Bill Text: NJ A3858 | 2024-2025 | Regular Session | Introduced
Bill Title: Requires collection of data by health insurers regarding health insurance claims and decisions made using automated utilization management systems.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced) 2024-02-27 - Introduced, Referred to Assembly Financial Institutions and Insurance Committee [A3858 Detail]
Download: New_Jersey-2024-A3858-Introduced.html
Sponsored by:
Assemblyman HERB CONAWAY, JR.
District 7 (Burlington)
SYNOPSIS
Requires collection of data by health insurers regarding health insurance claims and decisions made using automated utilization management systems.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning collection of certain data regarding health insurance claims and automated utilization management systems and supplementing P.L.1999, c.352 (C.17B:30-26 et seq.) and P.L.2005, c.352 (C.17B:30-48 et seq.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. In addition to requirements for the maintenance of records by a payer pursuant to section 5 of P.L.1999, c.155 (C.17B:30-30), a payer shall maintain, and the Department of Banking and Insurance shall make publicly available, data on health benefit plan claims in the following categories:
(1) claims submitted for in-network and out-of-network health care providers;
(2) claims originally denied that were appealed and the number of appeals sustained and overturned;
(3) claims approved and denied in the process of prior authorization;
(4) the procedures of each medical specialty for which a claim is most frequently denied; and
(5) any other data the Commissioner of Banking and Insurance requires.
b. The data to be submitted by a payer pursuant to this section shall be submitted annually, by a date and in a form and manner as determined by the commissioner.
c. A payer who is determined to have denied, without proper justification, at least 20 percent of claims received in a year shall, as a penalty, return to a covered person a dollar amount equal to the cost paid by the covered person for the services denied for coverage by the payer.
d. The commissioner shall adopt, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), any rules and regulations necessary to effectuate the purposes of this section.
2. a. Every claim submitted to a payer shall be reviewed by at least one medical director employed by or contracted with the payer.
b. A payer shall annually submit to the Department of Human Services and the Department of Banking and Insurance and publicly disclose, in a clear and conspicuous location on the payer's Internet website, the payer's claim rejection rates each year. The information to shall include, but not be limited to:
(a) the total number of claim denials and total number of claim approvals made by the payer;
(b) the total number of claim denials and total number of claim approvals by a physician or medical director;
(c) the average length of time the payer takes to review a claim; and
(d) the average length of time the payer takes to review a claim, arranged by physician and medical director.
c. A physician or medical director reviewing claims for a payer shall include on all denial notices the physician or medical director's claim denial rate and the average amount of time it takes for the physician or medical director to review a claim.
d. A physician or medical director reviewing claims for a payer shall include instructions, on all denial notices and explanation of benefits notices, explaining how to access consumer assistance through the Department of Banking and Insurance. The instructions shall include a link to the consumer assistance webpage of the Department of Banking and Insurance and shall include all the information contained therein.
e. A carrier shall disclose, in a clear and conspicuous location on the carrier's Internet website:
(1) whether or not the carrier uses an automated utilization management system; and
(2) how many claims were reviewed using the automated utilization management system in the previous year.
f. The Department of Banking and Insurance shall have the authority to audit at any time a payer's automated utilization management system and the data the payer collects pursuant to this section in using that system. If necessary, the department may contract with a third-party entity to perform the audit pursuant to this subsection.
g. The commissioner shall adopt, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), any rules and regulations necessary to effectuate the purposes of this section.
h. As used in this section, "automated utilization management system" means an automated system for reviewing the appropriate and efficient allocation of health care services under a health benefits plan according to specified guidelines, in order to recommend or determine whether, or to what extent, a health care service given or proposed to be given to a covered person should or will be reimbursed, covered, paid for, or otherwise provided under the health benefits plan and which may use artificial intelligence or other type of software to automate the process of making recommendations or determinations. The system may include, but shall not be limited to: preadmission certification; the application of practice guidelines; continued stay review; discharge planning; prior authorization of ambulatory care procedures; and retrospective review.
3. This act shall take effect on the first day of the thirteenth month next following the date of enactment and be applicable to claims approved, denied or appealed for health benefit plans that are delivered, issued, executed, or renewed on or after the effective date.
STATEMENT
This bill modifies current law requiring the collection of certain data from health insurers. Specifically, the bill requires, on an annual basis, that a payer, or a carrier or an organized delivery system who is doing business in New Jersey and is under a contractual obligation to pay insured claims, maintain, and the Department of Banking and Insurance to make publicly available, data on health benefit plan claims regarding various matters, including the number of claims originally denied that were appealed and the number of appeals sustained and overturned and the procedures of each medical specialty for which a claim is most frequently denied. Additional data may be collected as authorized by the department. A payer who is determined to have denied, without proper justification, at least 20 percent of claims received in a year is, as a penalty, to return to a covered person a dollar amount equal to the cost paid by the covered person for the services denied for coverage by the payer.
Additionally, the bill modifies current law governing utilization management by establishing certain reporting requirements for data. Specifically, the bill requires that: (1) every claim submitted for utilization management be reviewed by at least one medical director employed by or contracted with a payer; and (2) payers submit annually to the Department of Human Services and the Department of Banking and Insurance and to publicly disclose, in a clear and conspicuous location on the payer's Internet website, certain information concerning the payer's claim rejection rates each year.
Pursuant to the bill, a physician or medical director reviewing claims for a payer is required to include on all denial notices the physician or medical director's claim denial rate and the average amount of time it takes for the physician or medical director to review a claim. Furthermore, a physician or medical director reviewing claims for a payer is to include instructions, on all denial notices and explanation of benefits notices, explaining how to access consumer assistance through the Department of Banking and Insurance.
Health insurance carriers are also required under the bill to disclose, in a clear and conspicuous location on the carrier's Internet website: (1) whether or not the carrier uses an automated utilization management system; and (2) how many claims were reviewed using the automated utilization management system in the previous year. Lastly, the bill authorizes the Department of Banking and Insurance to audit at any time a payer's automated utilization management system and the data the payer collects in using that system.
Under the bill, an "automated utilization management system" means an automated system for reviewing the appropriate and efficient allocation of health care services under a health benefits plan according to specified guidelines, in order to recommend or determine whether, or to what extent, a health care service given or proposed to be given to a covered person should or will be reimbursed, covered, paid for, or otherwise provided under the health benefits plan and which may use artificial intelligence or other type of software to automate the process of making recommendations or determinations.
