ALBANY, N.Y., September 13 – Governor George E. Pataki has signed into law an amendment to the Insurance and Public Health laws setting forth reforms to the manner by which health insurance companies process claims for health insurance benefits from physicians and providers. The reforms also hasten the time for health insurance companies to review health care providers who wish to participate in the health insurance companys network of providers.

Signed as Chapter 551 of the Laws of 2006, the law adds a new section 3224-b to the Insurance Law establishing rules relating to the processing of health insurance claims and overpayments to physicians. The legislation requires health plans to accept and initiate the processing of all health care claims submitted by a physician pursuant to, and consistent with, the current version of the American Medical Associations current procedure terminology (CPT) codes and the Medicare HCPCS system.

Additionally, under the legislation, a health plan shall provide " on its website, in its newsletter, and to participating physicians upon written notice " the name of the commercially available reimbursement software product that the heath plan utilizes, as well as any significant edits added to the software.

The law also establishes guidelines for overpayment recovery efforts by health plans. Other than for duplicate payments, the law requires health plans to provide 30 days written notice to physicians before engaging in additional overpayment recovery efforts. The notice is to state the patient name, service date, payment amount, proposed adjustment, and a reasonably specific explanation of the proposed adjustment. Health plans shall not initiate overpayment recovery efforts more than 24 months after the original payment was received by the physicians, except in cases based upon reasonable belief of fraud or other intentional misconduct, or a pattern of abusive billing.

Nothing in the law affects an insurers right to pursue recovery of overpayments that occurred prior to the effective date of this law where the insurer has provided the physician with notice of such recovery efforts.

The law further amends the Insurance and Public Health laws to establish uniform processes and timeframes for physician credentialing. The bill states, An insurer shall complete review of the health care professionals application to participate in the in-network portion of the insurers network and, within 90 days of receiving a health care professionals completed application to participate in the insurers network, will notify the health care professional as to whether he or she is credentialed or whether additional time is necessary to make a determination in spite of [the] insurers best efforts, or because of a failure of a third party to provide necessary documentation, or [because of] non-routine or unusual circumstances [that] require additional time for review.

The legislation was sponsored by Senator Nicholas A. Spano (R/C-Westchester) and Assemblyman Adam T. Bradley (D-Westchester).