N.Y. Financial Services Law § 604: Criteria for determining a reasonable fee

* § 604. Criteria for determining a reasonable fee. In determining the

appropriate amount to pay for a health care service, an independent

dispute resolution entity shall consider all relevant factors,

including:

(a) whether there is a gross disparity between the fee charged by the

provider for services rendered as compared to:

(1) fees paid to the involved provider for the same services rendered

by the provider to other patients in health care plans in which the

provider is not participating, and

(2) in the case of a dispute involving a health care plan, fees paid

by the health care plan to reimburse similarly qualified providers for

the same services in the same region who are not participating with the

health care plan;

(b) the level of training, education and experience of the health care

professional, and in the case of a hospital, the teaching staff, scope

of services and case mix;

(c) the provider's usual charge for comparable services with regard to

patients in health care plans in which the provider is not

participating;

(d) the circumstances and complexity of the particular case, including

time and place of the service;

(e) individual patient characteristics;

(f) the median of the rate recognized by the health care plan to

reimburse similarly qualified providers for the same or similar services

in the same region that are participating with the health care plan; and

(g) with regard to physician services, the usual and customary cost of

the service.

* NB Effective until August 26, 2026

* § 604. Criteria for determining a reasonable fee. (a) In determining

the appropriate amount for a health care plan other than a health

benefit plan operated pursuant to article eleven of the civil service

law to pay for a health care service, an independent dispute resolution

entity shall consider all relevant factors, including:

(1) whether there is a gross disparity between the fee charged by the

provider for services rendered as compared to:

(A) fees paid to the involved provider for the same services rendered

by the provider to other patients in health care plans in which the

provider is not participating, and

(B) in the case of a dispute involving a health care plan, fees paid

by the health care plan to reimburse similarly qualified providers for

the same services in the same region who are not participating with the

health care plan;

(2) the level of training, education and experience of the health care

professional, and in the case of a hospital, the teaching staff, scope

of services and case mix;

(3) the provider's usual charge for comparable services with regard to

patients in health care plans in which the provider is not

participating;

(4) the circumstances and complexity of the particular case, including

time and place of the service;

(5) individual patient characteristics;

(6) the median of the rate recognized by the health care plan to

reimburse similarly qualified providers for the same or similar services

in the same region that are participating with the health care plan; and

(7) with regard to physician services, the usual and customary cost of

the service.

(b) (1) In determining the appropriate amount for a health benefit

plan operated pursuant to article eleven of the civil service law to pay

for a health care service, an independent dispute resolution entity

shall select either the health care plan's payment or the

non-participating provider's fee depending on which one is closest to

the allowed benchmark, provided, however, that the independent dispute

resolution entity may choose the health care plan's payment or the

non-participating provider's fee if it is not closest to the allowed

benchmark if:

(A) the health care plan's payment or the non-participating provider's

fee are equally distant from the allowed benchmark; or

(B) the independent dispute resolution entity determines that any of

the following information submitted by either party clearly demonstrates

that the allowed benchmark is not appropriate:

(i) the level of training, education and experience of the health care

professional, and in the case of a hospital, the teaching staff, scope

of services and case mix;

(ii) the circumstances and complexity of the particular case,

including time and place of the service; or

(iii) individual patient characteristics.

(2) If the independent dispute resolution entity selects the health

care plan's payment or the non-participating provider's fee that is not

closest to the allowed benchmark, such decision shall not be on the

basis of:

(A) whether there is a gross disparity between the fee charged by the

provider for services rendered as compared to:

(i) fees paid to the involved provider for the same services rendered

by the provider to other patients in health care plans in which the

provider is not participating; or

(ii) in the case of a dispute involving a health care plan, fees paid

by the health care plan to reimburse similarly qualified providers for

the same services in the same region who are not participating with the

health care plan;

(B) the provider's usual charge for comparable services with regard to

patients in health care plans in which the provider is not

participating; or

(C) with regard to physician services, the usual and customary cost of

the service.

(3) If an independent dispute resolution entity makes a determination

pursuant to subparagraph (B) of paragraph one of subsection (b) of this

section, its written decision shall include an explanation of the

factors in subparagraph (B) of paragraph one of subsection (b) of this

section that demonstrated the health care plan's payment or

non-participating provider's fee closest to the allowed benchmark was

materially different from the appropriate payment for the health care

service.

(4) If the independent dispute resolution entity determines the

non-participating provider's fee is a reasonable fee for the services

rendered, in no circumstances shall the amount owed by a health care

plan exceed the maximum fee.

(5) Notwithstanding the foregoing, disputes involving health care

services provided by a physician employed by a general hospital licensed

under article twenty-eight of the public health law or such hospital's

affiliated medical school, or is part of a group practice that is

established as a captive professional services corporation whose

shareholders are employees of such hospital, shall be subject to

subsection (a) of this section even if paid for by a health benefit plan

operated pursuant to article eleven of the civil service law.

(c) No fee for services rendered shall be awarded pursuant to this

article:

(1) if the health care plan can demonstrate that it has a contract

with the provider or a subsidiary or other entity owned or operated by

the provider that is in effect at the time the disputed service or

services were provided to provide the same service or services at the

same location; or

(2) if the health care plan can demonstrate that a notice of

determination for prior authorization has been issued to the patient's

health care provider pursuant to section forty-nine hundred three of the

insurance law and section forty-nine hundred three of the public health

law identifying the health care service or services in dispute as

out-of-network, or, for patients covered by a health care plan not

subject to section forty-nine hundred three of the insurance law or

section forty-nine hundred three of the public health law, if a notice

of determination for prior authorization has been issued to the

patient's health care provider that includes all of the disclosures set

forth in such laws and that clearly identifies the health care service

or services in dispute as out-of-network.

* NB Effective August 26, 2026 until August 26, 2031

* § 604. Criteria for determining a reasonable fee. In determining the

appropriate amount to pay for a health care service, an independent

dispute resolution entity shall consider all relevant factors,

including:

(a) whether there is a gross disparity between the fee charged by the

provider for services rendered as compared to:

(1) fees paid to the involved provider for the same services rendered

by the provider to other patients in health care plans in which the

provider is not participating, and

(2) in the case of a dispute involving a health care plan, fees paid

by the health care plan to reimburse similarly qualified providers for

the same services in the same region who are not participating with the

health care plan;

(b) the level of training, education and experience of the health care

professional, and in the case of a hospital, the teaching staff, scope

of services and case mix;

(c) the provider's usual charge for comparable services with regard to

patients in health care plans in which the provider is not

participating;

(d) the circumstances and complexity of the particular case, including

time and place of the service;

(e) individual patient characteristics;

(f) the median of the rate recognized by the health care plan to

reimburse similarly qualified providers for the same or similar services

in the same region that are participating with the health care plan; and

(g) with regard to physician services, the usual and customary cost of

the service.

* NB Effective August 26, 2031