Legislature Approves Pair Of Bills To Clarify Health Insurance Reimbursement Rules And Rates For Doctors

TRENTON – The New Jersey State Legislature gave final approval to two bills today that would set out specific guidelines for health insurance providers to follow in authorizing the delivery and payment of health care services by doctors and hospitals.

Bill S-2824, the “Health Claims Authorization, Processing and Payment Act”, would require that “utilization management” occur according to certain standards when it comes to authorizing certain health care services. The bill is sponsored by Senators Barbara Buono, Joseph Vitale and Loretta Weinberg.

“Doctors are finding that too much of their time is being spent navigating the health insurance bureaucracy rather than providing care to their patients,” said Senator Buono, D-Middlesex. “Often, it is uncertain as to how much a doctor will be reimbursed for the treatment they provide, or if they will even be reimbursed at all. By providing a more clear and deliberative process for approvals and upfront reimbursement schedules, we can allow doctors to focus on medicine rather than business.”

Current law requires that insurers respond to authorization requests in an ambiguous “timely” manner. The bill would require that all outpatient service requests be answered within 15 days and all requests for all patients in the emergency room or admitted to a hospital be made within 24 hours. If a request is not made within the given time period, it will be deemed approved automatically.

“The current law is too vague when it comes to how quickly authorization decisions must be made,” said Senator Vitale, D-Middlesex. “Too often, doctors are forced to perform necessary treatments before they get approval, putting themselves at financial risk if the insurance provider ultimately denies the procedure request.Tthe current system can be a nightmare for our medical community.”

The bill would also clarify the rules governing the reimbursement of claims made by health care providers. Current law requires that all electronically submitted claims be paid within 30 days and all paper claims paid within 40 days unless they “require special treatment.” The bill removes the “special treatment” loophole from the law. Additionally, the bill places a one year cap on the time insurers can audit a provider to see if they overpaid previous claims – a practice often used by insurance companies to reduce the amount owed to a provider.

“Unnecessary delays in reimbursements only hurt doctors and the patients they serve,” added Senator Weinberg, D-Bergen, who was also an Assembly sponsor of the bill. “The bills that most often get delayed are not in the hundred dollar range, but rather on the order of tens of thousands of dollars. The fact is, when an insurer has already approved the treatment, doctors shouldn’t have to carry this debt for months while the insurance company drags its feet.”

S-2824 passed the Assembly by a vote of 78-0. It was passed by the Senate on December 15 by a vote of 36-0.

Both houses also passed, S-1314, sponsored by Senator Buono. The bill would require that managed care plans would have to furnish doctors covered under their plan with a fee schedule for the 20 most common fees and services under the doctor’s specialty. The fee schedule would have to be provided within 15 days of request. Health insurance carriers would be required to reimburse doctors according to that fee schedule and would be subject to a $1,000 for each violation. S-1314 passed the both house unanimously.

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