An Austin Firm Dedicated to
Health Care Law

  1. Home
  2.  → 
  3. Health & Health Care Law
  4.  → NY to insurance providers, cannot deny claims for administrative reasons

NY to insurance providers, cannot deny claims for administrative reasons

In a recent win for hospitals throughout the state, the New York Department of Financial services recently stated insurance providers cannot deny hospital claims based on “administrative reasons.” More specifically, the letter states that insurance provers cannot deny payments if the denial is based only on the hospital’s failure to comply with “certain administrative requirements, coding of claims, and standards for prompt, fair, and equitable settlement of claims for health care services.”

How is this different than previous regulations?

There are a number of changes. Two examples include:

  • Timeliness of request. In the past, New York state Insurance Law and Public Health Law prohibited insurance providers to deny payment for medically necessary inpatient services that were the result of an emergency admission simply because the medical provider had not completed the request in a timely manner. This change extends the prohibition to include observation services, emergency department services and emergency admissions.
  • Timeliness of payment. The change also clarifies how much time an insurer has to pay a provider for services. If there is a dispute, the letter clearly states the insurance company should still pay the medical provider at least the undisputed amount within a reasonable time period, generally 30 to 45 days after receipt of the claim depending on the circumstances. Once a determination is finalized, the insurance company should pay the remaining balance within 15 calendar days.

There are also changes that detail rejections based on coding errors or issues.

When does this change go into effect?

The change went into effect for services performed on or after January 1, 2021. It is important to note that there are some limitations to this law.