ASSEMBLY, No. 145

STATE OF NEW JERSEY

213th LEGISLATURE

 

PRE-FILED FOR INTRODUCTION IN THE 2008 SESSION

 


 

Sponsored by:

Assemblyman RUBEN J. RAMOS, JR.

District 33 (Hudson)

 

 

 

 

SYNOPSIS

     The “New Jersey Board of Health Care Management Act”; appropriates $10,000,000.

 

CURRENT VERSION OF TEXT

     Introduced Pending Technical Review by Legislative Counsel

  


An Act concerning certain health benefits plans, supplementing P.L.1997, c.192 (C.26:2S-1 et seq.), and making an appropriation.

 

     Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

     1.    This act shall be known and may be cited as the “New Jersey Board of Health Care Management Act.”

 

     2.    As used in this act:

     “Board” means the New Jersey Board of Health Care Management established by section 3 of this act.

     “Board certification” means the approval given by the board to indicate that a health benefits plan meets certain standards as provided in this act regarding quality and value.

     “Volunteer medical services” means medical care provided without charge to low-income patients for health care services for which the patient is not covered by any carrier or any public or private third party payer, in accordance with standards, procedures, requirements, and limitations as established by the board.

 

     3.    a.  There is created a body politic and corporate to be known as the New Jersey Board of Health Care Management. For the purposes of complying with the provisions of Article V, Section IV, paragraph 1 of the New Jersey Constitution, the board is allocated in but not of the Department of Banking and Insurance, but notwithstanding this allocation, the board shall be independent of any supervision or control by the department or by any other board or officer thereof. The board shall submit its budget request directly to the Division of Budget and Accounting in the Department of Treasury. The purpose of the board is to establish uniform medical fee schedules for health care procedures and services which are covered by health benefits plans.

     b.    The board shall have the duties and powers established by this act. The board shall consist of 11 members as follows: the Commissioner of Health and Human Services, ex officio; the Commissioner of Banking and Insurance, ex officio; and nine public members appointed by the Governor with the advice and consent of the Senate, two of whom shall be licensed physicians, two of whom shall represent the interests of licensed carriers authorized to do business in the State, one of whom shall represent the interests of licensed health care facilities, one of whom shall be a licensed dentist, one of whom shall be an advanced practice nurse, and two of whom shall represent the interests of consumer health organizations. Initially, three of the appointed members shall serve for a three-year term, three shall serve for a two-year term, and three shall serve for a one-year term. Thereafter, all appointed members shall serve for three year terms or until such time as a successor is appointed and duly qualified. An appointed member of the board shall be eligible for reappointment. Vacancies on the board shall be filled for the unexpired terms in the same manner as original appointments. The board shall annually elect one of its members to serve as chairperson. Ex officio members may be represented by designees. The board shall organize upon the appointment of a majority of its members.

     c.     Six members of the board shall constitute a quorum, and the affirmative vote of six members of the board shall be necessary and sufficient for any action taken by the board. A vacancy in the membership of the board shall not impair the right of a quorum to exercise all the rights and duties of the board. Members shall serve without pay, but shall be reimbursed for actual expenses necessarily incurred in the performance of their duties. The chairperson of the board shall report to the Governor and to the Legislature, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), no less than annually.

     d.    Meetings of the board shall be subject to the “Senator Byron M. Baer Open Public Meetings Act,” P.L.1975, c.231 (C.10:4-6 et seq.).

 

     4.    The board shall employ an executive director to supervise the administrative affairs and general management and operations of the board, who shall also serve as secretary of the board, ex officio, but shall be ineligible to vote. The executive director shall receive a salary commensurate with the duties of the office. The executive director may appoint other officers and employees of the board necessary to the functioning of the board. The executive director shall, with the approval of the board:

     a.     plan, direct, coordinate, and execute administrative functions in conformity with the policies and directives of the board;

     b.    employ professional and clerical staff as necessary;

     c.     report to the board on all operations under his control and supervision;

     d.    prepare an annual budget and manage the administrative expenses of the board; and

     e.     undertake any other activities necessary to implement the powers and duties set forth in this act.

 

     5.    The goal of the board is to administer the use by carriers of board certified health benefits plans, using uniform medical fee schedules for all covered services provided to insureds by any health care provider as a means to replace the use of managed care plan systems. For these purposes, notwithstanding any other law to the contrary, the board is authorized:

     a.  to develop a plan of operation for the board, which shall include, but not be limited to, establishing the following:

     (1) a transition plan, in consultation with the Department of Banking and Insurance and the Department of Health and Senior Services, to phase out the current managed care system over a period of two years from the effective date of this act, which plan shall include the means for a transition to the offering of health benefits plans certified by the board as consistent with the requirements of this act;

     (2) procedures for establishing and adjusting as necessary uniform medical fee schedules for all health care procedures and services provided by health care providers;

     (3) procedures and minimum requirements for the selection and certification of health benefits plans to be offered by carriers; 

     (4) procedures for the mandatory arbitration of disputes between carriers, health care providers, and insureds, which procedures shall include, in situations in which a carrier disputes its responsibility to pay an insured claim submitted by a hospital or other health care facility, a requirement that the carrier pay the claim as submitted, prior to submitting the disputed claim to the arbitration process for resolution;

     (5) a system of conducting, in coordination with the Department of Banking and Insurance, periodic forensic audits of all carriers;

     (6) procedures which each licensed physician shall follow to provide volunteer medical services on an annual basis in accordance with standards to be established by the board;

     (7) a program, in coordination with the Department of Banking and Insurance, to reimburse licensed physicians for their medical malpractice liability insurance premiums, for those licensed physicians that provide sufficient levels of volunteer medical services in accordance with standards to be established by the board;

     (8) procedures which each licensed general hospital shall follow to determine whether a person, who would be eligible for charity care for health care services provided by the hospital, is eligible for any coverage for those services under any State or federal health benefits program, and to apply any payment or reimbursement for services obtained under any program to the cost of providing those services; and           

     (9) a uniform methodology, in coordination with the Department of Banking and Insurance, for calculating and reporting minimum loss ratios which shall be applied by carriers offering health benefits plans, and which shall be calculated on the basis of paid claims experience in relation to written premiums and the carrier’s annual return on investments to determine the minimum loss ratio to be applied; 

     b.    to contract with professional service firms as may be necessary in its judgment, and to fix their compensation;

     c.     to adopt by-laws for the regulation of its affairs and the conduct of its business;

     d.    to adopt an official seal and alter the same;

     e.     to maintain an office in the State; and

     f.     to sue and be sued in its own name.

 

     6.    Upon written notification by the board to the Department of Health and Senior Services and the Department of Banking and Insurance, that the transition plan implemented pursuant to section 5 of this act has been completed to the extent that the board is prepared to consider health benefits plans for certification:

     a.  A carrier shall only offer health benefits plans that have been certified by the board, authorized by the Commissioner of Banking and Insurance and underwritten by a carrier as of a date certain that shall be specified by the board.

     b.  Board certification shall only be assigned to a health benefits plan:

     (1) that the board determines provides reimbursement to insureds for appropriate health care services obtained by an insured from any health care provider, in accordance with all uniform medical fee schedules, less deductibles, as established by the board, which fee schedules may provide reimbursement on the basis of diagnostic related payment by diagnostic code;

     (2) offered by a carrier that has established a health care service center to provide insureds and prospective insureds with information on selecting appropriate health care providers to meet health care needs based on an evaluation of the individual circumstances of the insured or prospective insured, including information about the extent to which the health care providers’ charges for procedures and services covered by the plan are within the uniform medical fee schedules established by the board; 

     (3) offered by a carrier that, in addition to its board certified health benefits plan, also offers supplemental health and medical expense benefits plans to cover insureds for charges by health care providers for procedures and services that exceed those charges provided for in the uniform medical fee schedules established by the board; and

     (4) that contains a detailed description of the benefits offered, including maximums, limitations, exclusions, deductibles, and other benefit limits as approved by the board.

 

     7.  a.  The board may assess a surcharge to all health benefits plans offered by a carrier and certified by the board which surcharge shall be used only to pay for administrative and operational expenses of the board; provided, however, that the surcharge shall be applied uniformly to all health benefits plans certified by the board.

     b.  A carrier offering plans for board certification shall provide to the board those reports which the board reasonably determines to be necessary to enable the board to carry out its duties under this act.

 

     8.  a.  The board shall be liable for all claims for activities, whether ministerial or discretionary, of any board member, officer, or employee of the board acting in that capacity, except for willful dishonesty or intentional violation of the law, in the same manner and to the same extent as a private person under like circumstances; provided, however, that the board shall not be liable to levy or execution on any real or personal property to satisfy judgment, for interest prior to judgment, for punitive damages or for any amount in excess of $100,000.

     b.  A person shall not be liable to the State, to the board or to any other person as a result of activities conducted, whether ministerial or discretionary, as a board member, officer or employee of the board except for willful dishonesty or intentional violation of the law; provided, however, that the person shall provide reasonable cooperation to the board in the defense of any claim.  Failure of the person to provide reasonable cooperation shall cause him to be jointly liable with the board, to the extent that the failure prejudiced the defense of the action.

     c.  The board may indemnify or reimburse any person, or his personal representative, for losses or expenses, including legal fees and costs, arising from any claim, action, proceeding, award, compromise, settlement or judgment resulting from the person’s activities, whether ministerial or discretionary, as a member, officer or employee of the board; provided that the defense or settlement thereof shall have been made by counsel approved by the board.  The board may procure insurance for itself and for its board members, officers and employees against liabilities, losses, and expenses which may be incurred by virtue of this section or otherwise.

     d.  A civil action under this section shall not be brought more than three years after the date upon which the cause thereof accrued.

     e.  Upon dissolution, liquidation, or other termination of the board, all rights, funds, assets, and properties of the board shall be vested in the State.

 

     9.  The board shall keep an accurate account of all its activities and of all its receipts and expenditures and shall annually make a report thereof as of the end of the State fiscal year to the Governor, to the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), and to the State Auditor, the reports to be in a form prescribed by the board, with the written approval of the State Auditor.  The State Auditor may investigate the affairs of the board, severally examine the properties and records of the board, and prescribe methods of accounting and the rendering of periodical reports in relation to projects undertaken by the board. The State Auditor shall conduct a biennial audit of the board.

 

     10.  No later than two years after the board begins operation pursuant to this act and every year thereafter, the board shall submit a written report to the Governor, and the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), on the status and activities of the board. The report shall also be available to the general public upon request.  The study shall review the operation and administration of the board, including surveys and reports on health benefits plans certified by the board, expenses, claims statistics, complaints data, how the board met its goals, other information deemed pertinent by the board, and any recommendations for legislation the board deems necessary to further the purposes of this act.

 

     11.  The board, in consultation with the Commissioner of Banking and Insurance and the Commissioner of Health and Senior Services, shall adopt, pursuant to the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), rules and regulations to effectuate the purposes of this act.

 

     12.  There is appropriated from the General Fund to the Department of Banking and Insurance the amount of $10,000,000 to fund the cost of implementing the program of reimbursements of medical malpractice insurance premiums to licensed physicians established pursuant to paragraph (7) of subsection a. of section 5 of this act.

 

     13.  This act shall take effect immediately.

 

 

STATEMENT

 

     This bill establishes the New Jersey Board of Health Care Management as an independent public entity, in but not of the Department of Banking and Insurance, with certain authority to facilitate the availability and design of health benefits plans offered by carriers and to develop plans to transition from a managed care plan system to a system that requires carriers to reimburse for appropriate health care services obtained by an insured from any health care provider in accordance with uniform medical fee schedules.

     The bill establishes an 11-member board of directors, consisting of the Commissioner of Banking and Insurance and the Commissioner of Health and Senior Services as ex officio members, and nine members appointed by the Governor with the advice and consent of the Senate, with certain categories of appointed member representation as detailed in the bill. The bill also provides for an executive director to supervise operations, subject to the approval of the board.

     The bill authorizes the board to establish:

     (1) a transition plan, in consultation with the Department of Banking and Insurance and the Department of Health and Senior Services, to phase out the current managed care system over a period of two years from the effective date of the bill;

     (2) uniform medical fee schedules for all health care procedures and services provided by health care providers;

     (3) procedures and minimum requirements for the selection and certification of health benefits plans to be offered by carriers; 

     (4) certain procedures for the arbitration of disputes between carriers, health care providers, and insureds;

     (5) a system of conducting, in coordination with the Department of Banking and Insurance, periodic forensic audits of all carriers;

     (6) procedures which each licensed physician shall follow to provide volunteer medical services on an annual basis in accordance with standards to be established by the board;

     (7) a program to reimburse licensed physicians for their medical malpractice liability insurance premiums, for those licensed physicians that provide sufficient levels of volunteer medical services in accordance with standards to be established by the board;

     (8) procedures which each licensed general hospital shall follow to determine whether a person, who would be eligible for charity care for health care services provided by the hospital, is eligible for any coverage for those services under any State or federal health benefits program, and to apply any payment or reimbursement for services obtained under any program to the cost of providing those services; and           

     (9) a uniform methodology for calculating minimum loss ratio standards on the basis of paid claim experience and written premiums, which methodology shall include the carrier’s return on investments in addition to written premiums, in calculating the loss ratio requirements.

     The bill provides that after the appropriate extent of implementation of the transition plan to phase out the current managed care plan system, carriers shall only offer health benefits plans that have been certified by the board, authorized by the Commissioner of Banking and Insurance, and that:

     (1) reimburse insureds for appropriate health care services obtained by an insured from any health care provider, in accordance with all uniform medical fee schedules, less deductibles, as established by the board;

     (2) are offered by a carrier that has established a health care service center to provide insureds and prospective insureds with certain information on selecting appropriate health care providers; 

     (3) are offered by a carrier that, in addition to its board certified health benefits plan, also offers supplemental health and medical expense benefits to cover insureds for charges by health care providers that exceed the uniform medical fee schedules established by the board; and

     (4) contain a detailed description of the benefits offered, including maximums, limitations, exclusions, deductibles, and other benefit limits as approved by the board.

     The bill authorizes the board to maintain an office in the State and perform certain other administrative functions.

     To fund its administrative expenses, the bill allows the board to assess a surcharge to all health benefits plans offered by a carrier through the board. The bill provides immunities from liability, in certain circumstances, for board members, officers, and employees of the board, except in instances of willful dishonesty or intentional violation of the law, and limits the board’s liability in certain respects.

     The bill requires the board to maintain certain records, subjects board operations to audit by the State Auditor, and requires an annual study and a report on board operations to the Governor and Legislature.

     The bill appropriates $10,000,000 from the General Fund to the Department of Banking and Insurance for the program of reimbursements of medical malpractice insurance premiums to licensed physicians established pursuant to this bill.

     Finally, the bill provides the board with the authority, in consultation with the Commissioner of Banking and Insurance and the Commissioner of Health and Senior Services, to adopt rules and regulations to effectuate the purposes of the bill.