[First Reprint]

ASSEMBLY, No. 1481

STATE OF NEW JERSEY

INTRODUCED FEBRUARY 5, 1996

By Assemblymen KAVANAUGH, FELICE, Assemblywomen Vandervalk and Murphy

An Act requiring health insurers ¹and certain health care benefits claims processors¹ to receive and transmit ¹[medical and]¹ health care claim information electronically ¹and supplementing various parts of statutory law¹.

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

    1. Within 90 days of the promulgation of demonstration standards and a timetable for implementation by the Commissioner of ¹Banking and¹ Insurance pursuant to section 7 of this act, a hospital service corporation ¹, or a subsidiary that processes health care benefits claims as a third party administrator,¹ shall demonstrate to the satisfaction of the commissioner that it will adopt and implement the demonstration standards, according to the corresponding timetable, to receive, transmit and store ¹[medical and]¹ health care claim information electronically, as a condition of its continued authorization to transact business in this State.

    The commissioner may, in ¹[his] the commissioner’s¹ discretion, grant extensions or waivers of the implementation requirement when it has been demonstrated to ¹[his] the commissioner’s¹ satisfaction that compliance with the timetable for implementation will result in an undue hardship to a hospital service corporation ¹, its subsidiary¹ or its covered individuals.

    2. Within 90 days of the promulgation of demonstration standards and a timetable for implementation by the Commissioner of ¹Banking and¹ Insurance pursuant to section 7 of this act, a medical service corporation ¹ , or a subsidiary that processes health care benefits claims as a third party administrator,¹ shall demonstrate to the satisfaction of the commissioner that it will adopt and implement the demonstration standards, according to the corresponding timetable, to receive, transmit and store ¹[medical and]¹ health care claim information electronically, as a condition of its continued authorization to transact business in this State.

    The commissioner may, in ¹[his] the commissioner’s¹ discretion, grant extensions or waivers of the implementation requirement when it has been demonstrated to ¹[his] the commissioner’s¹ satisfaction that compliance with the timetable for implementation will result in an undue hardship to a medical service corporation ¹, its subsidiary¹ or its covered individuals.

    3. Within 90 days of the promulgation of demonstration standards and a timetable for implementation by the Commissioner of ¹Banking and¹ Insurance pursuant to section 7 of this act, a health service corporation ¹ , or a subsidiary that processes health care benefits claims as a third party administrator,¹ shall demonstrate to the satisfaction of the commissioner that it will adopt and implement the demonstration standards, according to the corresponding timetable, to receive, transmit and store ¹[medical and]¹ health care claim information electronically, as a condition of its continued authorization to transact business in this State.

    The commissioner may, in ¹[his] the commissioner’s¹ discretion, grant extensions or waivers of the implementation requirement when it has been demonstrated to ¹[his] the commissioner’s¹ satisfaction that compliance with the timetable for implementation will result in an undue hardship to a health service corporation ¹, its subsidiary¹ or its covered individuals.

    4. Within 90 days of the promulgation of demonstration standards and a timetable for implementation by the Commissioner of ¹Banking and¹ Insurance pursuant to section 7 of this act, a health insurer issuing individual health insurance policies ¹, or a subsidiary that processes health care benefits claims as a third party administrator,¹ shall demonstrate to the satisfaction of the commissioner that it will adopt and implement the demonstration standards, according to the corresponding timetable, to receive, transmit and store ¹[medical and]¹ health care claim information electronically, as a condition of its continued authorization to transact business in this State.

    The commissioner may, in ¹[his] the commissioner’s¹ discretion, grant extensions or waivers of the implementation requirement when it has been demonstrated to ¹[his] the commissioner’s¹ satisfaction that compliance with the timetable for implementation will result in an undue hardship to a health insurer ¹, its subsidiary¹ or its covered individuals.

    5. Within 90 days of the promulgation of demonstration standards and a timetable for implementation by the Commissioner of ¹Banking and¹ Insurance pursuant to section 7 of this act, a health insurer issuing group health insurance policies ¹ , or a subsidiary that processes health care benefits claims as a third party administrator,¹ shall demonstrate to the satisfaction of the commissioner that it will adopt and implement the demonstration standards, according to the corresponding timetable, to receive, transmit and store ¹[medical and]¹ health care claim information electronically, as a condition of its continued authorization to transact business in this State.

    The commissioner may, in ¹[his] the commissioner’s¹ discretion, grant extensions or waivers of the implementation requirement when it has been demonstrated to ¹[his] the commissioner’s¹ satisfaction that compliance with the timetable for implementation will result in an undue hardship to a health insurer ¹, its subsidiary¹ or its covered individuals.

    6. Within 90 days of the promulgation of demonstration standards and a timetable for implementation by the Commissioner of ¹Banking and¹ Insurance pursuant to section 7 of this act, a health maintenance organization ¹, or a subsidiary that processes health care benefits claims as a third party administrator,¹ shall demonstrate to the satisfaction of the commissioner that it will adopt and implement the demonstration standards, according to the corresponding timetable, to receive, transmit and store ¹[medical and]¹ health care claim information electronically as a condition of its continued authorization to operate in this State.

    The commissioner may, in ¹[his] the commissioner’s¹ discretion, grant extensions or waivers of the implementation requirement when it has been demonstrated to ¹[his] the commissioner’s¹ satisfaction that compliance with the timetable for implementation will result in an undue hardship to a health maintenance organization ¹, its subsidiary¹ or its enrollees.

    7. a. The Commissioner of ¹Banking and¹ Insurance, in consultation with the Healthcare Information Electronic Data Interchange Policy ¹Advisory¹ Council established pursuant to P.L.    , c. (C. )(now before the Legislature as Assembly, No. 1476 and Senate, No. 50 of 1996), shall establish demonstration standards, along with a timetable for implementation, for the electronic receipt, transmission and storage of ¹[medical and]¹ health care claim information by hospital service, medical service and health service corporations, health insurers ¹[and],¹ health maintenance organizations, ¹dental service corporations and dental plan organizations,¹ respectively ¹, or subsidiaries of such corporations, insurers or organizations that process health care benefits claims as third party administrators¹. The commissioner may, in ¹[his] the commissioner’s¹ discretion, grant extensions or waivers of the implementation requirement when it has been demonstrated to ¹[his] the commissioner’s¹ satisfaction that compliance with the timetable for implementation will result in an undue hardship to a hospital service, medical service, or health service corporation, health insurer ¹, dental service corporation, dental plan organization,¹ or health maintenance organization,¹ its subsidiary,¹ or its covered individuals or enrollees.

    b. In establishing these standards, the commissioner shall:

    (1) Encourage the use of ¹[the] an¹ electronic data interchange (EDI) network developed ¹[by] in consultation with¹ the council pursuant to P.L. , c. (C. )(now before the Legislature as Assembly, No. 1476 and Senate, No. 50 of 1996);

    (2) Encourage hospital service, medical service and health service corporations, health insurers ¹[and],¹ health maintenance organizations, ¹dental service corporations and dental plan organizations, or subsidiaries of such corporations, insurers or organizations that process health care benefits claims as third party administrators¹ to issue ¹[magnetic stripe "smart cards," or similar type]¹ patient identification cards or systems ¹, such as magnetic stripe, "smart cards," or other patient identification technology,¹ to covered individuals; and

    (3) Encourage and facilitate the development of privately owned and operated ¹[open] secure¹ networks which are interconnected and available to all participants in the health care services delivery process.

    c. The timetable for implementation promulgated by the commissioner shall provide for extensions and waivers of the implementation requirement pursuant to subsection a. of this section.

    d. The commissioner shall report annually to the policy council, the Legislature and the Governor on progress made in the implementation of these demonstration standards in this State.

    ¹8. Within 90 days of the promulgation of demonstration standards and a timetable for implementation by the Commissioner of Banking and Insurance pursuant to section 7 of this act, a dental plan organization, or a subsidiary that processes health care benefits claims as a third party administrator, shall demonstrate to the satisfaction of the commissioner that it will adopt and implement the demonstration standards, according to the corresponding timetable, to receive, transmit and store health care claim information electronically as a condition of its continued authorization to operate in this State.

    The commissioner may, in the commissioner’s discretion, grant extensions or waivers of the implementation requirement when it has been demonstrated to the commissioner’s satisfaction that compliance with the timetable for implementation will result in an undue hardship to a dental plan organization, its subsidiary or its enrollees.¹

    ¹9. Within 90 days of the promulgation of demonstration standards and a timetable for implementation by the Commissioner of Banking and Insurance pursuant to section 7 of this act, a dental service corporation, or a subsidiary that processes health care benefits claims as a third party administrator, shall demonstrate to the satisfaction of the commissioner that it will adopt and implement the demonstration standards, according to the corresponding timetable, to receive, transmit and store health care claim information electronically as a condition of its continued authorization to operate in this State.

    The commissioner may, in the commissioner’s discretion, grant extensions or waivers of the implementation requirement when it has been demonstrated to the commissioner’s satisfaction that compliance with the timetable for implementation will result in an undue hardship to a dental service corporation, its subsidiary or its subscribers.¹

    ¹[8.] 10.¹ The commissioner shall promulgate regulations pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) to effectuate the provisions of this act.

    ¹[9.] 11.¹ This act shall take effect immediately.

Requires health insurers to process medical and claims information electronically.