Bill Text: NJ A2669 | 2012-2013 | Regular Session | Introduced
Bill Title: Revises "Health Care Quality Act;" requires certain provisions in managed care plan contracts; clarifies certain responsibilities for ordering tests and procedures.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2012-03-08 - Introduced, Referred to Assembly Financial Institutions and Insurance Committee [A2669 Detail]
Download: New_Jersey-2012-A2669-Introduced.html
Sponsored by:
Assemblyman HERB CONAWAY, JR.
District 7 (Burlington)
SYNOPSIS
Revises "Health Care Quality Act;" requires certain provisions in managed care plan contracts; clarifies certain responsibilities for ordering tests and procedures.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning managed care plans, and amending and supplementing P.L.1997, c.192.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 2 of P.L.1997, c.192 (C.26:2S-2) is amended to read as follows:
2. As used in sections 2 through 19 of this act:
"Behavioral health care services" means procedures or services rendered by a health care provider for the treatment of mental illness, emotional disorders, or drug or alcohol abuse. "Behavioral health care services" does not include: any quality assurance or utilization management activities or treatment plan reviews conducted by a carrier, or a private entity on behalf of the carrier, pertaining to these services, whether administrative or clinical in nature; or any other administrative functions, including, but not limited to, accounting and financial reporting, billing and collection, data processing, debt or debt service, legal services, promotion and marketing, or provider credentialing.
"Carrier" means an insurance company, health service corporation, hospital service corporation, medical service corporation or health maintenance organization authorized to issue health benefits plans in this State.
"Commissioner" means the Commissioner of Health and Senior Services.
"Contract holder" means an employer or organization that purchases a contract for services.
"Covered person" means a person on whose behalf a carrier offering the plan is obligated to pay benefits or provide services pursuant to the health benefits plan.
"Covered service" means a health care service provided to a covered person under a health benefits plan for which the carrier is obligated to pay benefits or provide services.
"Department" means the Department of Health and Senior Services.
"Formulary" means a list of prescription drugs that are covered under a health benefits plan.
"Generally accepted standards of medical practice" means standards that are based on credible scientific evidence published in peer-reviewed literature generally recognized by the relevant medical community, recommendations made by or views held by physician specialty societies or physicians practicing in the relevant clinical areas, or any other relevant factor.
"Health benefits plan" means a benefits plan which pays or provides hospital and medical expense benefits for covered services, and is delivered or issued for delivery in this State by or through a carrier. Health benefits plan includes, but is not limited to, Medicare supplement coverage and risk contracts to the extent not otherwise prohibited by federal law. For the purposes of this act, health benefits plan shall not include the following plans, policies or contracts: accident only, credit, disability, long-term care, CHAMPUS supplement coverage, coverage arising out of a workers' compensation or similar law, automobile medical payment insurance, personal injury protection insurance issued pursuant to P.L.1972, c.70 (C.39:6A-1 et seq.) or hospital confinement indemnity coverage.
"Health care provider" means an individual or entity which, acting within the scope of its licensure or certification, provides a covered service defined by the health benefits plan. Health care provider includes, but is not limited to, a physician and other health care professionals licensed pursuant to Title 45 of the Revised Statutes, and a hospital and other health care facilities licensed pursuant to Title 26 of the Revised Statutes.
"Independent utilization review organization" means an independent entity comprised of physicians and other health care professionals who are representative of the active practitioners in the area in which the organization will operate and which is under contract with the department to provide medical necessity or appropriateness of services appeal reviews pursuant to this act.
"Managed behavioral health care organization" means an entity, other than a carrier, which contracts with a carrier to provide, undertake to arrange, or administer behavioral health care services to covered persons through health care providers employed by the managed behavioral health care organization or otherwise make behavioral health care services available to covered persons through contracts with health care providers. "Managed behavioral health care organization" does not include a person or entity that, for an administrative fee only, solely arranges a panel of health care providers for a carrier for the provision of behavioral health care services on a discounted fee-for-service basis.
"Managed care plan" means a health benefits plan that integrates the financing and delivery of appropriate health care services to covered persons by arrangements with participating providers, who are selected to participate on the basis of explicit standards, to furnish a comprehensive set of health care services and financial incentives for covered persons to use the participating providers and procedures provided for in the plan.
"Medical necessity" or "medically necessary" means or describes a health care service that a health care provider, exercising the provider's prudent clinical judgment, would provide to a covered person for the purpose of evaluating, diagnosing, or treating an illness, injury or condition, or its symptoms, and that is in accordance with generally accepted standards of medical practice; is clinically appropriate, in terms of type, frequency, extent, site, and duration and considered effective for the covered person's illness, injury, or disease; and is not more costly than an alternative health care service or sequence of services that is at least as likely to produce an equivalent therapeutic or diagnostic result as to the diagnosis or treatment of the covered person's illness, injury, or condition.
"Subscriber" means, in the case of a group contract, a person whose employment or other status, except family status, is the basis for eligibility for enrollment by the carrier or, in the case of an individual contract, the person in whose name the contract is issued.
"Utilization management" means a system for reviewing the appropriate and efficient allocation of health care services under a health benefits plan according to specified guidelines, in order to recommend or determine whether, or to what extent, a health care service given or proposed to be given to a covered person should or will be reimbursed, covered, paid for, or otherwise provided under the health benefits plan. The system may include: preadmission certification, the application of practice guidelines, continued stay review, discharge planning, preauthorization of ambulatory care procedures and retrospective review.
(cf: P.L.2005, c.172, s.1)
2. Section 9 of P.L.1997, c.192 (C.26:2S-9) is amended to read as follows:
9. The contract between a participating health care provider and a carrier which offers a managed care plan:
a. Shall state that the health care provider shall not be penalized or the contract terminated by the carrier because the health care provider acts as an advocate for the patient in seeking appropriate, medically necessary health care services;
b. Shall not provide financial incentives to the health care provider for withholding covered health care services that are medically necessary as determined in accordance with section 6 of this act, except that nothing in this subsection shall be construed to limit the use of capitated payment arrangements between a carrier and a health care provider; [and]
c. Shall protect the ability of a health care provider to communicate openly with a patient about all appropriate diagnostic testing and treatment options;
d. Shall state that any change in the carrier's policy concerning the medical necessity of administering a particular treatment, including, but not limited to, the administration of a particular medication, for a particular chronic medical condition, shall not affect the coverage of that treatment being administered under a health care provider's supervision to a covered person who has the particular chronic medical condition, unless the covered person's health care provider has approved the administration of an alternative treatment that would be covered by the carrier;
e. Shall state that if a person has been receiving treatment for a particular chronic medical condition prior to the time the person becomes covered under a managed care plan, the carrier shall cover the treatment if it is recommended by the covered person's health care provider, regardless of the carrier's policy regarding the medical necessity of the treatment for that particular medical condition, unless the covered person's health care provider approves the administration of an alternative treatment that would be covered by the plan;
f. Shall state that as to any prescription drug listed on a prescription drug formulary offered by the carrier as part of a managed care plan, the carrier shall retain the drug on the formulary for at least two years from the date that the drug is first listed on the formulary; and
g. Shall state that any change by the carrier in a prescription drug formulary offered as part of a managed care plan, which change involves removal of a prescription drug from the formulary, shall only be made on January 1 of the plan year and in compliance with subsection f. of this section, and the carrier shall provide notice of the change to all health care providers in the plan by November 15 of the prior year.
(cf: P.L.1997, c.192, s.9)
3. (New section) A carrier that offers a managed care plan shall not require, as a condition for a test or procedure to be covered under a managed care plan, that a covered person's primary care physician be involved with the carrier's preauthorization requirements for ordering the test or procedure in situations in which the test or procedure is being ordered or performed by another physician who has determined that the test or procedure is medically necessary to diagnose or treat the covered person's illness, injury, or condition.
4. This act shall take effect on the 90th day after enactment and shall apply to a health benefits plan delivered, issued, executed or renewed on or after the effective date of this act in which the carrier has reserved the right to change the premium.
STATEMENT
This bill makes various revisions to the "Health Care Quality Act," P.L.1997, c.192 (C.26:2S-1 et seq.), which apply to health insurance carriers that offer a managed care plan.
The bill provides, in cases in which a patient suffers a chronic condition and is under the care of a health care provider, that the carrier must continue to cover the treatment as determined by the health care provider, rather than discontinue coverage because the carrier made changes in its policy concerning the medical necessity of the treatment, for all persons covered under the plan during the course of the treatment.
In addition, if a patient under the care of a health care provider for a chronic condition enrolls in a managed care plan, the carrier must continue covering the treatment, regardless of the carrier's policy as to the medical necessity of the treatment, unless the health care provider agrees to the alternative treatment covered by the plan.
The bill also provides that as to any prescription drug listed on a prescription drug formulary offered by a carrier as part of a managed care plan, the carrier shall retain the drug on the formulary for at least two years from the date that the drug is first listed. In addition, the bill provides that any change in a carrier's formulary offered as part of a managed care plan, which involves removal of a prescription drug from the formulary, shall only be made on January 1 of the plan year, subject to the two-year requirement, and the carrier must provide notice of the change to all health care providers in the plan by November 15 of the prior year.
Further, the bill provides that a carrier that offers a managed care plan shall not require, as a condition for a test or procedure to be covered under a managed care plan, that a covered person's primary care physician be involved with the carrier's preauthorization requirements for ordering the test or procedure in situations in which the test or procedure is being ordered or performed by another physician who has determined that the test or procedure is medically necessary to diagnose or treat the covered person's illness, injury, or condition.
Finally, the bill defines the terms "formulary," "medical necessity," and "generally accepted standards of medical practice" as they apply to the provisions of the "Health Care Quality Act."
