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Vitale/Buono Bill to Clarify Health Insurance Reimbursement Rules Passes Senate

TRENTON – The Senate approved legislation today sponsored by Senators Joseph Vitale and Barbara Buono 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.

“For doctors, these new standards will provide the certainty they need to effectively provide care,” said Senator Buono, D-Middlesex. “Currently, if a patient can’t wait the days or weeks it may take their insurance provider to make a decision on treatment, the doctor or hospital caring for the patient is forced to provide the care. They hope the treatment will be eventually authorized, but it is most definitely a gamble, as it is the health care provider stuck footing the bill if authorization is not provided.”

The bill, S-2824, would require that “utilization management” occur according to certain standards when it comes to authorizing certain health care services. 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.

“For many of our doctors and hospitals, the biggest hurdel to overcome in providing the best possible care has nothing to do with medicine, but rather is the unwieldy bureacracies of the insurance companies,” said Senator Vitale, D-Middlesex and Chair of the Senate Health, Human Services and Senior Citizens Committe. “Getting approval by the health insurance companies to get approval for treatment can be longer than the treatment itself. Add on top of that the hassles of getting reimbursed and the current system is 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.

“Often times it’s not a matter of hundreds of dollars that are being unnecessarily delay, but rather tens of thousdans of dollars that are being withheld. This delay places an undue financial burden on our health care system. The fact is, when an insurer has already approved the treatment, it is unnecessary for them to need more than a month to pay a claim,” added Senator Buono.

“New Jerseyans deserve the best health care system possible, and that requires the best doctors in the world to come to our state to practice medicine. By easing the bureaucracy of the insurance companies, we are creating a more welcoming environment for health care professionals that allows them to focus more on caring for their patients and less on pushing paper,” said Senator Vitale.

The bill passed by a vote of 36-0. It now goes to the Assembly for their consideration.

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