Vitale/Buono Bill Would Clarify Health Insurance Reimbursement Rules

TRENTON – The Senate Commerce Committee 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 most doctors and hospitals, providing the best possible care for their patients is only half the battle,” said Senator Vitale, D-Middlesex. “Dealing with the bureaucracies created by the health insurance companies to get approval for treatment and final reimbursement can be a nightmare. For doctors, these new standards will be more timely and less uncertain than the current system. “

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.

“Currently, it is often the case that a patient can’t wait the days or weeks it may take their insurance provider to make a decision on a request,” said Senator Buono, D-Middlesex. “In these cases, the doctor or hospital caring for the patient is forced to provide the care with the hope that it will be eventually authorized. This can be a gamble for them, as it is the health care provider stuck footing the bill if authorization is not provided.”

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.

“The delay of payments to doctors and hospitals places an undue financial burden on our health care system. The fact that it’s payments in the tens of thousands range that get delayed most often only aggravates the problem. 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.

“We are looking to do everything possible to make New Jersey a more welcoming place for doctors to practice medicine. By easing the bureaucracy of the insurance companies, we allow them to focus more on caring for their patients and less on pushing paper,” said Senator Vitale.

The bill passed the Committee by a vote of 5-0. It now goes to the full Senate for their consideration.

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