New York State Health Care Reform Act (HCRA)

September 5, 1997

To Health Care Payors and Third Party Administrators:

The purpose of this letter is to inform you of the election application requirements for 1998 and subsequent years and the reporting responsibilities and notification procedures for payors and Third Party Administrators (TPAs) under the New York State Health Care Reform Act (HCRA).

In accordance with the provisions of Public Health Law §2807-j(5)(a)(i) a payor that becomes newly licensed pursuant to the Insurance Law or certified pursuant to Article 44 of the Public Health Law or a self-funded plan that had not previously provided third-party coverage, may elect direct payments to begin April 1, July 1 or October 1 of any year provided the completed election form is received by the Department postmarked no later than 30 days prior to these dates. As interpreted by the Department, for all assessment years subsequent to 1997, this provision will allow a benefit plan which was fully insured on the annual election deadline date, (December 1 of the year preceding an assessment year), commencing on December 1, 1997, to elect to become a direct payor effective with the quarterly dates specified during the assessment year provided an election application is received at least 30 days prior to such effective dates. Conversely, if a health benefit plan was self-insured at the time of an annual election deadline date and did not elect to become a direct payor by filing a election application for the ensuing assessment year, such fund would be precluded from the quarterly election option during the assessment year.

Reporting requirements of the HCRA stipulate that all electing entities must file monthly reports, even when there is no Public Goods liability for the month. Self-insured funds should file these reports on their own behalf or through their Third Party Administrator (TPA). When an electing self-insured fund becomes fully insured, switches from using a TPA to processing their own claims, or vice versa, Attachment #2.5 should be filed with the pool administrator by the payor. Where an electing self-insured fund switches to fully insured, the fund or their TPA, must file reports for [two years] a period of one year following the end of the year in which the change in status occurred or until all claims (for the period during which they were self-insured) have been adjudicated (paid). Once all claims have been paid, the fund or TPA should submit another Attachment #2.5 indicating that as of the effective date, all claims for the period when the fund was self-insured have been adjudicated, and thus the fund has no further liability to the Public Goods Pool. The TPA should also submit an Attachment #2.4-B to delete the self-insured fund from their Attachment #2.4 which was originally submitted with the pool administrator.

Funds who transfer business from one TPA to another TPA should file Attachment #2.6 with the pool administrator. The previous TPA is responsible for filing reports for [two years] a period of one year following the end of the year in which the change in TPA occurred or until all claims that the previous TPA is responsible for have been adjudicated (paid). The previous TPA should also file Attachment #2.4-B to delete the self-insured fund from the Attachment #2.4 which was originally submitted with the pool administrator. Once all claims have been paid by the previous TPA, the fund or TPA must submit an Attachment #2.6 showing this and indicating the effective date. The new TPA should file an Attachment #2.4-A to add the self-insured fund to the Attachment #2.4 which was originally submitted with the pool administrator. If the new TPA assumes responsibility for all pending claims for a self-insured fund, the reporting responsibility of the past TPA ceases, however, this must be indicated on Attachment #2.6.

Copies of the aforementioned forms are attached. Please photocopy these forms, as necessary, or obtain additional forms from the Department of Health's website (www.health.state.ny.us/nysdoh/hcra/hcrahome.htm). If you should need additional information regarding the foregoing, please contact a HCRA representative from my staff at (518) 473-4653.

Sincerely,

Richard Pellegrini
Director
Bureau of Financial Management and Information Support