SENATE, No. 2241

STATE OF NEW JERSEY

215th LEGISLATURE

 

INTRODUCED OCTOBER 4, 2012

 


 

Sponsored by:

Senator  LORETTA WEINBERG

District 37 (Bergen)

Senator  JOSEPH F. VITALE

District 19 (Middlesex)

Senator  ROBERT W. SINGER

District 30 (Monmouth and Ocean)

 

Co-Sponsored by:

Senators Allen, Buono, Gordon and Madden

 

 

 

 

SYNOPSIS

     Prohibits Medicaid managed care organizations from reducing provider reimbursement rates without approval from DHS.

 

CURRENT VERSION OF TEXT

     As introduced.

  


An Act concerning Medicaid managed care organizations and supplementing Title 30 of the Revised Statutes.

 

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

 

     1.  a.  A health maintenance organization that contracts with the Division of Medical Assistance and Health Services in the Department of Human Services to provide benefits under a managed care plan to persons who are eligible for medical assistance under P.L.1968, c.413 (C.30:4D-1 et seq.) or P.L.2005, c.156 (C.30:4J-8 et al.) shall not reduce reimbursement rates to participating health care providers in that plan without obtaining prior written approval to do so from the Commissioner of Human Services.  The approval by the commissioner shall be subject to the requirements of subsection b. of this section.

     b.  The health maintenance organization shall be required to:

     (1)  apply on a form and in a manner set forth by the commissioner to obtain approval pursuant to subsection a. of this section;

     (2)  demonstrate to the satisfaction of the commissioner that the health maintenance organization has taken all appropriate actions to reduce the cost of providing benefits to eligible recipients covered by that plan, including:  cost-effective utilization review measures as determined by the commissioner; elimination of unnecessary administrative expenses; enhanced fraud detection and recovery efforts; and any other actions that the commissioner may require as a prior condition of obtaining approval;

     (3)  demonstrate to the satisfaction of the commissioner that the proposed reduction in provider reimbursement rates will not adversely impact the quality and accessibility of health care services provided to eligible recipients covered by the plan; and

     (4)  comply with any prospective requirements established by the commissioner at the time, and as a condition, of granting such approval.

     c.  The Division of Medical Assistance and Health Services shall conduct a public hearing on the proposed reduction in reimbursement rates at least 30 days after receipt of the application by the health maintenance organization pursuant to subsection b. of this section, but before making a decision on whether to approve the proposed reduction.

 

     2.  This act shall take effect immediately, and shall apply to any contract that a health maintenance organization has entered into with the Division of Medical Assistance and Health Services in the Department of Human Services to provide benefits under a managed care plan to persons who are eligible for medical assistance under P.L.1968, c.413 (C.30:4D-1 et seq.) or P.L.2005, c.156 (C.30:4J-8 et al.), which is in effect on the effective date of this act or executed thereafter.

 

 

STATEMENT

 

     The purpose of this bill is to prohibit Medicaid managed care organizations from reducing provider reimbursement rates without approval from the Department of Human Services (DHS).

     Under this bill, a health maintenance organization (HMO) that contracts with the Division of Medical Assistance and Health Services (DMAHS) in DHS to provide benefits under a managed care plan to persons who are eligible for Medicaid or the NJ FamilyCare Program is not to reduce reimbursement rates to participating health care providers in that plan without obtaining prior written approval to do so from the Commissioner of Human Services.

     In order to obtain such approval by the commissioner, the HMO is required to:

     -- apply on a form and in a manner set forth by the commissioner to obtain such approval;

     -- demonstrate to the satisfaction of the commissioner that the HMO has taken all appropriate actions to reduce the cost of providing benefits to eligible recipients covered by that plan, including:  cost-effective utilization review measures as determined by the commissioner; elimination of unnecessary administrative expenses; enhanced fraud detection and recovery efforts; and any other actions that the commissioner may require as a prior condition of obtaining approval;

     -- demonstrate to the satisfaction of the commissioner that the proposed reduction in provider reimbursement rates will not adversely impact the quality and accessibility of health care services provided to eligible recipients covered by the plan; and

     -- comply with any prospective requirements established by the commissioner at the time, and as a condition, of granting such approval.

     DMAHS is required to conduct a public hearing on the proposed reduction in reimbursement rates at least 30 days after receipt of the application by the health maintenance organization pursuant to the bill, but before making a decision on whether to approve the proposed reduction.