ASSEMBLY, No. 1097

 

STATE OF NEW JERSEY

 

Introduced Pending Technical Review by Legislative Counsel

 

PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION

 

 

By Assemblymen CORODEMUS and FELICE

 

 

An Act concerning the establishment of usual, customary and reasonable fees for health care providers by certain insurers.

 

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

 

    1. a. For purposes of this section, "health care provider" means a provider of health care services; "health care service" means a service or product sold by a health care provider and includes, but is not limited to, hospital, medical, surgical, dental, vision and pharmaceutical services or products; and "usual, customary and reasonable fee" shall include any fee established by a hospital service corporation for services of any applicable category of health care providers by any methodology.

    b. A hospital service corporation that bases payment for benefits for health care services under its contracts on a usual, customary and reasonable fee charged by the applicable category of health care provider, shall disclose all of the following in accordance with subsection c. of this section:

    (1) The frequency of the determination of the usual, customary and reasonable fee;

    (2) A detailed description of the methodology used to determine usual, customary and reasonable fees;

    (3) The geographic area used to determine usual, customary and reasonable fees;

    (4) If the usual, customary and reasonable fee for a health care service is determined by taking a sample of fees submitted on actual claims from health care providers and then selecting a percentile of those fees, the percentile that is used by the hospital service corporation.

    c. The hospital service corporation shall disclose, upon request, the information described in subsection b. of this section to a subscriber, any covered person or assignee thereof.

 

    2. a. For purposes of this section, "health care provider" means a provider of health care services; "health care service" means a service or product sold by a health care provider and includes, but is not limited to, hospital, medical, surgical, dental, vision and pharmaceutical services or products; and "usual, customary and reasonable fee" shall include any fee established by a medical service corporation for services of any applicable category of health care providers by any methodology.

    b. A medical service corporation that bases payment for benefits for health care services under its contracts on a usual, customary and reasonable fee charged by the applicable category of health care provider, shall disclose all of the following in accordance with subsection c. of this section:

    (1) The frequency of the determination of the usual, customary and reasonable fee;

    (2) A detailed description of the methodology used to determine usual, customary and reasonable fees;

    (3) The geographic area used to determine usual, customary and reasonable fees;

    (4) If the usual, customary and reasonable fee for a health care service is determined by taking a sample of fees submitted on actual claims from health care providers and then selecting a percentile of those fees, the percentile that is used by the medical service corporation.

    c. The medical service corporation shall disclose, upon request, the information described in subsection b. of this section to a subscriber, any covered person or assignee thereof.

 

    3. a. For purposes of this section, "health care service" means a service or product sold by a provider of health care services and includes, but is not limited to, hospital, medical, surgical, dental, vision and pharmaceutical services or products; and "usual, customary and reasonable fee" shall include any fee established by a health service corporation for services of any applicable category of health care providers by any methodology.

    b. A health service corporation that bases payment for benefits for health care services under its contracts on a usual, customary and reasonable fee charged by the applicable category of provider of health care services, shall disclose all of the following in accordance with subsection c. of this section:

    (1) The frequency of the determination of the usual, customary and reasonable fee;

    (2) A detailed description of the methodology used to determine usual, customary and reasonable fees;

    (3) The geographic area used to determine usual, customary and reasonable fees;

    (4) If the usual, customary and reasonable fee for a health care service is determined by taking a sample of fees submitted on actual claims from providers of health care services and then selecting a percentile of those fees, the percentile that is used by the health service corporation.

    c. The health service corporation shall disclose, upon request, the information described in subsection b. of this section to a subscriber, any covered person or assignee thereof.

 

    4. a. For purposes of this section, "health care provider" means a provider of health care services; "health care service" means a service or product sold by a health care provider and includes, but is not limited to, hospital, medical, surgical, dental, vision and pharmaceutical services or products; and "usual, customary and reasonable fee" shall include any fee established by an insurer for services of any applicable category of health care providers by any methodology.

    b. An insurer that is authorized to transact health insurance pursuant to Chapter 26 of Title 17B of the New Jersey Statutes and that bases payment for benefits for health care services under its policies on a usual, customary and reasonable fee charged by the applicable category of health care provider, shall disclose all of the following in accordance with subsection c. of this section:

     (1) The frequency of the determination of the usual, customary and reasonable fee;

    (2) A detailed description of the methodology used to determine usual, customary and reasonable fees;

    (3) The geographic area used to determine usual, customary and reasonable fees;

    (4) If the usual, customary and reasonable fee for a health care service is determined by taking a sample of fees submitted on actual claims from health care providers and then selecting a percentile of those fees, the percentile that is used by the insurer.

    c. The insurer shall disclose, upon request, the information described in subsection b. of this section to a policyholder, any covered person or assignee thereof.

 

    5. a. For purposes of this section, "health care provider" means a provider of health care services; "health care service" means a service or product sold by a health care provider and includes, but is not limited to, hospital, medical, surgical, dental, vision and pharmaceutical services or products; and "usual, customary and reasonable fee" shall include any fee established by an insurer for services of any applicable category of health care providers by any methodology.

    b. An insurer that is authorized to transact health insurance pursuant to Chapter 27 of Title 17B of the New Jersey Statutes and that bases payment for benefits for health care services under its policies on a usual, customary and reasonable fee charged by the applicable category of health care provider, shall disclose all of the following in accordance with subsection c. of this section:

    (1) The frequency of the determination of the usual, customary and reasonable fee;

    (2) A detailed description of the methodology used to determine usual, customary and reasonable fees;

    (3) The geographic area used to determine usual, customary and reasonable fees;

    (4) If the usual, customary and reasonable fee for a health care service is determined by taking a sample of fees submitted on actual claims from health care providers and then selecting a percentile of those fees, the percentile that is used by the insurer.

    c. The insurer shall disclose, upon request, the information described in subsection b. of this section to a policyholder, any covered person or assignee thereof.

 

    6. a. A dental service corporation that bases payment for benefits for dental services under its contracts on a usual, customary and reasonable fee charged by dentists, shall disclose all of the following in accordance with subsection b. of this section:

    (1) The frequency of the determination of the usual, customary and reasonable fee;

    (2) A detailed description of the methodology used to determine usual, customary and reasonable fees;

    (3) The geographic area used to determine usual, customary and reasonable fees;

    (4) If the usual, customary and reasonable fee for dental service is determined by taking a sample of fees submitted on actual claims from dentists and then selecting a percentile of those fees, the percentile that is used by the dental service corporation.

    b. The dental service corporation shall disclose, upon request, the information described in subsection a. of this section to a subscriber, any covered person or assignee thereof.

    c. For purposes of this section, "usual, customary and reasonable fee" shall include any fee established by a dental service corporation for services of any dentist by any methodology.

 

    7. This act shall take effect on the 90th day following enactment.

 

 

STATEMENT

 

    This bill requires health insurers, dental service corporations, and hospital, medical and health service corporations to disclose to policyholders, subscribers and covered persons, or their assignees, upon request, how they establish the usual, customary and reasonable fees they use in reimbursing health care providers for their services. "Health care service" is defined as a service or product sold by a health care provider and includes, but is not limited to, hospital, medical, surgical, dental, vision and pharmaceutical services or products.

    Specifically, the carriers must disclose:

    (1) The frequency of the determination of the usual, customary and reasonable fee;

    (2) A detailed description of the methodology used to determine usual, customary and reasonable fees;

    (3) The geographic area used to determine usual, customary and reasonable fees; and

    (4) If the usual, customary and reasonable fee for a health care service is determined by taking a sample of fees submitted on actual claims from health care providers and then selecting a percentile of those fees, the percentile that is used by the hospital service corporation.

    The bill also provides that "usual, customary and reasonable fee" includes any fee established by a carrier for services of health care providers by any methodology.

 

 

 

Requires health insurers to disclose how they establish usual, customary and reasonable fees for health care providers.