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

1. 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 Conference December 3, 2007

9. NYS Early Intervention Program • 12/1/2006 child count = 30,988 • 58 municipalities – local programs • Serve between 2/year to 20,000/yr. • 660 provider agencies • 20,000 individual therapists • Racial/ethnic diversity • 42% minority racial/ethnic groups • Materials in 19 languages

10. 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 Medicaid • 25% of Medicaid costs in NYS paid by counties with new cap enacted 2 years ago • 40% of children in program have private insurance

11. 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

12. 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

13. 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

14. 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

15. 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 insurers • Likely resulted in increase from $5 million to $11 million paid per year

16. 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

17. Conclusions • Funding from private insurers is essential for maintaining the financial security of programs • Insurance mandates can be effective, but the details are essential