New York Gives Regulatory Relief To Hospitals During COVID-19 Crisis

The Department of Financial Services (DFS) today announced it has issued guidance to insurers that they should suspend pre-authorization and administrative requirements, including certain utilization review and notification requirements for hospitals, which was developed in collaboration with the insurance industry and hospitals. The suspension of these requirements will help hospitals to meet increased demand for inpatient care due to the coronavirus (COVID-19). With this new regulatory relief, hospitals will be able to focus their resources on patient care and more efficiently discharge patients when medically appropriate, thereby freeing up hospital beds for COVID-19 patients.

“DFS temporarily suspending pre-authorization and other administrative requirements provides much needed flexibility for hospitals and will help increase the capacity of hospital beds during this critical time,” said Superintendent Linda A. Lacewell. “We encourage insurance companies and hospitals to continue to work together to ensure that COVID-19 patients receive the care they need.”

“These regulatory changes will ensure that patients get the care they need as quickly as possible during this public health emergency,” said New York State Department of Health Commissioner Dr. Howard Zucker. “As New York State, under Governor Cuomo, continues to lead the national response to the COVID-19 pandemic, these actions will speed processes and help keep hospital space available everyone who needs it.”

DFS’ guidance letter advises insurers that they should suspend the following requirements for 90 days:  

• Pre-authorization review for scheduled surgeries or admissions at hospitals;
• Concurrent review for inpatient hospital services provided;
• Retrospective review for inpatient hospital services and emergency services provided at in-network hospitals;
• Pre-authorization review for home health care services and inpatient rehabilitation services following an inpatient hospital admission;
• To the extent currently required, pre-authorization review for inpatient rehabilitation services following an inpatient hospital admission for mental health and substance use disorders;
• Deadlines for hospitals to submit an internal or external appeal for a medical necessity denial; and
• Non-essential payment audits of hospitals and the timeframe for the insurer to recover overpayments.

Hospitals should use their best efforts to continue to provide insurers with notifications, including information necessary for the insurer to assist in coordinating care and discharge planning of emergency hospital admissions.

DFS also strongly encourages third party administrators to apply the provisions of this guidance letter to their administrative services arrangements with self-funded plans so that hospitals can direct resources to patient care in order to handle the increases in patient volume due to COVID-19.

DFS is closely monitoring the development of COVID-19 and will continue to consider additional suspensions or regulatory relief as appropriate and needed for regulated institutions impacted by the challenges of COVID-19. Regulated institutions are encouraged to communicate questions to their designated or regular DFS points of contact.

The guidance letter will remain in effect for 90 days, but is subject to further evaluation as the COVID-19 situation develops. Read a copy of the insurance guidance letter.