action for serious personal injury pursu- 52 ant to section five thousand one hundred four of this article, the award 53 of an arbitrator or master arbitrator rendered in a proceeding brought 54 pursuant to this article, other than an award pertaining to the issue of 55 the existence of insurance coverage, shall not constitute collateral 56 estoppel of the issues arbitrated.S. 3590 3 1 (d) With respect to an arbitration or an action commenced in a court 2 of competent jurisdiction initiated to obtain payment of an overdue 3 claim for the payment of medical benefits prima facie entitlement to 4 benefits shall be established by filing a verification by the claimant 5 with the arbitration demand or complaint, setting forth that: 6 (1) the claimant was licensed to render the services or the items 7 provided at the time they were provided; 8 (2) the services were rendered or items supplied by the claimant; 9 (3) the services or items were medically necessary, or, for services 10 or supplies provided pursuant to prescription, that such were properly 11 supported by a prescription; 12 (4) the claimant received an assignment of benefits from the injured 13 party or the guardian or parent of the injured party; and 14 (5) the claimant authorized the particular attorney or law firm to 15 commence the suit. 16 (e) With respect to an action commenced in a court of competent juris- 17 diction to obtain benefits pursuant to this article: 18 (1) A rebuttable presumption of admissibility attaches to claims 19 forms, denial of claims forms, verification requests and responses ther- 20 eto, when such are accompanied by an affidavit establishing that such 21 forms are business records pursuant to rule forty-five hundred eighteen 22 of the civil practice law and rules. 23 (2) A rebuttable evidentiary presumption shall attach to such docu- 24 ments referenced in paragraph one of this subsection that such are 25 valid. 26 (3) A rebuttable evidentiary presumption shall attach to such docu- 27 ments referenced in paragraph one of this subsection that such were 28 mailed to the address contained thereon, on the date contained thereon. 29 (4) A rebuttable evidentiary presumption shall attach to proofs of 30 payment that such payments were made by the insurer and received by the 31 plaintiff. 32 (5) In matters where the insurer's denial is based upon an alleged 33 lack of medical necessity, a rebuttable presumption of admissibility 34 attaches to medical reports of the claimant's treating providers. 35 (6) Nothing contained in this subsection shall preclude a party from 36 offering evidence at trial to rebut any presumption in this subsection, 37 nor to preclude an insurer from offering evidence at trial on any meri- 38 torious, non-precluded defense to payment of the benefits. 39 (7) The deposition of any person may be used by any party without the 40 necessity of showing unavailability or special circumstances, subject to 41 the right of any party to move pursuant to section thirty-one hundred 42 three of the civil practice law and rules to prevent abuse, provided 43 that the party against whom the evidence is offered had been afforded an 44 opportunity to participate and question the witness at the deposition. 45 (f) (1) Except as provided in paragraph two of this subsection, where 46 there is reasonable belief more than one insurer would be the source of 47 first party benefits, the insurers may agree among themselves, if there 48 is a valid basis therefor, that one of them will accept and pay the 49 claim initially. If there is no such agreement, then the first insurer 50 to whom notice of claim is given shall be responsible for payment. Any 51 such dispute shall be resolved in accordance with the arbitration proce- 52 dures established pursuant to section five thousand one hundred five of 53 this article and regulations as promulgated by the superintendent, and 54 any insurer paying first-party benefits shall be reimbursed by other 55 insurers for their proportionate share of the costs of the claim and the 56 allocated expenses of processing the claim, in accordance with theS. 3590 4 1 provisions entitled "other coverage" contained in regulation and the 2 provisions entitled "other sources of first-party benefits" contained in 3 regulation. If there is no such insurer and the motor vehicle accident 4 occurs in this state, then an applicant who is a qualified person as 5 defined in article fifty-two of this chapter shall institute the claim 6 against the motor vehicle accident indemnification corporation. 7 (2) A group policy issued pursuant to section three thousand four 8 hundred fifty-five or three thousand four hundred fifty-eight, as 9 amended by chapter one hundred twenty-nine of the laws of two thousand 10 twenty-two, of this chapter shall provide first party benefits when a 11 dispute exists as to whether a driver was using or operating a motor 12 vehicle in connection with a transportation network company or peer-to- 13 peer car sharing program when loss, damage, injury, or death occurs. A 14 transportation network company or peer-to-peer car sharing program 15 administrator shall notify the insurer that issued the owner's policy of 16 liability insurance of the dispute within ten business days of becoming 17 aware that the dispute exists. When there is a dispute, the group insur- 18 er liable for the payment of first party benefits under a group policy 19 shall have the right to recover the amount paid from the driver's insur- 20 er or in the case of a peer-to-peer car sharing program, the shared 21 vehicle owner's insurer to the extent that the driver would have been 22 liable to pay damages in an action at law. 23 § 3. Section 5109 of the insurance law, as added by chapter 423 of the 24 laws of 2005, is amended to read as follows: 25 § 5109. Unauthorized providers of health services. (a) The superinten- 26 dent[, in consultation with the commissioner of health and the commis-27sioner of education,] shall by regulation, promulgate standards and 28 procedures for investigating and suspending or removing the authori- 29 zation for providers of health services to demand or request payment for 30 health services as specified in paragraph one of subsection (a) of 31 section five thousand one hundred two of this article upon findings 32 reached after investigation pursuant to this section. Such regulations 33 shall ensure the same or greater due process provisions, [including] and 34 include notice and opportunity to be heard, as those afforded physicians 35 investigated under article two of the workers' compensation law and 36 shall include provision for notice to all providers of health services 37 of the provisions of this section and regulations promulgated thereunder 38 at least ninety days in advance of the effective date of such regu- 39 lations. As used in this section, "health services" means services, 40 supplies, therapies or other treatment as specified in subparagraph (i), 41 (ii), or (iv) of paragraph one of subsection (a) of section five thou- 42 sand one hundred two of this article. 43 (b) [The commissioner of health and the commissioner of education44shall provide a list of the names of all providers of health services45who the commissioner of health and the commissioner of education shall46deem, after reasonable investigation, not authorized to demand or47request any payment for medical services in connection with any claim48under this article because such] Following the hearing conducted pursu- 49 ant to the procedures and regulation promulgated pursuant to this 50 section, the superintendent may prohibit a provider of health services 51 from demanding or requesting payment for health services subsequently 52 rendered under this article, for a period not exceeding three years, if 53 the superintendent determines, after notice and hearing, that the 54 provider of health services: 55 (1) has admitted to, or been found guilty of, professional [or other] 56 misconduct [or incompetency], as defined in the education law, inS. 3590 5 1 connection with [medical] health services rendered under this article; 2 or 3 (2) has exceeded the limits of his or her professional competence in 4 rendering medical care under this article or has knowingly made a false 5 statement or representation as to a material fact in any medical report 6 made in connection with any claim under this article; or 7 (3) solicited, or has employed another to solicit for himself or 8 herself or for another, professional treatment, examination or care of 9 an injured person in connection with any claim under this article; or 10 (4) has refused to appear before, or to answer upon request of, the 11 [commissioner of health, the] superintendent[,] or any duly authorized 12 officer of the state, any legal question, or refused to produce any 13 relevant information concerning [his or her] the conduct of the provider 14 of health services in connection with [rendering medical] health 15 services rendered under this article; or 16 (5) has engaged in [patterns] a pattern of billing for: health 17 services [which were not provided.] alleged to have been rendered under 18 this article, when the health services were not rendered, provided that 19 this shall not be construed to apply to good faith disputes regarding 20 the appropriateness of a particular coding to describe a health care 21 service; or 22 (6) utilized unlicensed persons to render health services under this 23 article, when only a person licensed in this state may render the health 24 services; or 25 (7) utilized licensed persons to render health services under this 26 article, when rendering the health services is beyond the authorized 27 scope of the license of such person; or 28 (8) unlawfully ceded ownership, operation or control of a business 29 entity authorized to provide professional health services in this state, 30 including but not limited to a professional service corporation, profes- 31 sional limited liability company or registered limited liability part- 32 nership, to a person not licensed to render the health services which 33 the entity is legally authorized to provide; or 34 (9) committed a fraudulent insurance act as defined in section 176.05 35 of the penal law; or 36 (10) has been convicted of a crime involving fraudulent or dishonest 37 practices; or 38 (11) has, after warning by the superintendent, engaged in a pattern of 39 unlawfully attempting to collect payment directly from the patient or 40 eligible person for services rendered under this article when such 41 attempts violate the terms of an enforceable assignment of benefits. 42 (c) [Providers] The superintendent shall by regulation develop due 43 process procedures to assure a health provider accused under this 44 section has appropriate notice, an opportunity for a fair hearing and 45 appeal prior to a determination that the health provider may not bill 46 for services under this section. A provider of health services shall 47 [refrain from subsequently treating for remuneration, as a private48patient, any person seeking medical treatment] not demand or request 49 payment for any health services under this article [if such provider50pursuant to this section has been prohibited from demanding or request-51ing any payment for medical services under this article. An injured52claimant so treated or examined may raise this as] that are rendered 53 during the term of the prohibition ordered by the superintendent pursu- 54 ant to subsection (b) of this section. The prohibition ordered by the 55 superintendent may be a defense in any action by [such] the provider of 56 health services for payment for [treatment] health services renderedS. 3590 6 1 pursuant to this article at any time after such provider has been 2 prohibited from demanding or requesting payment for [medical] such 3 health services in connection with any claim under this article. 4 (d) The [commissioner of health and the commissioner of education] 5 superintendent shall maintain and regularly update a database containing 6 a list of providers of health services prohibited by this section from 7 demanding or requesting any payment [for health services connected to a8claim] rendered under this article and shall make [such] the information 9 available to the public [by means of a website and by a toll free10number]. 11 (e) The superintendent may levy a civil penalty not exceeding fifty 12 thousand dollars on any provider of health services that the superinten- 13 dent prohibits from demanding or requesting payment for health services 14 pursuant to subsection (b) of this section. Any civil penalty imposed 15 for a fraudulent insurance act, as defined in section 176.05 of the 16 penal law, shall be levied pursuant to article four of this chapter. 17 (f) Nothing in this section shall be construed as limiting in any 18 respect the powers and duties of the commissioner of health, commission- 19 er of education or the superintendent to investigate instances of 20 misconduct by a [health care] provider [and, after a hearing and upon21written notice to the provider, to temporarily prohibit a provider of22health services under such investigation from demanding or requesting23any payment for medical services under this article for up to ninety24days from the date of such notice] of health services and take appropri- 25 ate action pursuant to any other provision of law. A determination of 26 the superintendent pursuant to subsection (b) of this section shall not 27 be binding upon the commissioner of health or the commissioner of educa- 28 tion in a professional discipline proceeding relating to the same 29 conduct. 30 § 4. Subsection (d) of section 5102 of the insurance law, as amended 31 by chapter 955 of the laws of 1984, is amended to read as follows: 32 (d) "Serious injury" means a personal injury which results in death; 33 dismemberment; significant disfigurement; a fracture; loss of a fetus; a 34 complete tear or rupture of a nerve, tendon, ligament, cartilage or 35 muscle; a tear, rupture or impingement of a nerve, tendon, ligament, 36 cartilage or muscle which results in a significant impairment of a body 37 organ, member, function or system; permanent loss of use of a body 38 organ, member, function or system; permanent consequential limitation of 39 use of a body organ or member; significant limitation of use of a body 40 function or system; or a medically determined injury or impairment of a 41 non-permanent nature which prevents the injured person from performing 42 substantially all of the material acts which constitute such person's 43 usual and customary daily activities for not less than ninety days 44 during the one hundred eighty days immediately following the occurrence 45 of the injury or impairment. 46 § 5. Subsection (j) of section 3420 of the insurance law is amended by 47 adding a new paragraph 4 to read as follows: 48 (4) The term "covered person" as used in this article shall mean any 49 pedestrian injured through the use or operation of, or any owner, opera- 50 tor or occupant of, a motor vehicle which has in effect the financial 51 security required by article six or eight of the vehicle and traffic law 52 or which is referred to in subdivision two of section three hundred 53 twenty-one of such law; or any other person entitled to first party 54 benefits. For the purposes of this article, "covered person" shall also 55 include any person injured as the result of a staged, planned or inten-S. 3590 7 1 tional accident, provided that such person is not a perpetrator of or a 2 knowing participant in the staging or planning of the accident. 3 § 6. Section 5202 of the insurance law is amended by adding a new 4 subsection (m) to read as follows: 5 (m) "Covered person" means any pedestrian injured through the use or 6 operation of, or any owner, operator or occupant of, a motor vehicle 7 which has in effect the financial security required by article six or 8 eight of the vehicle and traffic law or which is referred to in subdivi- 9 sion two of section three hundred twenty-one of such law; or any other 10 person entitled to first party benefits. For the purposes of this arti- 11 cle, "covered person" shall also include any person injured as the 12 result of a staged, planned or intentional accident, provided that such 13 person is not a perpetrator of or a knowing participant in the staging 14 or planning of the accident. 15 § 7. This act shall take effect immediately; provided that: 16 (a) section two of this act shall apply to benefits initiated on or 17 after the one hundred eightieth day after this act shall have become a 18 law; and 19 (b) sections three, five and six of this act shall take effect on the 20 one hundred eightieth day after it shall have become a law, provided 21 that the superintendent of financial services shall immediately promul- 22 gate rules and regulations pursuant to section 5109 of the insurance law 23 as amended by section three of this act and sections five and six of 24 this act shall apply to all new policies and policies that are renewed 25 or modified after such one hundred eightieth day.
