Bill Text: NJ S700 | 2010-2011 | Regular Session | Introduced
Bill Title: Discontinues use of phrase "usual, customary and reasonable" or other words of similar import, on health insurance policies, contracts or related forms.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2010-01-12 - Introduced in the Senate, Referred to Senate Commerce Committee [S700 Detail]
Download: New_Jersey-2010-S700-Introduced.html
STATE OF NEW JERSEY
214th LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2010 SESSION
Sponsored by:
Senator JOSEPH PENNACCHIO
District 26 (Morris and Passaic)
SYNOPSIS
Discontinues use of phrase "usual, customary and reasonable" or other words of similar import, on health insurance policies, contracts or related forms.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel
An Act concerning the filing of certain health insurance policy forms and supplementing Title 17B of the New Jersey Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. As used in this act:
"Commissioner" means the Commissioner of Banking and Insurance.
"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.
2. a. No individual or group health insurance policy, contract or related form, including any application, rider, or endorsement which is made a part of that policy or contract, that contains the phrase "usual, customary and reasonable" or other words of similar import in relationship to the standards for payment of benefits, shall be issued or renewed in this State by a carrier on or after the effective date of this act.
b. The commissioner shall establish by regulation alternative words or phrases that a carrier shall use in its policies, contracts and related forms, other than "usual, customary and reasonable," which explain standards for payment of benefits.
3. The Commissioner of Banking and Insurance shall promulgate and adopt regulations in accordance with the provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) necessary to effectuate the provisions of this act.
4. This act shall take effect immediately.
STATEMENT
This bill would discontinue use of the phrase "usual, customary and reasonable" or other words of similar import, on individual or group health insurance policies, contracts or related forms, including any application, rider, or endorsement which is made a part of that policy or contract. The bill directs the Commissioner of Banking and Insurance to establish by regulation alternative words or phrases that health insurance carriers shall use in their policies, contracts and related forms, other than "usual, customary and reasonable," which explain standards for payment of benefits.
The phrase "usual, customary and reasonable" represents the agreed upon contractual charges between a carrier and an employer or a carrier and a health care provider for health care services under a health benefits plan. However, the use of this phrase is confusing to patients of health care providers who may interpret it to mean that their health care provider is overcharging them.
