New rule provides more protection from surprise medical bills

New Yorkers have gained a new protection against surprise charges from out-of-network health care providers.

The state now requires insurance companies to provide accurate information to their customers about whether providers are in-network under a regulation adopted this month.

If an insurance company states in writing that a provider is in-network, but in fact the provider is out-of-network, the customer can only be charged in-network rates — not the potentially higher out-of-network costs, the state Department of Financial Services said.

"New Yorkers should never be blind-sided by surprise costs due to incorrect information in their insurer's health care provider directory," Gov. Kathy Hochul said in a statement. The rule, she said, "will help protect consumers from surprise costs and ensure they pay no more than their in-network cost-sharing."

The rule applies to insurance companies that inaccurately list a provider as in-network in their online or hard-copy provider directories, or in a written response to a consumer’s request for information.

It also applies if an insurance company does not respond promptly in writing to a consumer’s request for information about whether a provider is in-network. Insurance plans that cover only specific services — such as vision or dental care — have up to three days to respond. So-called comprehensive plans that cover a wider range of services must respond within one day.

A review by the nonprofit Community Service Society of New York of patients’ claims in 2015 and 2016 found numerous instances when an insurer wrongly informed consumers that certain providers were in-network, when actually they were not, said Elisabeth R. Benjamin, a vice president with CSS.

“You would think, if the health plan wrongly tells you, ‘that provider’s in-network,’ but they're really not, it would be the health plan’s fault,” and the consumer would pay only in-network charges, Benjamin said. “Well, until this regulation, that wasn't actually true. It was, ‘you are stuck with the bill.’”

Leslie Moran, senior vice president of the New York Health Plan Association, which represents 29 managed care health plans, said insurers “work hard to ensure the accuracy of their directories … relying on providers to update their information when there are changes in their network status.”

The new rule is one of several protections against unexpected out-of-network medical bills.

The federal No Surprises Act, which took effect this year, prohibits hospitals and other providers from billing insured patients for out-of-network services at higher than in-network rates under certain circumstances — for instance, in an emergency, or if a patient scheduled a procedure at an in-network facility but received care from an out-of-network doctor.

A similar state law took effect in 2015.

By Maura McDermott

maura.mcdermott@newsday.commauramcdermott

Maura McDermott is a reporter on the investigations desk. Since starting at Newsday in 2012, she has also covered real estate and the business of health care.