Healthcare providers must proactively pursue timely payments under New York’s Prompt Pay Law and conduct credentialing verification to protect their income in the wake of the Health Republic insurance company closing.
In October 2015, the New York State Department of Financial Services (DFS) announced that Health Republic would halt coverage at the end of November 2015 due to its risk of insolvency. This announcement started a scramble among healthcare providers. The state Healthcare Association, an industry group representing hospitals, estimates that hospitals alone are owed at least $160 million from Health Republic.
Newsday reported that the DFS has told Magnacare that payments for many services “are on hold to conserve assets.” While payments are placed on hold, healthcare providers are still obligated to provide services. As a result, many providers, like Mariwalla Dermatology in West Islip, will continue to provide care, but only if its Health Republic patients pay out of pocket. According to the practice manager, the most recent payments received from Health Republic are from February, representing a potentially serious crisis.[1]
Kemp Hannon (R-Garden City), chair of the Health Committee in the New York State Senate, has pledged to urge passage of legislation creating a funding pool from which providers can recover payments from insolvent health insurers, given the Health Republic crisis.
Healthcare providers should protect their right and ability to receive payments now. New York’s Prompt Pay Law, Insurance Law Section 3224-a, requires an insurer to pay undisputed claims within 30 days after receipt of an electronic submission or within 45 days after receipt by other means. Failure to pay promptly renders an insurer liable for payment of the full amount of the claim plus 12 percent interest per annum. Thankfully for providers, a 2014 case, Maimonides Med. Ctr. v. First United Am. Life Ins. Co., 116 A.D.3d 207 (2d Dept. 2014), held that healthcare providers possess an implied private right of action to sue under the Prompt Pay Law. This means that, contrary to earlier court holdings, doctors can sue an insurer directly if the insurer fails to comply with the Prompt Pay Law deadlines. Healthcare providers should take full advantage of this fact in order to protect their ability to receive payment for outstanding Health Republic claims as it prepares to shut down November 30.
Additionally, providers should confirm their credentialing status with Fidelis, Excellus BlueCross Blue Shield, and MVP Health Care. These three insurers will be absorbing the 200,000 plus Health Republic members pursuant to assignment from New York DFS. If Health Republic members do not sign up for alternate coverage, the DFS will automatically enroll them in one of these three insurers. Therefore, healthcare providers who presently have a significant Health Republic patient base will want to make sure they can keep these patients as they are moved into the other plans.
Providers with questions about remedies to pursue payment from Health Republic or about their credentialing status in the other plans should feel free to contact us for assistance.
[1] “NY State puts hold on processing Health Republic medical insurance claims,” Newsday, November 12, 2015, last accessed on November 13, 2015 at [http://www.newsday.com/news/health/health-republic-medical-insurance-claims-processing-put-on-hold-by-new-york-state-1.11117985].