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NEW YORK STATE’S SELF-FUNDED GOVERNMENT HEALTH PLAN FOR NEW YORK STATE’S PUBLIC EMPLOYEES, THE “EMPIRE PLAN,” IS SUBJECT TO THE INDEPENDENT DISPUTE RESOLUTION (IDR) PROCEDURES IN THE FEDERAL “NO SURPRISES ACT” (THIRD DEPT).

The Third Department, in a full-fledged opinion by Justice Lynch, determined the state’s self-funded government health plan for New York State’s public employees (the Empire Plan) is subject to the independent dispute resolution (IDR) procedures in the federal “No Surprises Act:”

In 2014, the Legislature passed the “Surprise Bill Law” … which protects insureds from being billed directly for healthcare services they did not know were being performed by an out-of-network provider … . Under the law, the “health care plan” of an insured who receives a surprise bill is liable for the costs of the out-of-network services and may attempt to negotiate a reimbursement amount that is less than the amount billed … . “If the health care plan’s attempts to negotiate . . . do[ ] not result in a resolution of the payment dispute . . . , the health care plan shall pay the non-participating provider an amount the health care plan determines is reasonable for the health care services rendered, except for the insured’s co-payment, coinsurance or deductible” … . The law also contains an independent dispute resolution (… IDR) process to address payment disputes, which may be invoked by “[e]ither the health care plan or the non-participating provider” if certain conditions are met … . When invoked, the IDR process assigns the dispute to an independent arbitrator to determine the reasonable fees for services rendered by an out-of-network provider utilizing the factors outlined in Financial Services Law § 604 and the FAIR Health benchmarking database * * *

… [A]fter the US Congress passed the federal No Surprises Act in 2020 … — a statute substantively similar to the state’s Surprise Bill Law — the Empire Plan began using the IDR process set forth in the federal law, which uses different benchmarks to determine the reasonable fees to be paid to an out-of-network provider by an insured’s health care plan … . Joseph v Corso, 2024 NY Slip Op 05170, Third Dept 10-17-24

 

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