Private Insurance Reimbursement in the New York State – Early Intervention Program

Brad Hutton, M.P.H., Part C Coordinator New York State Dept. of Health

National Early Childhood ConferenceDecember 3, 2007

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NYS Early Intervention Program

12/1/2006 child count = 30,98858 municipalities – local programs

Serve between 2/year to 20,000/yr.660 provider agencies20,000 individual therapistsRacial/ethnic diversity

42% minority racial/ethnic groups Materials in 19 languages

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Total Expenditures by Funding Source, 2005-06

$680 million in 2005-06 $277 million (40%) Medicaid $195 million (29%) State $195 million (29%) Counties $11 million (2%) Private Insurance

Leading expense for counties after Medicaid25% of Medicaid costs in NYS paid by

counties with new cap enacted 2 years ago40% of children in program have private

insurance

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Payment Process

ISC obtains MA and insurance information, facilitates referral for enrollment in Medicaid, explains family protections

Rights subrogated to counties for claiming County pays provider County then required to:

Claim for Medicaid reimbursement Claim for Private insurance Claim for State reimbursement of 50% of unreimbursed

costs within two years $1 paid by private insurance equals 50c. savings

to State and to counties

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Current Insurance Legislation in NYS for Early Intervention

Insurers prohibited from excluding coverage solely because services are early intervention program services

Does not include: ERISAs Self-insured Contracts delivered outside of NYS

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County Private Insurance Claiming Experience, 2006

1,045,523 claims submitted for third party insurance reimbursement in 2006

69.5% were denied, many multiple times Reasons for denial include:

22% service not covered 21% no response from insurer 11% not medically necessary 9% provider out of network 8% no preauthorization obtained Also, location of services and duration of condition

Not just financial issue, but administrative burden with little revenue recovered

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Legislative Protections

Counties not obligated to bill if it will be applied to an annual or lifetime cap.

Public reimbursement of co-payments and deductibles

Services cannot reduce number of visits otherwise covered by plan (e.g., 10 PT visits per year)

Cannot have impact on premiums Parents can refuse to provide insurance

information and that cannot impact their eligibility or services in the program

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Administrative Efforts to Improve

Guidance Document on Commercial Insurance Claiming, 2003 Clarified claiming requirements for counties Services that did not need to be claimed (e.g.,

special instruction and service coordination) Process for appeal of denials Prompt payment complaints – 45 days

Workgroup with counties and insurersLikely resulted in increase from $5 million

to $11 million paid per year

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Legislative History

Numerous unsuccessful attempts to modify statute to address flaws in mandate

Modification of Mandate – IFSPs shall meet all preauthorization, medical necessity, and coverage cannot be denied due to location, duration of conditions, provider out of network

Covered Lives Assessment – fee per covered lives for all insurers used to support publicly funded programs in NYS $100 million increase proposed Inclusion of ERISAs

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Conclusions

Funding from private insurers is essential for maintaining the financial security of programs

Insurance mandates can be effective, but the details are essential