SENATE BUDGET AND APPROPRIATIONS COMMITTEE

STATEMENT TO

[First Reprint]

SENATE, No. 47

with Senate committee amendments

STATE OF NEW JERSEY

DATED: MARCH 7, 1996

      The Senate Budget and Appropriations Committee reports favorably Senate Bill No. 47 (1R) of 1996 with committee amendments.

      Senate Bill No. 47 (1R), as amended, provides for the resolution of billing and payment disputes between insurers and health care providers or covered individuals. It requires hospital, medical and health service corporations, commercial health insurers, dental plan organizations and dental service corporations to adopt and implement, after approval by the Commissioner of Insurance, a procedure that will be used to resolve billing and payment disputes between the provider or covered individuals and the payer. The bill requires direct communication between the provider and the insurer if the dispute is between these two parties and provides that the covered individual will not be required to take any action to rectify the problem, other than verify that the services or treatment were received.

      The bill also requires that the procedure include an appeal process whereby the insurer, the provider or the covered individual may request an independent review of the initial resolution of the dispute by an arbitrator or independent review organization, agreed upon by the parties to the appeal. The decision of the arbitrator or review organization, as appropriate, will be binding on the provider and carrier. This appeal process will only apply to health benefits contracts issued, delivered, executed or renewed after the approval of the dispute resolution.

      This bill is part of a legislative package designed to effectuate the recommendations of 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.

COMMITTEE AMENDMENTS

      The committee amended the bill to remove the requirement that health maintenance organizations adopt billing and payment dispute resolution procedures. The Department of Health has developed, although not yet promulgated, extensive new regulations concerning health maintenance organizations and these regulations include detailed dispute resolution procedures. Therefore, this providion would have been in conflict with those regulations, once promulgated.

      In addition, the amendment changes the effective date to make the bill effective immediately. There is no need for the 90-day delay since the Commissioner of Insurance may wish to begin promulgation of regulations needed for the bill's implementation immediately.

      Finally, the amendments increase from 90 to 120 days the period of time the Commissioner of Insurance has to review dispute resolution procedures; require the dispute resolution procedures to include disputes with covered individuals; require the decision of an arbitrator or independent review organization to be binding only for contracts issued, delivered, executed, or renewed after the approval of dispute resolution procedures by the commissioner; and require a health care insurer to notify a provider or covered individual of the appeal process established in compliance with the bill in the event of a dispute.

FISCAL IMPACT

      This bill has not been certified as requiring a fiscal note because it will not have an impact on State or local government revenues or expenditures.