A3368

An Act establishing the Electronic Health Information Technology Fund, and amending and supplementing P.L.2007, c.330.

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

1. (New section) The Legislature finds and declares that:

a. The Office for e-HIT in the Department of Banking and Insurance, in collaboration with the New Jersey Health Information Technology Commission, was directed, under the provisions of P.L.2007, c.330 (C.26:1A-132 et al.), to develop a Statewide health information technology plan that will create an effective, efficient Statewide system of collecting, accessing and distributing electronic health information;

b. Improving the capability to access and exchange electronic information is a key component in improving health care in New Jersey by containing costs and eliminating duplication of services;

c. The benefits of electronic health care information systems are plentiful but require substantial capital outlay by primary care physicians;

d. It is necessary for the State to establish a funding mechanism to provide for the electronic collection and transmission of data by primary care physicians and other providers, so that all participants in the health care system, including patients, providers and payers can benefit from the improved, efficient sharing of information; and

e. After the initial cost of equipment and implementation, health information technology systems will create measurable savings and efficiencies for patients, providers and payers alike. Such savings will greatly offset any fees paid by insurers, thus decreasing rather than increasing the cost of health care delivery.

2. (New section) As used in this act:

“Carrier” means an insurance company, health service corporation, hospital service corporation, medical service corporation or health maintenance organization authorized to issue health benefits plans in this State.

“Covered person” means a person on whose behalf a payer offering the plan is obligated to pay benefits or provide services pursuant to the health benefits plan.

"Covered service" means a health care service provided to a covered person under a health benefits plan for which the payer is obligated to pay benefits or provide services.

“Health care benefits claim” means each individual claim paid by a payer for a covered service.

“Health benefits plan” means a benefits plan which pays or provides hospital and medical expense benefits for covered services, and is delivered or issued for delivery in this State by or through a payer. The term does not include the following plans, policies or contracts: accident only, credit, disability, long-term care, Civilian Health and Medical Program for the Uniformed Services, CHAMPUS supplement coverage, coverage arising out of a workers' compensation or similar law, automobile medical payment insurance, personal injury protection insurance issued pursuant to P.L.1972, c.70 (C.39:6A-1 et seq.), hospital confinement indemnity coverage, the Medicaid program established pursuant to P.L.1968, c.413 (C.30:4D-1 et seq.), the "New Jersey FamilyCare Program" established pursuant to sections 3 through 5 of P.L.2005, c.156 (C.30:4J-10 through C.30:4J-12), or any other State health care assistance program financed in whole or in part through a federal program, unless authorized by federal law and approved by the State.

"Hospital" means a general acute care facility licensed by the Commissioner of Health and Senior Services pursuant to P.L.1971, c.136 (C.26:2H-1 et seq.).

“Payer” means a carrier or an organized delivery system pursuant to P.L.1999, c.409 (C.17:48H-1 et seq.).

"Pharmacy benefits managers" means a corporation, business, or other entity, or unit within a corporation, business, or other entity, that administers prescription drug benefits on behalf of a payer.

3. (New section) There is established in the Department of Banking and Insurance an account, to be administered by the Office for e-HIT, established pursuant to section 8 of P.L.2007, c.330 (C.17:1D-1), to be known as the Electronic Health Information Technology Fund. This account may also be referred to as the e-HIT fund.

4. (New section) Beginning April 1, 2009, and on a quarterly basis thereafter, each payer shall pay a technology reinvestment fee into the e-HIT fund, established pursuant to section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill). The fee shall be equal to 0.199% of one percent of all health care benefits claims paid by the payer for its New Jersey covered persons, including requests for services submitted to pharmacy benefits managers and bioanalytical laboratories, except those bioanalytical laboratories owned, operated, managed or controlled by, and located in, a hospital, in the previous fiscal quarter. If a payer fails to pay the technology reinvestment fee, as determined by the Commissioner of Banking and Insurance, it shall be subject to the penalties set forth in section 5 of P.L. , c. (C. ) (pending before the Legislature as this bill).

5. (New section) a. If the Commissioner of Banking and Insurance finds, after notice and an opportunity to be heard, that any payer has failed to pay the fee established in section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill) within 45 days after notice from the commissioner, or his designee, the commissioner may, in addition to any other remedy or sanction provided for by law, take one or more of the following actions:

(1) Assess an administrative penalty on the payer of not more than $1,000 for each violation and not more than $10,000 for each willful violation; each claim that the payer fails to pay shall constitute a separate violation under this section;

(2) Order the payer to cease and desist any further violation; and

(3) Order the payer to remediate the violation, including the payment of fees in arrears plus interest at the rate of 12 percent per annum.

b. Administrative penalties assessed under this section shall be due and payable no later than the close of the quarter following the quarter in which the technology reinvestment fee was assessed.

6. (New section) The money deposited in the e-HIT fund shall be used by the Office for e-HIT to implement the objectives of the Statewide health information technology plan, which is developed, implemented and overseen by the Office for e-HIT, as approved by the Health Information Technology Commission, pursuant to section 8 of P.L.2007, c.330 (C.17:1D-1).

7. (New section) No later than five years after the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), the Commissioner of Banking and Insurance shall assess the adequacy of funding and make recommendations to the Governor, the Legislature and the Health Information Technology Commission concerning the appropriateness of the rate and continuation of the technology reinvestment fee.

8. (New section) Within 90 days of the effective date of this section, the New Jersey Health Information Technology Commission shall negotiate and enter into specialty-appropriate bulk purchasing agreements for the acquisition of electronic medical records technology by providers of covered services which agreements shall be funded through the e-HIT fund as established in section 3 of this act.

9. Section 8 of P.L.2007, c.330 (C.17:1D-1) is amended to read as follows:

8. a. There is established in the Department of Banking and Insurance the Office for the Development, Implementation, and Deployment of Electronic Health Information Technology in New Jersey, to be known as the Office for e-HIT.

b. The Office for e-HIT, in collaboration with the Health Information Technology Commission, shall develop, implement, and oversee the operation of a Statewide health information technology plan. The plan shall provide for, but not be limited to, a mechanism designed to support the establishment of a secure, integrated, interoperative, and Statewide electronic health information infrastructure for the sharing of electronic health information and electronic health records among health care facilities, health care professionals, public and private payers, and patients, which complies with all State and federal privacy requirements and links all components of the health care delivery system through secure and appropriate exchanges of health information for the purpose of enhancing health care quality, patient safety, communication of patient information, disease management capabilities, patient and provider satisfaction, clinical and administrative cost reductions, fraud and abuse prevention and detection, and public health emergency preparedness. The plan shall also provide for the designation of a custodian for all protected health information that meets federal and State privacy and security laws and is accredited by a national standard setting organization recognized by the department.

c. The Office for e-HIT shall submit the plan to the Health Information Technology Commission for the commission's review and approval.

d. In collaboration with the commission, the Office for e-HIT shall, no later than 18 months after its initial meeting and annually thereafter, submit a joint report to the Governor, and to the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), concerning its activities and the status, and actions taken regarding development, implementation, and oversight, of the Statewide health information technology plan, and the e-HIT fund established pursuant to section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill). The office shall include in that report any findings and recommendations that it desires to make, along with any legislative bills that it desires to recommend for adoption by the Legislature.

(cf: P.L.2007, c.330, s.8)

10. Section 11 of P.L.2007, c.330 is amended to read as follows:

11. This act shall take effect on the 180th day after enactment; except that the Commissioner of Banking and Insurance may take such anticipatory administrative action in advance thereof as shall be necessary for the implementation of the act[, and sections 5, 6, 7 and 9 of this act shall expire five years after the date of enactment].

(cf: P.L.2007, c.330, s.11)

11. (New section) The Office for e-HIT in the Department of Banking and Insurance, pursuant to the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), shall adopt rules and regulations necessary to effectuate the purposes of this act.

12. Section 8 of this act shall take effect immediately and the remainder of this act shall take effect on the first day of the fourth month next following the date of enactment, but the Office for e-HIT may take such anticipatory administrative action in advance thereof as shall be necessary for the implementation of this act.

STATEMENT

This bill establishes the Electronic Health Information Technology Fund, to be known as the e-HIT fund, to be administered by the Office for e-HIT, established pursuant to section 8 of P.L.2007, c.330 (C.17:1D-1) in the Department of Banking and Insurance.

The Office for e-HIT, in collaboration with the New Jersey Health Information Technology Commission, was directed, under the provisions of the "New Jersey Health Information Technology Act," P.L.2007, c.330 (C.26:1A-132 et al.), to develop a Statewide health information technology plan that will create an effective, efficient Statewide system of collecting, accessing and distributing electronic health information. It is necessary for the State to establish a funding mechanism to provide for the electronic collection and transmission of data by primary care physicians and other providers, so that all participants in the health care system, including patients, providers and payers can benefit from the improved, efficient sharing of information. After the initial cost of equipment and implementation, health information technology systems will create measurable savings and efficiencies for patients, providers and payers alike. Such savings will greatly offset the technology reinvestment fees paid by insurers, thus decreasing, rather than increasing, the cost of health care delivery.

The technology reinvestment fee is equal to 0.199% of one percent of all health care benefits claims paid by a health insurance carrier or organized delivery system for its New Jersey covered persons, including requests for service submitted by pharmacy benefits managers and bioanalytical laboratories in the previous fiscal quarter for all covered services provided to a covered person under a health benefits plan. The revenue from the fee will be deposited in the e-HIT fund.

The revenue in the e-HIT fund will be used to implement the objectives of the Statewide health information technology plan. Among these objectives will be the establishment of specialty-appropriate bulk purchasing agreements for the acquisition of electronic medical records technology by providers of covered services.

This bill will also eliminate the provision in P.L.2007, c.330 to “sunset” the Health Information Technology Commission five years after the date of enactment.