SENATE, No. 978

STATE OF NEW JERSEY

218th LEGISLATURE

 

INTRODUCED JANUARY 16, 2018

 


 

Sponsored by:

Senator  JOSEPH F. VITALE

District 19 (Middlesex)

Senator  TROY SINGLETON

District 7 (Burlington)

 

 

 

 

SYNOPSIS

     “New Jersey All-Payer Claims Database Act”; establishes New Jersey All-Payer Claims Database and arbitration process for reimbursing out-of-network health care providers.

 

CURRENT VERSION OF TEXT

     As introduced.

  


An Act establishing the New Jersey All-Payer Claims Database and an arbitration process for managed care reimbursement of out-of-network health care providers and supplementing various parts of the statutory law.

 

     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 All-Payer Claims Database Act.”

 

     2.    The Legislature finds and declares that:

     a.     All-Payer Claims Databases, or APCDs, are an emerging data source that can fill critical information gaps as public policymakers, health care industry leaders, and payers seek solutions for transforming health care delivery;

     b.    APCDs are large-scale databases that systematically collect health care data from a variety of sources and, to date, have been established in a growing number of states that include Colorado, Kansas, Maine, Maryland, Massachusetts, Minnesota, New Hampshire, Oregon, Tennessee, Utah, and Vermont;

     c.     These databases collect health insurance claims information and other health care data from health care payers, providers, and other reporting entities into statewide data repositories designed to inform health policy initiatives such as cost containment and quality improvement efforts;

     d.    APCDs contain medical, pharmacy, and dental claims and eligibility data and are used to report cost, use, and quality information.  The data typically consist of “service-level” information based on valid claims processed by health care payers, including charges and payments, the provider receiving payment, clinical diagnosis and procedure codes, and patient demographics.  To mask the identity of patients and ensure privacy, states usually encrypt, aggregate, and suppress patient identifiers;

     e.     By collecting all claims and other health care data into a single repository through an APCD, states can gain a complete picture of how much health care costs, how much providers receive from different payers for the same or similar services, the resources used to treat patients, and variations across a state, and among providers, in the total cost to treat an illness or medical event.  In turn, businesses, consumers, providers, and policymakers can use the information to make better-informed decisions about cost-effective care;

     f.     APCDs are also an important source of information for designing and implementing payment and delivery system reforms, such as pay-for-performance, episode-of-care payments, global payments, medical homes, and accountable care organizations;

     g.    Studies confirm that the United States spends significantly more on health care than other countries but, on the whole, does not

produce better results for patients and does not receive equivalent value for each health care dollar;

     h.    The Institute of Medicine of the National Academy of Sciences has estimated that up to 30 percent of spending on health care in the United States is wasted; however, without comprehensive data on the costs, components, results, and demographics of care, it is difficult to identify and eliminate waste; and, without reliable information about how and where health care dollars are spent and how patients move through the system, states cannot design effective programs to address both unnecessary and inadequate care; and

     i.     It is, therefore, clearly in the public interest to establish an APCD in New Jersey to provide policymakers, providers, and payers with the information needed to support necessary health care reforms that will lead to a more cost-effective, high-quality health care system that benefits the citizens of this State.

 

     3.    As used in this act:

     “Applicable, medically necessary out-of-network services” means medically necessary health care services that are: covered under a managed care health benefits plan providing for both in-network and out-of-network benefits; and provided by an out-of-network health care provider in the event that a covered person utilizes an in-network health care facility for covered, medically necessary health care services and, due to any reason, in-network health care services are unavailable in that facility.

     “Board” means the New Jersey All-Payer Claims Database Advisory Board established pursuant to this act.

     “Carrier” means an entity subject to the insurance laws and regulations of this State, or subject to the jurisdiction of the commissioner, that contracts or offers to contract to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services under a health benefits plan, including:  an insurance company authorized to issue health benefits plans; a health maintenance organization; a health, hospital, or medical service corporation; or any other entity providing a health benefits plan.  The term “carrier” shall not include a joint insurance fund established pursuant to State law.  For the purposes of this act, carriers that are affiliated companies shall be treated as one carrier, except that in the case of an insurance company, health service corporation, hospital service corporation, or medical service corporation that is an affiliate of a health maintenance organization located in New Jersey or a health maintenance organization located in New Jersey that is affiliated with an insurance company, health service corporation, hospital service corporation, or medical service corporation, the health maintenance organization shall be treated as a separate carrier.

     “Commissioner” means the Commissioner of Banking and Insurance.

     “Covered person” means a person on whose behalf a payer is obligated to pay health care expense benefits or provide health care services.

     “Covered person eligibility file” means a data file composed of demographic information for each covered person eligible for medical, pharmacy, or dental insurance benefits for one or more days of coverage at any time during the reporting period as established by the commissioner.

     “Database” means the New Jersey All-Payer Claims Database established pursuant to this act.

     “Dental claims file” means a data file composed of dental service-level remittance information, including, but not limited to, covered person demographics, provider information, charge and payment information, and current dental terminology codes from all non-denied adjudicated claims for each billed service.

     “Department” means the Department of Banking and Insurance.

     “Health benefits plan” means a benefits plan that pays or provides hospital, medical, dental, or pharmaceutical expense benefits for covered services, and is delivered or issued for delivery in this State by or through a carrier.  Health benefits plan includes, but is not limited to, Medicare supplement coverage and Medicare Advantage contracts to the extent not otherwise prohibited by federal law.  For the purposes of this act, health benefits plan shall 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.), or hospital confinement indemnity coverage.

     “Health care data” means data from a reporting entity relating to the provision, financing, and administration of health care, as applicable. Health care data shall include, but not be limited to, information regarding: medical, pharmacy, and dental insurance claims; eligibility and enrollment; health care utilization; health care safety and quality; health outcomes; and costs.

     “Health care facility” means a health care facility licensed pursuant to P.L.1971, c.136 (C.26:2H-1 et seq.).

     “Health care professional” means a health care professional who is licensed or otherwise authorized to practice a health care profession pursuant to Title 45 or 52 of the Revised Statutes and is currently engaged in that practice.

     “Health care provider” means a health care professional or health care facility.

     “Medicaid” means the State Medicaid program established pursuant to P.L.1968, c.413 (C.30:4D-1 et seq.).

     “Medical claims file” means a data file composed of medical service-level remittance information, including, but not limited to, covered person demographics, provider information, charge and payment information, and clinical diagnosis and procedure codes from all non-denied adjudicated claims for each billed service.

     “Medicare” means the federal Medicare program established pursuant to Pub.L.89-97 (42 U.S.C. s.1395 et seq.).

     “NJ FamilyCare” means the NJ FamilyCare Program established pursuant to P.L.2005, c.156 (C.30:4J-8 et al.).

     “Payer” means: a carrier; an entity under contract with the State Health Benefits Program pursuant to P.L.1961, c.49 (C.52:14-17.25 et seq.) or the School Employees’ Health Benefits Program pursuant to P.L.2007, c.103 (C.52:14-17.46.1 et seq.) to administer public employee health benefits plans; Medicare; Medicaid; or NJ FamilyCare.

     “Pharmacy claims file” means a data file composed of pharmacy service-level remittance information, including, but not limited to, covered person demographics, provider information, charge and payment information, and national drug codes from all non-denied adjudicated claims for each prescription filled.

     “Reporting entity” means a health care provider or payer as defined in this act.

     “Similarly licensed provider” means: for a physician, a physician who is licensed or board certified in the same practice specialty; or, for a health care provider that is not a physician, a health care provider that holds the same type of license.

     “Uniform procedure code” means a procedure code derived from the edition of the Current Procedural Terminology most current at the time of reference, as published annually by the American Medical Association, or from any equivalent uniform procedural coding system specified by the commissioner.

 

     4.    a.  The New Jersey All-Payer Claims Database is established in the Department of Banking and Insurance.

     b.    The purpose of the database shall be to serve as a useful, objective, reliable, and comprehensive health information database that is designed to: improve the transparency of health care costs; identify trends to assist in improving efficiencies within the health care system; provide unbiased information to help inform decisions and negotiations involving health care consumers, providers, and carriers; provide public access to information while protecting patient confidentiality and respecting health care providers; issue such reports as the Commissioner of Banking and Insurance deems appropriate for the purposes of this act in consultation with the New Jersey All-Payer Claims Database Advisory Board established pursuant to this act; and advance improvements in the health of all New Jersey citizens.

     c.     The department shall collect, process, analyze, and report data as provided for under this act.

 

     5.    a.  The commissioner shall establish a New Jersey All-Payer Claims Database Advisory Board to provide input into the development of the database and continuing oversight of its operation.

     b.    The board shall consist of 11 members as follows:

     (1)   the Commissioners of Health and Human Services and the State Treasurer, or their designees, as ex officio members; and

     (2)   eight public members, to be appointed by the commissioner and who are residents of this State, including:

     (a)   one member representing consumer health care advocacy;

     (b)   one member representing employers, who is recommended by the Health Care Payers Coalition of New Jersey;

     (c)   two members representing carriers, who are recommended by the New Jersey Association of Health Plans;

     (d)   two members representing hospitals, who are recommended by the New Jersey Hospital Association; and

     (e)   two members representing the physician community, who are recommended by the Medical Society of New Jersey.

     c.     The public members of the board shall serve without compensation but be reimbursed for any expenses incurred by them in the performance of their duties.

     d.    The public members of the board shall serve for a term of four years, except that of the public members first appointed, three shall serve for a term of four years, three shall serve for a term of three years, and two shall serve for a term of two years.

     e.     Each public member of the board shall hold office for the term of his appointment and until his successor has been appointed.  Vacancies shall be filled in the same manner as the original appointments were made.  A member is eligible for reappointment.

     f.     The board shall organize as soon as practicable after the appointment of its members, but no later than three months after the effective date of this act, and shall select a chairperson and vice-chairperson from among its membership.  The chairperson and vice-chairperson shall each serve two-year terms.

     g.    The department shall provide such staff and resources as the board requires to perform its duties pursuant to this act.

     h.    The commissioner, with the advice of the board, shall appoint an executive director of the database to supervise the administrative affairs and general management and operations of the database.

     i.     All meetings of the board shall be subject to the requirements of the “Senator Byron M. Baer Open Public Meetings Act,” P.L.1975, c.231 (C.10:4-6 et seq.); except that the board may hold a closed session when considering matters relating to litigation, personnel, or contracting.  In addition to complying with the notice requirements of P.L.1975, c.231, the board shall provide electronic notice of its meetings as defined in section 1 of P.L.2002, c.91 (C.10:4-9.1).

     j.     A member of the board shall not be liable in an action for damages to any person for any action taken or recommendation made by the member within the scope of his functions as a member, if the action or recommendation was taken or made without malice.  The members of the board shall be indemnified and their defense of any action provided for in the same manner and to the same extent as employees of the State under the “New Jersey Tort Claims Act,” P.L.1972, c.45 (C.59:1-1 et seq.), on account of acts or omissions in the scope of their service.

 

     6.    a.  The commissioner, with the advice of the board, shall develop and implement policies and procedures for the collection, processing, storage, and analysis of health care data in accordance with this act, so as to:

     (1)   identify the specific health care data to be collected from reporting entities or other data sources for incorporation into the database;

     (2)   determine the standards and methods necessary for collecting health care data in a manner that: minimizes the cost and administrative burden on reporting entities and other data sources; establishes and maintains the database in a cost-effective and efficient manner; and produces timely, relevant, and reliable information for consumers, providers, public and private health care purchasers, and policymakers;

     (3)   use, build, improve upon, and coordinate existing data sources and measurement efforts through the integration of data systems and standardization of concepts;

     (4)   coordinate the development of a linked public and private sector information system;

     (5)   emphasize the collection of data that are useful, relevant, and not duplicative of data already reported to the department or to other State agencies;

     (6)   coordinate with reporting entities and other State agencies, to the greatest extent possible, to: incorporate existing health care data into the database;  identify and minimize duplicative data reporting requirements; and minimize any additional reporting burden imposed upon reporting entities;

     (7)   establish agreements with, or submit requests to, the Centers for Medicare & Medicaid Services to obtain Medicare health care data including, but not limited to, health care claims data to be reported in accordance with this act;

     (8)   coordinate with the Department of Human Services to obtain Medicaid health care data and NJ FamilyCare health care data, including, but not limited to, Medicaid health care claims data and NJ FamilyCare health care claims data to be reported in accordance with this act;

     (9)   preserve the reliability, accuracy, and integrity of collected data while ensuring that the data are made publicly available in accordance with the provisions of this act;

     (10) comply with the provisions of the federal health privacy rule set forth in sections 160 and 164 of Title 45, Code of Federal Regulations, and with other proprietary requirements related to the collection and release of health care data; and

     (11) utilize the database to measure trends and identify outliers within the State health care system related to: health care safety and quality; health care utilization; health outcomes; costs; and other areas in the public interest as identified by the commissioner with the advice of the board.

     b.    A reporting entity shall report health care data for the purposes of this act, according to a schedule established by the commissioner with the advice of the board, but at least annually.  Reporting entities shall commence reporting health care data for the purposes of this act upon certification by the commissioner that the database is sufficiently operational to receive health care data.  The commissioner shall, no later than one year after the effective date of this act: certify whether the database is sufficiently operational to receive health care data; and, in the event that the database is not sufficiently operational to receive health care data, establish a date by which the database shall commence receiving health care data subject to certification by the commissioner.

     c.     The commissioner, with the advice of the board, shall establish uniform reporting systems for the collection of health care data pursuant to this act and may modify those systems to allow for differences in the scope or type of services and in financial structure among reporting entities pursuant to this act.

     d.    The commissioner, with the advice of the board, shall establish a process by which reporting entities may review their reported health care data prior to the official submission and incorporation of the data within the database.  The commissioner shall also establish appropriate procedures and timeframes under which reporting entities may object to the incorporation of specific health care data within the database.

     e.     The commissioner shall exempt from reporting by a reporting entity: health care data regarding a person who informs the reporting entity of the person’s objection to the data collection based upon a sincerely held religious belief; or health care data regarding a minor whose parent or guardian objects to the data collection based upon a sincerely held religious belief.

     f.     The department may provide an analysis of reported health care data upon request.

     g.    (1) The commissioner may contract with one or more qualified, nongovernmental, independent third parties for services necessary to carry out the data collection, processing, and storage activities required under this act.  Unless permission is specifically granted by the commissioner, the third party shall not release, publish, or otherwise use any information to which the third party has access under its contract and shall otherwise comply with the requirements of this act.

     (2)   The commissioner may enter into all other contracts necessary or proper to carry out the provisions of this act, including contracts allowing department staff to provide technical assistance to other public or private entities with the proceeds used to offset the operational costs of the database.

     h.    The commissioner may solicit, receive, and accept grants, funds, or anything of value from any public or private entity and receive and accept contributions of money, property, labor, or any other thing of value from any legitimate source to support the operation of the database, provided that the commissioner does not have reason to believe that the entity may have a vested interest in the decisions of the commissioner or the board concerning the operation of the database.

 

     7.    a.  The health care data specified in this section shall be reported to the department for the purposes of the database, as prescribed by regulation of the commissioner pursuant to the provisions of this act, with the advice of the board, with respect to the form, medium, content, and frequency of reporting; except that nothing in this section shall be construed to limit the authority of the commissioner to obtain data not specified therein as the commissioner determines necessary to effectuate the purposes of this act.

     b.    Each payer shall submit a completed health care claims data set for all covered persons who are New Jersey residents in accordance with the requirements of this section. Each payer shall also be responsible for the submission of all health care claims processed by any sub-contractor on its behalf. The health care claims data set shall include, but not be limited to, the following files, as applicable: a medical claims file; a pharmacy claims file; a dental claims file; and a covered person eligibility file containing records associated with each of the claims files reported.  The completed health care claims data set shall also include, but not be limited to, a record of all claims for which information is submitted to the commissioner by payers pursuant to sections 5 and 6 of P.L.1999, c.155 (C.17B:30-30 and 17B:30-31).

     c.     (1)  Each hospital shall report a completed uniform hospital discharge data set for each patient discharged, and for each hospital outpatient service occurring, after a date determined by the commissioner.

     (2)   Each health care provider that is not subject to the provisions of paragraph (1) of this subsection shall report a complete data set comparable to the data reported pursuant to paragraph (1) of this subsection as appropriate to that provider.

     (3)   When more than one health care facility is operated by the reporting entity, the required data shall be reported for each health care facility separately; and when a health care provider operates in more than one location, the commissioner may require that the data be reported separately for each location.

     (4)   Each health care facility shall also report such medical record abstract data as the commissioner requires.

     (5)   The commissioner may require that the required discharge data and any required medical record abstract data be merged with associated billing data.  The commissioner shall consult with reporting entities and the board to determine the need for, and extent of, any data merging that may be required pursuant to this paragraph.

     (6)   The commissioner may require the reporting of additional clinical data from reporting entities, except that the submission of data shall be consistent with federal law and regulations.

     d.    Health care providers shall report such health care quality data as the commissioner determines necessary for the purposes of this act, in consultation with the board and any other entity that has relevant expertise and that the commissioner deems suitable to consult for the purposes of this subsection.  The commissioner shall focus efforts to collect health care quality data on those data that may be retrieved in electronic format from within a health care facility or a health care professional’s private practice office.

     e.     (1)  Each health care facility shall report such financial data, including costs of operation, revenues, assets, liabilities, fund balances, other income, rates, charges, and units of services, as the commissioner specifies by regulation, with the advice of the board.

     (2)   The commissioner may require certification of such financial reports and attestation from responsible officials of the reporting entity that the reports have to the best of their knowledge and belief been prepared in accordance with the requirements of the commissioner.

     (3)   Each health care facility shall report such scope of service information as the commissioner determines necessary for the purposes of this act, including, but not limited to:  bed capacity by service provided; special services; ancillary services; physician profiles in the aggregate by clinical specialties; and nursing services.

     (4)   The commissioner shall collaborate with reporting entities, the Commissioner of Health, and any other State officials to incorporate any data into the database that may be otherwise collected by law or regulation and that may meet the requirements of this section.

     f.     In addition to the authority of the commissioner to obtain data to carry out the specific provisions of this act, the commissioner may require reporting entities to furnish information with respect to the nature and quantity of services or coverage provided to the extent necessary to develop proposals for the modification, refinement, or expansion of the systems of data disclosure established under this act.  The commissioner’s authority under this subsection shall include the design and implementation of pilot systems for reporting data that affect selected categories or representative samples of reporting entities.

 

     8.    a.  The department shall produce clearly labeled and easy-to-understand reports utilizing the data contained within the database, relating to such financial data and services and procedures and such reporting entities as the commissioner determines to be in furtherance of the purposes of this act in consultation with the board.

     b.    No later than one year after the effective date of this act, and on an annual basis thereafter, the commissioner shall submit a report to the Governor, and to the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), analyzing health care cost trends across the State.  The reports issued pursuant to this section: shall utilize health care data collected by the database, as available; may utilize applicable health care data from other sources, pending implementation of the database or as otherwise necessary; and shall not release any information specifically identifying a patient, provider, or carrier.  The collection, storage, and release of health care data and other information within reports issued pursuant to this section shall be subject to the provisions of the federal health privacy rule set forth in sections 160 and 164 of Title 45, Code of Federal Regulations.

 

     9.    The commissioner shall adopt rules to provide for public access to data contained within the database and to implement the requirements of this section.

     a.     The rules shall be designed to make available to any person, upon request, data provided to the database pursuant to this act, except privileged medical information and confidential information, and to ensure that the data are not used by any recipient thereof in such a manner to directly or indirectly identify individual patients, providers, or carriers.

     b.    The rules shall establish criteria for determining whether data contained within the database are to be treated as confidential or proprietary and procedures to give affected reporting entities notice and an opportunity to file objections to the release of data that may be considered confidential or proprietary.

     c.     The rules may allow exceptions to the confidentiality requirements only to the extent authorized in this subsection.

     (1)   The department may provide access to researchers with established protocols that have been approved by the commissioner for safeguarding confidential data.

     (2)   Identifying information shall be used only to gain access to medical records and other data pertaining to public health.

     (3)   Medical information about any patient identified by name shall not be provided without the department having obtained the patient’s prior consent, except when the information sought pertains only to the verification or comparison of data and the commissioner finds that confidentiality can be adequately protected without the patient’s consent.  The commissioner, in consultation with the board and reporting entities, shall develop policies and procedures for obtaining patients’ prior consent pursuant to this section.

     (4)   Those persons conducting the research or investigation shall not disclose medical information about any patient identified by name to any other person without that patient’s consent.

     (5)   Those persons gaining access to medical information about an identified patient shall use that information to the minimum extent necessary to accomplish the purposes of the research for which approval was granted.

     (6)   The protocol for any research shall be designed to:  preserve the confidentiality of all data that can be associated with identified patients; specify the manner in which contact is made with patients; and maintain public confidence in the protection of confidential information.

     (7)   The release of any data from the database shall be subject to approval and monitoring by an institutional review board that holds an assurance with the United States Department of Health and Human Services.  The commissioner shall not grant approval for access to identifying information for patients under this subsection if the commissioner finds that the proposed identification of patients would violate any State or federal law or regulations or diminish the confidentiality of health care information or public confidence in the protection of that information in a manner that outweighs the expected benefit to the public of the proposed investigation.

     d.    The rules shall govern the release, publication, and use of analyses, reports, or compilations derived from the data made available from the database.

     e.     The rules shall govern the release, publication, and use of any data used to establish a reasonable and clearly defined payment range for managed care reimbursement of applicable, medically necessary out-of-network services pursuant to section 13 of P.L.    , c.    (C.       ) (pending before the Legislature as this bill).

 

     10.  a.  There is established in the Department of the Treasury a nonlapsing revolving fund to be known as the “New Jersey All-Payer Claims Database Trust Fund.”  This fund shall be the repository for monies collected pursuant to subsection c. of this section and other monies received as grants or otherwise appropriated for the purposes of the database.  The monies in the fund shall be used only to pay for administrative and operational expenses that the department incurs in order to carry out its responsibilities pursuant to this act.

     b.    The State Treasurer shall be the custodian of the fund, and all disbursements from the fund shall be made by the State Treasurer upon vouchers signed by the commissioner or the commissioner’s designee.  The monies in the fund shall be invested and reinvested by the Director of the Division of Investment in the Department of the Treasury as are other trust funds in the custody of the State Treasurer in the manner provided by law.  Interest received on the monies in the fund shall be credited to the fund.

     c.     (1)  The commissioner shall apply, and periodically revise as necessary, a uniform annual surcharge to all health benefits plans as the commissioner determines necessary to effectuate the purposes of this act.

     (2)   The commissioner may apply, and periodically revise as necessary, a uniform annual assessment against health care facilities as the commissioner determines necessary to effectuate the purposes of this act.

     (3)   Any surcharges or assessments applied by the commissioner pursuant to paragraphs (1) and (2) of this subsection shall not be fixed at a level that would generate revenue in excess of amounts necessary to effectuate the purposes of this act.

     (4)   The department may charge a reasonable user fee for the right to access and use the data contained within the database; however, the fee may be reduced or waived for users that demonstrate a plan to use the data in research of general value to the public health or an inability to pay the scheduled fee, as provided in rules to be adopted by the commissioner with the advice of the board.

     (5)   The department may provide technical assistance to other public or private entities, for a fee as determined by contract pursuant to paragraph (2) of subsection g. of section 6 of this act, utilizing data released for the purposes of the database.

     (6)   The proceeds collected pursuant to this subsection shall be deposited into the fund.

     d.    The penalties collected pursuant to section 11 of this act shall be deposited into the fund.

 

     11.  a.  A person or entity that violates any provision of this act, or the rules and regulations adopted pursuant thereto, shall be liable to a penalty as provided in this subsection.  The penalty shall be collected by the commissioner in the name of the State in a summary proceeding in accordance with the “Penalty Enforcement Law of 1999,” P.L.1999, c.274 (C.2A:58-10 et seq.).

     (1)   A health care facility or carrier that violates any provision of this act shall be liable to a penalty of not more than $1,000 for each violation.  Every day upon which a violation occurs shall be considered a separate violation, but no facility or carrier shall be liable to a penalty greater than $25,000 for each occurrence.

     (2)   A person or entity that receives data under the terms and conditions of this act and intentionally or knowingly uses, sells, or transfers the data for commercial advantage, pecuniary gain, personal gain, or malicious harm, in violation of rules which the commissioner shall adopt to specify such activity, shall be liable to a penalty of not more than $500,000 for each violation.

     (3)   A person or entity not covered by paragraphs (1) or (2) of this subsection that violates the requirements of this act shall be liable to a penalty of not more than $100 for each violation.  Every day upon which a violation occurs shall be considered a separate violation, but no person or entity shall be liable to a penalty greater than $2,500 for each occurrence.

     b.    Upon a finding that a person or entity has failed to comply with the requirements of this act, including the payment of a penalty as determined under subsection a. of this section, the commissioner may:

     (1)   in the case of a carrier, initiate such action as the commissioner determines appropriate;

     (2)   in the case of a health care facility, refer the matter to the Commissioner of Health for such action as the Commissioner of Health determines appropriate; or

     (3)   in the case of a health care professional, refer the matter to the appropriate professional and occupational licensing board within the Division of Consumer Affairs in the Department of Law and Public Safety for such action as that board determines appropriate.

 

     12.  No later than one year after the effective date of this act, the commissioner, by regulation and with the advice of the board, shall expand the required reporting of health care data pursuant to this act, as permitted by federal law and to the extent determined practicable by the commissioner in consultation with the board, to include other third party payers besides those otherwise subject to the provisions of this act, including, but not limited to, multiple employer welfare arrangements or other health benefits plan providers, or their agents, contractors, or administrators, including, but not limited to, pharmacy benefits managers and third party administrators for self-insured benefits plans.

 

     13.  Notwithstanding any law, rule, or regulation to the contrary:

     a.     With respect to a carrier which offers a managed care plan that provides for both in-network and out-of-network benefits, in the event that a covered person receives applicable, medically necessary out-of-network services as defined pursuant to section 3 of this act, the carrier shall ensure that the covered person incurs no greater out-of-pocket costs than the covered person would have incurred with an in-network health care provider for covered services.

     b.    Any benefits that the covered person receives for applicable, medically necessary out-of-network services as provided in subsection a. of this section shall be assigned to the out-of-network health care provider if the covered person agrees in writing to that assignment. The carrier shall provide the out-of-network provider with a written explanation of benefits that specifies the proposed reimbursement and the applicable deductible, copayment, or coinsurance amounts owed by the covered person. The carrier shall pay any reimbursement directly to the out-of-network provider.  The out-of-network provider shall not bill the covered person, except for applicable deductible, copayment, or coinsurance amounts that would apply if the covered person utilized an in-network health care provider for covered services. If a covered person specifically rejects, in writing, the assignment of benefits under this section to the out-of-network provider, then the out-of-network provider may bill the covered person for the services rendered.

     c.     For benefits assigned under subsection b. of this section, the out-of-network health care provider may bill the carrier for the services rendered.  The carrier may pay the billed amount or attempt to negotiate reimbursement with the out-of-network health care provider.

     d.    (1)  The commissioner, upon review of health care data submitted to the New Jersey All-Payer Claims Database and subject to the approval of the New Jersey All-Payer Claims Database Advisory Board, shall establish a reasonable and clearly defined payment range for any amount billed by an out-of-network health care provider and reimbursed by a carrier for applicable, medically necessary out-of-network services. The payment range shall indicate a minimum and maximum allowable payment for any applicable service, as identified by a uniform procedure code, that is rendered by a similarly licensed provider in the same geographic area, as defined by the federal Centers for Medicare & Medicaid Services.  Any payment amount billed by an out-of-network health care provider and reimbursed by a carrier for an applicable, medically necessary out-of-network service shall be within the reasonable and clearly defined payment range established pursuant to this subsection.

     (2)   The commissioner shall establish and publish the reasonable and clearly defined payment range, pursuant to this subsection and subject to the approval of the New Jersey All-Payer Claims Database Advisory Board, no later than the first day of the nineteenth month next following the date upon which reporting entities commenced reporting health care data to the New Jersey All-Payer Claims Database pursuant to section 6 of P.L. , c. (C. ) (pending before the Legislature as this bill).

     (3)   The provisions of this subsection shall apply to any health care services that are provided on or after the first day of the twenty-fifth month next following the date upon which reporting entities commenced reporting health care data to the New Jersey All-Payer Claims Database pursuant to section 6 of P.L. , c. (C. ) (pending before the Legislature as this bill).

     (4)   An affirmative vote of eight members of the New Jersey All-Payer Claims Database Advisory Board shall be required to approve the establishment of the reasonable and clearly defined payment range by the commissioner pursuant to this subsection.

     e.     If attempts to negotiate reimbursement for services provided by an out-of-network health care provider do not result in a resolution of the payment dispute within 14 days after the carrier is billed for the services by the out-of-network health care provider, the carrier or out-of-network health care provider may initiate binding arbitration to determine payment for services provided on a per bill basis.  The binding arbitration shall adhere to the following requirements:

     (1)   The party requesting arbitration shall notify the other party that arbitration has been initiated and state its final offer before arbitration. In response to this notice, the nonrequesting party shall inform the requesting party of its final offer before the arbitration occurs;

     (2)   Arbitration shall be initiated by filing a request with the department;

     (3)   The department shall publish a list of approved arbitrators or entities that shall provide binding arbitration. The arbitrators shall be American Arbitration Association or American Health Lawyers Association trained arbitrators;

     (4)   Both parties shall agree on an arbitrator from the list of arbitrators published by the department, except that if an agreement cannot be reached, a list of five arbitrators shall be provided by the department. From the list of five arbitrators, the carrier may veto two arbitrators and the provider may veto two arbitrators. The remaining arbitrator shall be the chosen arbitrator; and

     (5)   The arbitration shall consist of a review of the written submissions by both parties. Binding arbitration shall provide for a written decision within 30 days after the request is filed with the department. Both parties shall be bound by the arbitrator’s decision. The arbitrator’s expenses and fees, together with other expenses, not including attorney’s fees, incurred in the conduct of the arbitration, shall be paid as provided in the decision.

     f.     The interest charges for overdue payments, pursuant to P.L.1999, c.154 (C.17B:30-23 et al.), shall not apply during the pendency of a decision under subsection e. of this section and any interest required to be paid a provider under P.L.1999, c.154 shall not accrue until after 30 days following an arbitrator’s decision as provided in subsection e. of this section, but in no circumstances longer than 150 days from the date that the out-of-network provider billed the carrier for services rendered.

     g.    The provisions of this section shall apply only if the covered person complies with the preauthorization or review requirements of the health benefits plan regarding the determination of medical necessity to access in-network inpatient or outpatient benefits, as set forth in writing pursuant to sections 4 and 5 of P.L.1997, c.192 (C.26:2S-4 and C.26:2S-5).

     h.    This section shall not apply to a covered person who willfully chooses to access an out-of-network health care provider for health care services available through the carrier’s network of participating physicians and providers. In these circumstances, the contractual requirements for out-of-network health care provider reimbursements shall apply.

     i.     On or before January 31 of each calendar year, the commissioner shall make publicly available, on the department website, a list of all arbitration decisions rendered pursuant to this section between January 1 and December 31 of the previous calendar year.  For each arbitration decision, the list shall include, but not be limited to: an indication of whether the decision was in favor of the carrier or the out-of-network health care provider; the arbitration award amount; and the category and practice specialty of each out-of-network health care provider involved in an arbitration decision, as applicable.  The list of arbitration decisions shall not include any information specifically identifying the provider, carrier, or covered person involved in each arbitration decision.

     j.     This section shall apply to any health care services that are provided on or after the effective date of this act, except as otherwise provided in subsection d. of this section.

 

     14.  The Commissioner of Banking and Insurance shall adopt rules and regulations, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), in order to effectuate the purposes of this act.

 

     15.  This act shall take effect on the first day of the seventh month next following the date of enactment.  The Commissioner of Banking and Insurance may take such anticipatory administrative action in advance thereof as shall be necessary for the implementation of this act.

STATEMENT

 

     This bill, which is designated as the “New Jersey All-Payer Claims Database Act,” establishes a New Jersey All-Payer Claims Database to process, analyze, and report health care data collected from health care facilities, health care professionals, and various health benefits payers, including health insurance carriers, the State Health Benefits Program, the School Employees’ Health Benefits Program, and the State Medicaid and NJ FamilyCare programs. The bill also establishes certain requirements regarding the reimbursement of out-of-network health care providers by insurance carriers offering managed care plans (carriers) for health care services rendered within in-network health care facilities.

     The bill establishes the New Jersey All-Payer Claims Database (the database) within the Department of Banking and Insurance in order to improve the transparency of health care costs, identify trends to assist in improving efficiencies within the health care system, and provide unbiased information to help inform decisions and negotiations between health care consumers, providers, and insurance carriers.

     Under the bill, the Commissioner of Banking and Insurance (the commissioner) would be required to: establish a New Jersey All-Payer Claims Database Advisory Board (the board) to provide input into the development of the database and continuing oversight of its operations; and appoint an executive director to supervise the general management of the database.  The bill requires reporting entities to submit various health care data at least annually, upon certification by the commissioner that the database is sufficiently operational to receive data. 

     The bill defines health care data to include data relating to the provision, financing, and administration of health care, including, but not limited to, data regarding: medical, pharmacy, and dental insurance claims; eligibility and enrollment; health care utilization; health care safety and quality; health outcomes; and costs. The bill specifies data to be collected from reporting entities and authorizes the commissioner, with advice from the board, to further specify the form, medium, content, and frequency of collection. Under the bill, the commissioner is required to produce, and to make publicly available, such reports utilizing data contained within the database as the commissioner and the board determine to be in furtherance of the purposes of the bill.  The bill also requires the commissioner to submit annual reports to the Governor and Legislature analyzing health care cost trends across the State.

     The bill authorizes the commissioner to impose surcharges and assessments on health benefits plans and health care facilities and user fees as funding mechanisms for the database and establishes the “New Jersey All-Payer Claims Database Trust Fund” as a repository for monies collected through those funding mechanisms.  The bill also authorizes the commissioner to establish penalties for violations of its provisions.

     In addition, the bill requires the commissioner, subject to the approval of the board, to establish a reasonable and clearly defined payment range limiting the amount charged by out-of-network health care providers, and reimbursed by carriers, for certain medically necessary services rendered within in-network health care facilities.  This provision applies to health care services rendered on or after the first day of the twenty-fifth month following the commencement of data submissions to the database.  The bill requires carriers to ensure that plan beneficiaries who receive health care services from an out-of-network health care provider within an in-network health care facility incur no greater out-of-pocket costs than they would have incurred with an in-network health care provider.  The bill does not apply to persons who do not comply with the preauthorization or medical necessity review requirements of the managed care plan or persons who willfully choose out-of-network health care providers for health care services available through the carrier’s network of participating physicians and providers.

     The bill establishes an arbitration process for resolving payment disputes. Under the bill, the carrier may pay the billed amount received from the out-of-network provider or attempt to negotiate reimbursement with the provider.  If attempts to negotiate reimbursement for services provided by the out-of-network health care provider do not result in a resolution of the payment dispute within 14 days after the carrier is billed for the services by the health care provider, the carrier or health care provider may initiate binding arbitration to determine payment for services provided on a per bill basis. The bill sets forth certain procedures and requirements for this binding arbitration process.