SENATE, No. 45

STATE OF NEW JERSEY

INTRODUCED JANUARY 18, 1996

By Senators LaROSSA and LITTELL

An Act concerning payment transactions by health care facilities and providers and supplementing Title 26 of the Revised Statutes.

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

    1. As used in this act:

    "Commissioner" means the Commissioner of Health.

    "Electronic data interchange technology" means computer equipment or software which permits the electronic transmission of a business document in a standard format.

    "Fund" means the Electronic Data Interchange Technology Development Fund established pursuant to this act.

    "Health care facility" means a health care facility licensed by the Department of Health pursuant to P.L.1971, c.136 (C.26:2H-1 et seq.).

    “Health care provider” means a health care provider subject to regulation by a professional board pursuant to the provisions of Title 45 of the Revised Statutes, but excluding pharmacists.

    2. There is established the Electronic Data Interchange Technology Development Fund in the Department of Health.

    a. The fund shall be comprised of revenues from the automated transition incentive fee established pursuant to section 4 of this act and from such other sources as the Legislature may determine. Interest earned on the monies in the fund shall be credited to the fund.

    Except as provided in subsection b. of this section, the fund shall be a nonlapsing fund dedicated for use by the State to provide low-interest loans to, and to support the issuance of bonds by, health care facilities and health care providers for the purpose of acquiring electronic data interchange technology to store, retrieve and transmit health care information.

    b. Of the monies in the fund, 2.5% shall annually be allocated to the Health Information Electronic Data Interchange Policy Council established pursuant to P.L. , c. (C. )(pending before the Legislature as Senate Bill No. or Assembly Bill No. of 1996) to fund its administrative costs, out of which amount $250,000 shall be allocated to the New Jersey Institute of Technology and $250,000 shall be allocated to Thomas Edison State College for consulting services provided to the council; and 2.5% shall annually be used by the Department of Health for costs related to its survey and annual report on Statewide health care expenditures pursuant to P.L. , c. (C. )(pending before the Legislature as Senate Bill No. or Assembly Bill No. of 1996).

    c. The fund shall be administered by a person appointed by the commissioner or an agency designated by the commissioner. The administrator of the fund is responsible for overseeing and coordinating the collection and disbursement of fund monies. The administrator is responsible for promptly informing the commissioner if monies are not or are not reasonably expected to be collected or disbursed.

    3. Bonds issued pursuant to this act shall not be deemed to constitute a debt or liability of the State or of any political subdivision thereof, nor a pledge of the faith and credit of the State or of any such political subdivision, but shall be payable solely from the funds provided pursuant to this act. The bonds shall contain on the face thereof a statement to the effect that neither the State of New Jersey nor any political subdivision thereof shall be obligated to pay the same or the interest thereon and that neither the faith and credit nor the taxing power of the State of New Jersey or of any political subdivision thereof is pledged to the payment of the principal of or the interest on the bonds. The issuance of bonds pursuant to this act shall not directly or indirectly or contingently obligate the State or any political subdivision thereof to levy or to pledge any form of taxation whatever therefor.

    4. a. Effective July 1, 1996, the commissioner shall assess each health care facility and health care provider an automated transition incentive fee of $0.50 on every paper-based payment transaction and $0.10 on every electronically automated payment transaction, the proceeds from which shall be deposited in the fund.

    b. The provisions of subsection a. of this section are subject to federal approval with respect to payment transactions in connection with patients covered by the federal Medicare program established pursuant to the federal Social Security Act, Pub.L.89-97 (42 U.S.C. §1395 et seq.) and the Medicaid program established pursuant to P.L.1968, c.413 (C.30:4D-1 et seq.).

    5. The commissioner shall establish the criteria for determining eligibility for financial assistance provided to a health care facility or a health care provider from the fund and the terms and conditions of that assistance, for which purpose the commissioner shall consult, at a minimum, with the following organizations: the New Jersey Hospital Association, the Medical Society of New Jersey, the Hospital Alliance of New Jersey, the New Jersey Association of Health Care Facilities, the New Jersey Association of Non-Profit Homes for the Aging, and the Home Health Agency Assembly of New Jersey, Inc.

    6. The commissioner shall report annually to the Governor and the Legislature on the activities of the fund and the results of the fund in meeting its objectives.

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

    8. This act shall take effect immediately.

STATEMENT

    This bill establishes the Electronic Data Interchange Technology Development Fund in the Department of Health to provide low-interest loans to, and to support the issuance of bonds by, health care facilities and providers for the purpose of acquiring electronic data interchange technology to store, retrieve and transmit health care information. The fund shall be comprised of revenues from an automated transition incentive fee to be assessed against health care facilities and providers of $0.50 on every paper-based payment transaction and $0.10 on every electronically automated payment transaction, which takes effect July 1, 1996 (subject to federal approval for Medicare and Medicaid patient-related payment transactions), and from such other sources as the Legislature may determine, plus interest earned on the monies in the fund.

    The bill exempts pharmacists from the automated transition incentive fee because they have largely made the transition to automated transactions already. According to the Healthcare Information Networks and Technologies (HINT) report to the Legislature under the joint auspices of Thomas Edison State College and the New Jersey Institute of Technology, 89% of pharmacies surveyed by the HINT project are computerized (the highest percentage among all components of the health care industry), compared with only 38% of physicians and 37% of payers.

    This bill is part of a legislative package designed to effectuate the recommendations of the HINT report. The bill is intended to provide a financial incentive for health care facilities and providers to purchase computer equipment and software that will permit electronic claims processing and other electronic data exchanges, which have the potential to significantly reduce health care administrative costs in this State.

Imposes fee on payment transactions by health care facilities and providers and establishes “Electronic Data Interchange Technology Development Fund.”