New Jersey-2010-A4097-Introduced

An Act concerning health insurance claims and amending and supplementing P.L.1999, c.155.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. Section 5 of P.L.1999, c.155 (C.17B:30-30) is amended to read as follows:

5. a. A payer shall maintain a record which shall be audited by a private auditing firm at the expense of the payer, to be submitted to the commissioner, Governor and the Legislature annually, in a form established by the commissioner by regulation, of the total number of claims submitted to the payer, which shall specify the number of claims, by category:

(1) that are denied because they are for an ineligible service or the health care service was not rendered by an eligible health care provider under the health benefits or dental plan;

(2) that are rejected at their initial submission because of a lack of substantiating documentation;

(3) that are rejected at their initial submission because of incorrect coding or incorrect enrollment information;

(4) that are rejected at their initial submission because of the amount claimed;

(5) that are not paid in accordance with the time limit established by law because the payer deems the claim to require special treatment that prevents timely payments from being made;

(6) that are not paid in accordance with the time limits for payment established by law even though the claims meet the criteria established by law;

(7) upon which the 10% interest penalty established by law has been paid, and the aggregate amount of interest paid for the period covered by the report;

(8) that are denied or referred to the payer's fraud investigation unit, if applicable, or to the Office of the Insurance Fraud Prosecutor in the Department of Law and Public Safety established pursuant to section 32 of P.L.1998, c.21 (C.17:33A-16) because the payer has reason to believe that the claim has been submitted fraudulently; and

(9) any other information the commissioner requires.

b. After reviewing an audit, the commissioner may, if he deems it necessary: require the implementation of a plan of remedial action by the payer; require that the payer's claims processing procedures be monitored by a private auditing firm for a time period he deems appropriate; or both.

If, following an audit, the implementation of a plan of remediation or the monitoring of the payer's claims processing procedures, the commissioner determines that:

(1) an unreasonably large or disproportionate number of eligible claims continue to be rejected, denied, or not paid in a timely fashion for the reasons set forth in paragraph (4), (5) or (6) of subsection a. of this section; or

(2) a payer has failed to pay interest as required pursuant to law, the commissioner shall impose a civil penalty of not more than $10,000 upon the payer, to be collected pursuant to "the penalty enforcement law," N.J.S.2A:58-1 et seq.

c. Every financial examination of a payer performed pursuant to section 11 of P.L.1938, c.366 (C.17:48-11), section 15 of P.L.1940, c.74 (C.17:48A-15), section 26 of P.L.1968, c.305 (C.17:48C-26), section 13 of P.L.1979, c.478 (C.17:48D-13), section 36 of P.L.1985, c.236 (C.17:48E-36), N.J.S.17B:21-1 et seq. or section 9 of P.L.1973, c.337 (C.26:2J-9), as applicable, shall include an examination of the payer's compliance with the provisions of this section.

(cf: P.L.1999, c.155, s.5)

2. Section 6 of P.L.1999, c.155 (C.17B:30-31) is amended to read as follows:

6. a. In addition to the annual audit required by section 5 of this act, the payer shall maintain and report to the commissioner on no less than a quarterly basis, a record of claims as provided in [paragraphs (1) through (9) of] subsection a. of section 5 of this act.

b. After reviewing a report, the commissioner may require an immediate audit of the payer by a private audit firm and after reviewing the audit, if he deems it necessary, may proceed with a remediation or monitoring procedure as provided by subsection b. of section 5 of this act.

(cf: P.L.1999, c.155, s.6)

3. (New section) The Commissioner of Banking and Insurance shall establish and maintain a database that includes a record of all claims for which information is submitted to the commissioner by payers pursuant to sections 5 and 6 of P.L.1999, c.155 (C.17B:30-30 and 17B:30-31).

4. The Commissioner of Banking and Insurance, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), shall adopt such rules and regulations as are necessary to effectuate the purposes of this act.

5. This act shall take effect on the first day of the seventh month next following the date of enactment, but the Commissioner of Banking and Insurance may take such anticipatory administrative action in advance thereof as shall be necessary for the implementation of this act.

STATEMENT

This bill establishes a health insurance claims database in the Department of Banking and Insurance (DOBI).

The bill provides specifically as follows:

� The bill amends P.L.1999, c.155 (C.17B:30-26 et seq.) to require health insurers to maintain an audited record, which is to be submitted to the Commissioner of DOBI, the Governor and the Legislature, in a form established by the commissioner by regulation, of the total number of claims submitted to the insurer.

� This record is to specify the number of claims, by category, that each insurer is already required to submit under the existing provisions of this law (including, for example, claims that are denied, rejected, or not paid on a timely basis as required under law).

� The provisions of the bill would apply to the following insurers: health, hospital and medical service corporations; commercial individual and group health insurers; health maintenance organizations; and dental service corporations and dental plan organizations.

� The Commissioner of DOBI is to establish and maintain a database that includes a record of all claims for which information is submitted to the commissioner by insurers pursuant to sections 5 and 6 of P.L.1999, c.155 (C.17B:30-30 and 17B:30-31).

� The bill takes effect on the first day of the seventh month following enactment, but authorizes the commissioner to take anticipatory administrative action in advance as necessary for its implementation.