SENATE, No. 1714
STATE OF NEW JERSEY
INTRODUCED DECEMBER 16, 1996
By Senator LaROSSA
An Act concerning automobile insurance and supplementing P.L.1972, c.70 (C.39:6A-1 et seq.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. An insurer may offer, as an option on a Statewide basis, coverage of medical expense benefits pursuant to subsection a. of section 4 of P.L.1972, c.70 (C.39:6A-4) and section 10 of P.L.1972, c.70 (C.39:6A-10) through a managed care arrangement under such terms and conditions as are approved by the Commissioner of Banking and Insurance. An insurer may utilize more than one managed care arrangement so that the service area of an insurer includes the entire State.
b. The Commissioner of Banking and Insurance shall approve the offering of medical expense benefits coverage through a managed care arrangement by an insurer if the insurer: (1) demonstrates that the managed care arrangement has a sufficient number of health care providers in any proposed service area to ensure the availability and accessibility of medical and other covered health care services; (2) submits written procedures for dispute and grievance resolution to the Commissioner of Banking and Insurance for the commissioner's review and approval; and (3) complies with such other requirements as the Commissioner of Banking and Insurance, in consultation with the Commissioner of Health, may deem appropriate to reduce costs, assure access to medical services comparable to those provided in a non-managed care arrangement, and minimize improper utilization of medical and other covered health care services, without sacrificing the quality of such services to persons injured in automobile accidents.
c. As approved by the Commissioner of Banking and Insurance, an insurer shall offer a managed care arrangement at an appropriately reduced premium and with or without waiver of all or part of the copayment, deductible, or both which are required by the provisions of section 4 of P.L.1972, c.70 (39:6A-4) and section 13 of P.L.1983, c.362 (C.39:6A-4.3). The rates for personal injury protection coverage in which medical expense benefits coverage is made available through a managed care arrangement shall be determined by the loss experience of the rate filer for personal injury protection coverage in which medical expense benefits coverage is made available through a managed care arrangement.
d. An insurer offering a managed care arrangement option shall provide a written notice to its insureds which shall: (1) describe the significant aspects of the managed care arrangement option; (2) explain the differences between any managed care arrangement option and non-managed care option offered by the insurer; (3) identify the range of premium rate credit or dollar savings or both; and (4) include such other information as the Commissioner of Banking and Insurance may require.
e. Election of a managed care arrangement option shall be in writing in a form prescribed by the Commissioner of Banking and Insurance and shall be signed by the named insured.
f. A managed care arrangement elected by the named insured shall continue in force until the insurer or its authorized representative receives a written request, signed by the named insured, under procedures established by the Commissioner of Banking and Insurance, to change the arrangement by which medical expense benefits are provided from a managed care arrangement to a non-managed care arrangement. If an accident causing bodily injury takes place while a managed care arrangement is in effect, the injured person shall continue to receive medical expense benefits through the managed care arrangement with respect to that injury.
For purposes of this act "managed care arrangement" means an arrangement by which medical and other covered health care services are delivered through a system designed to enhance quality and efficiency, which system may emphasize or require the utilization of specified health care providers or programs and may require pre-authorization of services. Managed care arrangements shall include, but not be limited to, health maintenance organizations, preferred provider organizations and such other arrangements as may be approved by the Commissioner of Banking and Insurance.
2. The Commissioner of Banking and Insurance, in consultation with the Commissioner of Health, shall promulgate rules and regulations pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) as may be necessary to effectuate the purposes of this act.
3. This act shall take effect immediately.
STATEMENT
This bill permits insurers providing automobile insurance to offer personal injury protection (PIP) medical expense benefits through a managed care arrangement, as an option on a Statewide basis, if the managed care arrangement has been approved by the Commissioner of Banking and Insurance.
Under the provisions of the bill, the Commissioner of Banking and Insurance shall approve a managed care arrangement if the insurer offering this option: (1) demonstrates to the Commissioner of Banking and Insurance that the managed care arrangement has a sufficient number of health care providers in any proposed service area to ensure the availability and accessibility of medical and other covered health care services; (2) submits to the Commissioner of Banking and Insurance, for review and approval, written procedures for dispute and grievance resolution; and (3) complies with such other requirements as the Commissioner of Banking and Insurance, in consultation with the Commissioner of Health, may deem appropriate.
An insurer must offer a managed care arrangement option at an appropriately reduced premium and with or without waiver of all or part of the currently required copayment, deductible or both. The premium for this coverage option shall be based on the loss experience of the rate filer for that coverage option.
The bill also requires such an insurer to send a written notice to its insureds which: (1) describes the significant aspects of the managed care arrangement option being offered; (2) xplains the differences between any managed care arrangement option and non-managed care option offered; (3) identifies the range of premium rate credit or dollar savings or both that would be realized by an insured choosing a managed care arrangement option; and (4) includes any other information that may be required by the Commissioner of Banking and Insurance.
The bill requires an insured choosing medical expense benefits coverage through a managed care arrangement to do so in writing. Finally, the bill provides that a managed care arrangement shall remain in force until the insurer or its authorized representative receives a written request, signed by the named insured, to change the arrangement by which medical expense benefits coverage is provided from a managed care arrangement to a non-managed care arrangement.
Managed care arrangements include health maintenance organizations, preferred provider organizations and other arrangements as approved by the commissioner.
Permits auto insurers to offer PIP medical expense benefits through optional managed care arrangements.