ASSEMBLY, No. 964

 

STATE OF NEW JERSEY

 

Introduced Pending Technical Review by Legislative Counsel

 

PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION

 

 

By Assemblymen FELICE and CORODEMUS

 

 

An Act concerning prompt payment of health insurance claims and amending P.L.1991, c.187.

 

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

 

    1. Section 78 of P.L.1991, c.187 (C.17B:26-12.1) is amended to read as follows:

    78. a. A health insurer shall reimburse all claims or any portion of any claim from an insured or an insured's assignee, for payment under a health insurance policy, within [60] 30 days after receipt of the claim by the health insurer. If a claim or a portion of a claim is contested by the health insurer, the insured or the insured's assignee shall be notified in writing within [45] 20 days after receipt of the claim by the health insurer, that the claim is contested or denied; except that, the uncontested portion of the claim shall be paid within [60] 30 days after receipt of the claim by the health insurer. The notice that a claim is contested shall identify the contested portion of the claim and the reasons for contesting the claim.

    A health insurer, upon receipt of the additional information requested from the insured or the insured's assignee shall pay or deny the contested claim or portion of the contested claim, within [90] 60 days.

    Payment shall be treated as being made on the date a draft or other valid instrument which is equivalent to payment was placed in the United States mail in a properly addressed, postpaid envelope or, if not so posted, on the date of delivery.

    b. An overdue payment shall bear simple interest at the rate of 10% per year. For the purpose of determining interest charges in the event the insured or his assignee prevails in a contested claim, a payment shall be considered overdue at the expiration of the 30-day period provided in subsection a. of this section or, if the insured or his assignee was required to provide additional information to the insurer, within 10 business days following receipt by the insurer of all the information requested by it, whichever date is later.

    c. For the purposes of this section, "health insurer" means an insurer authorized to provide health insurance on an individual basis pursuant to chapter 26 of Title 17B of the New Jersey Statutes.

    d. The Department of Insurance shall adopt rules and regulations pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) to carry out the provisions of this section.

(cf: P.L.1991, c.187, s.78)

 

    2. Section 79 of P.L.1991, c.187 (C.17B:27-44.1) is amended to read as follows:

    79. a. A health insurer shall reimburse all claims or any portion of any claim from an insured or an insured's assignee, for payment under a health insurance policy, within [60] 30 days after receipt of the claim by the health insurer. If a claim or a portion of a claim is contested by the health insurer, the insured or the insured's assignee shall be notified in writing within [45] 20 days after receipt of the claim by the health insurer, that the claim is contested or denied; except that, the uncontested portion of the claim shall be paid within [60] 30 days after receipt of the claim by the health insurer. The notice that a claim is contested shall identify the contested portion of the claim and the reasons for contesting the claim.

    A health insurer, upon receipt of the additional information requested from the insured or the insured's assignee shall pay or deny the contested claim or portion of the contested claim, within [90] 60 days.

    Payment shall be treated as being made on the date a draft or other valid instrument which is equivalent to payment was placed in the United States mail in a properly addressed, postpaid envelope or, if not so posted, on the date of delivery.

    b. An overdue payment shall bear simple interest at the rate of 10% per year. For the purpose of determining interest charges in the event the insured or his assignee prevails in a contested claim, a payment shall be considered overdue at the expiration of the 30-day period provided in subsection a. of this section or, if the insured or his assignee was required to provide additional information to the insurer, within 10 business days following receipt by the insurer of all the information requested by it, whichever date is later.

    c. For the purposes of this section, "health insurer" means an insurer authorized to provide health insurance on a group basis pursuant to chapter 27 of Title 17B of the New Jersey Statutes.

    d. The Department of Insurance shall adopt rules and regulations pursuant to the "Administrative Procedure Act," P.L.1968, c.410


(C.52:14B-1 et seq.) to carry out the provisions of this section.

(cf: P.L.1991, c.187, s.79)

 

    3. Section 80 of P.L.1991, c.187 (C.26:2J-5.1) is amended to read as follows:

    80. a. A health maintenance organization shall reimburse all claims or any portion of any claim for hospital services from an enrollee or an enrollee's assignee, for payment under health maintenance organization coverage, within [60] 30 days after receipt of the claim by the health maintenance organization. If a claim or a portion of a claim is contested by the health maintenance organization, the enrollee or the enrollee's assignee shall be notified in writing within [45] 20 days after receipt of the claim by the health maintenance organization, that the claim is contested or denied; except that, the uncontested portion of the claim shall be paid within [60] 30 days after receipt of the claim by the health maintenance organization. The notice that a claim is contested shall identify the contested portion of the claim and the reasons for contesting the claim.

    A health maintenance organization, upon receipt of the additional information requested from the enrollee or the enrollee's assignee shall pay or deny the contested claim or portion of the contested claim, within [90] 60 days.

    Payment shall be treated as being made on the date a draft or other valid instrument which is equivalent to payment was placed in the United States mail in a properly addressed, postpaid envelope or, if not so posted, on the date of delivery.

    b. An overdue payment shall bear simple interest at the rate of 10% per year. For the purpose of determining interest charges in the event the enrollee or his assignee prevails in a contested claim, a payment shall be considered overdue at the expiration of the 30-day period provided in subsection a. of this section or, if the enrollee or his assignee was required to provide additional information to the health maintenance organization, within 10 business days following receipt by the health maintenance organization of all the information requested by it, whichever date is later.

    c. For the purposes of this section, "health maintenance organization" means a health maintenance organization authorized pursuant to the provisions of P.L.1973, c.337 (C.26:2J-1 et seq.).

    d. The Department of Health shall adopt rules and regulations pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) to carry out the provisions of this section.

(cf: P.L.1991, c.187, s.80)

 

    4. This act shall take effect immediately.


STATEMENT

 

    This bill amends the "prompt payment" requirements of the "Health Care Cost Reduction Act," P.L.1991, c.187 (C.26:2H-18.24 et al.) to reduce the amount of time in which a claim must be paid by a health insurer or health maintenance organization from 60 days to 30 days. Also, in order to limit the time during which a claim is contested and remains unpaid, the bill provides that a contested claim which is subsequently paid in whole or part shall be considered an overdue payment and shall bear simple interest at the rate of 10% per year calculated from the expiration of the 30-day period or, if the insured or his assignee was required to provide additional information to the insurer or health maintenance organization, within 10 business days following receipt by the insurer or health maintenance organization of all the information requested by it, whichever date is later.

 

 

 

Revises prompt payment provisions in "Health Care Cost Reduction Act" to require payment in 30 days.