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Legislative Memo

Lev Ginsburg
Vice President of Government Affairs
T 518.465.7517 x207
www.bcnys.org

BILL:

S.7071 (Hannon) / A.9946 (Morelle)

Support

SUBJECT:

Utilization Review and Denial of Claims

 

DATE:

May 30, 2012

 

The Business Council of New York State opposes this bill, as it will result in increased administrative and medical expenses as well as increased employer and employee health insurance premiums, while promoting a reduction in hospital efficiency and accountability.

This legislation requires that all non-timely utilization review responses be deemed approved and that health plans provide written confirmation of verbal prior authorizations within 24 hours.  Changing the results of late utilization review responses from “denied” to “approved,” regardless of whether hospitals have provided essential information or not, will result in an increase in medically unnecessary approvals.

The proposed elimination of all penalties for administrative and technical contract violations for hospitals with a previous year’s 90% compliance rating will undermine negotiated contract terms between hospitals and health plans.  At a time when the nation and New York in particular is striving for greater hospital efficiencies and accountability, creating a statutory 10% error buffer would work counter to these aims.

Expanding the external appeals process to include “up-coding” billing disputes and extending the external appeals timeframe from 45 to 120 days, injects billing disputes in to the external appeals process, a process meant to deal exclusively with patient treatment decisions.  Such a co-opting of the external appeals process is not in the best interest of patients and would do nothing to stymie ongoing egregious billing practices.

This bill is unbalanced and will undermine and negate the fairly negotiated utilization review process and will increase health insurance premiums for New York’s employers and employees. 

For these reasons, The Business Council of New York State opposes S.7071/A.9946.