SENATE HEALTH COMMITTEE

STATEMENT TO

SENATE COMMITTEE SUBSTITUTE FOR

SENATE, Nos. 603 and 171

STATE OF NEW JERSEY

DATED: MAY 9, 1996

      The Senate Health Committee reports favorably a Senate Committee Substitute for Senate Bill Nos. 603 and 171.

      This substitute requires certain managed care entities regulated by the State, that is, health maintenance organizations and selective contracting arrangements entered into by health insurance carriers, to provide for the continuation of treatment by a physician, under certain circumstances, in the event that the physician is no longer employed by the managed care entity.

      Specifically, the substitute permits an enrollee or covered person who is receiving post-operative follow-up care, oncological treatment, psychiatric treatment or obstetrical care from a physician who is employed by or under contract with the managed care entity when the treatment or care is initiated, to continue to be treated by that physician for a limited period of time should the physician no longer be employed by or under contract with the managed care entity.

      The substitute specifies that an enrollee or covered person in the managed care entity, at the enrollee or covered person's option, may continue treatment with that physician for the duration of the treatment, for a period not to exceed six months in the case of post-operative follow-up care, for a period not to exceed one year in the case of oncological treatment and psychiatric treatment and through the duration of a pregnancy and up to six weeks after delivery in the case of obstetrical care.

      The health care services shall be provided to the same extent as when the physician was employed by or under contract with the managed care entity.

      The substitute also provides that:

♦    reimbursement for the health care services shall be pursuant to the same fee schedule used to reimburse for the services when the physician was employed by or under contract with the managed care entity;

♦    the health maintenance organization, selective contracting arrangement, health benefits plan or health insurance carrier shall not be liable for any inappropriate treatment provided to the enrollee by a physician who is no longer under contract with the managed care entity; and

♦    the provisions of the substitute shall not apply to health care services provided by a physician who is the subject of a disciplinary action by the State Board of Medical Examiners.

      Finally, the substitute extends the provisions of the proposed health maintenance organization regulations concerning the continuation of coverage for medically necessary health care services for up to 120 calendar days (N.J.A.C.8:38-3.5(a)4), to selective contracting arrangements so that both types of managed care entities are subject to the same continuation of treatment requirements.