New York State Department of Health
New York Early Intervention System (NYEIS) Electronic Mailing List
Health Spending Account (HSA) Guidance
Dear
Colleague:
This guidance is in response to questions that the Department has received
regarding EI families' Health Spending Account (HSA) funds that are incorrectly
being sent to EI service providers by insurance companies for payment of
services under the program.
It has come
to our attention that a number of EI providers have received payments
from HSAs of families whose children have been served in the EI program. HSAs
are not insurance and providers should never be paid from HSAs. Although these
payments may have been made inadvertently through a second party payor (the
insurer), they are not allowed under the EI program and must be refunded to the
family's HSA by the insurer immediately. HSA account information should not be
entered into the NYEIS or KIDS systems.
Once the
family's HSA monies are returned to the HSA by the insurer, providers will be
paid for their services through the escrow account.
As an EI
provider, you may be made aware by the family, the State Fiscal Agent, DOH or a
service coordinator that HSA funds were inadvertently used to pay you for EI
services. When
a provider is notified or determines that they have inadvertently received HSA
funds they should:
- Work
with the family’s service coordinator to have the insurance information
maintained in NYEIS or KIDS corrected and, if needed, the HSA information
removed.
- Contact
the State Department of Health via email to report the issue at bei@health.state.ny.us.
- Identify
the total amount of the claims paid to the provider from the family’s
HSA.
- Contact
the insurance company and ask for direction to return the payment to the
insurer and ultimately to the family’s available benefits. Please return
these funds to the insurance company within 10 business days to be placed
back into the family's HSA. Service coordinators can assist
providers with this process in order to protect the family’s insurance
benefits.
For your convenience we have
included a sample Payment Reversal Letter that you can use to send to the
insurer with the returned funds. We have also attached a sample letter
that you can give to the parent, which they can send to the insurer
requesting return of funds to their HSA. - Once
the payment has been returned to the insurer, the provider should take the
following steps to ensure payment is processed from the escrow account:
a) Enter into EIBilling.com the information that the payment has
been returned to the insurer, in the same manner as you enter denial
information, using the State Fiscal Agent’s EOB process. For
‘denial reason’ you should enter the phrase “non-regulated funds returned
to insurer”.
b) For a more detailed explanation of how EOBs are entered into the
EIBilling.com website, please see the following knowledge base article: https://support.eibilling.com/KB/a87/entering-eobs.aspx. - Parents,
providers and the State Fiscal Agent will know that the funds have been
returned to the HSA by reviewing the updated EOB sent by the insurance
company.
Dollars are placed
in an HSA pre-tax by the employee and sometimes the employer for the payment of
qualifying health care costs. The plan administrator (the insurance company) is
required to prepare a statement of HSA distributions (1099 SA) for the calendar
year and send to the taxpayer for the preparation of form 8889.
We rely on
and encourage EI families to let us know if providers’ payments were taken from
their HSA. We, in no way, intend for the family's HSA resources to pay for EI
services. Many times the provider's billing department is not cognizant
of the source of payment, as payments are made by the insurance company and
appear as typical insurance payments.
We hope this
information is helpful to you and will prevent family’s HSA funds from being
misused in error to pay for EI services. If you need additional information
about this issue please contact the Bureau of Early Intervention at
518-473-7016 or email them at bei@health.state.ny.us.
Please do
not reply to this email.
Thank You.