SENATE, No. 1991
STATE OF NEW JERSEY
INTRODUCED APRIL 17, 1997
By Senator RICE
An Act concerning managed care 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:
"Carrier" means an insurance company, health service corporation, hospital service corporation, medical service corporation or health maintenance organization authorized to issue health benefits plans in this State.
"Covered person" means a person on whose behalf a carrier offering the plan is obligated to pay benefits or provide services pursuant to the health benefits plan.
"Covered service" means a health care service provided to a covered person under a health benefits plan for which the carrier is obligated to pay benefits or provide services.
"Department" means the Department of Health and Senior Services.
"Health benefits plan" means a benefits plan which pays or provides hospital and medical expense benefits for covered services, and is delivered or issued for delivery in this State by or through a carrier. Health benefits plan includes, but is not limited to, Medicare supplement coverage and risk contracts to the extent not otherwise prohibited by federal law. For the purposes of this act, health benefits plan shall not include the following plans, policies or contracts: accident only, credit, disability, long-term care, CHAMPUS supplement coverage, coverage arising out of a workers' compensation or similar law, automobile medical payment insurance, personal injury protection insurance issued pursuant to P.L.1972, c.70 (C.39:6A-1 et seq.) or hospital confinement indemnity coverage.
"Health care provider" means an individual or entity which, acting within the scope of its licensure or certification, provides a covered service defined by the health benefits plan. Health care provider includes, but is not limited to, a physician and other health care professionals licensed pursuant to Title 45 of the Revised Statutes, and a hospital and other health care facilities licensed pursuant to Title 26 of the Revised Statutes.
"Managed care plan" means a health benefits plan that integrates the financing and delivery of appropriate health care services to covered persons by arrangements with participating providers, who are selected to participate on the basis of explicit standards, to furnish a comprehensive set of health care services and financial incentives for covered persons to use the participating providers and procedures provided for in the plan.
"Utilization management" means a system for reviewing the appropriate and efficient allocation of health care services under a health benefits plan according to specified guidelines, in order to recommend or determine whether, or to what extent, a health care service given or proposed to be given to a covered person should or will be reimbursed, covered, paid for, or otherwise provided under the health benefits plan. The system may include: preadmission certification, the application of practice guidelines, continued stay review, discharge planning, preauthorization of ambulatory care procedures and retrospective review.
2. a. A carrier which offers a managed care plan or uses a utilization management system in any of its health benefits plans shall designate a licensed physician to serve as medical director. The medical director, or his designee, shall be designated to serve as the medical director for medical services provided to covered persons in the State and shall be licensed to practice medicine in New Jersey.
The medical director shall be responsible for treatment policies, protocols, quality assurance activities and utilization management decisions of the carrier. The treatment policies, protocols, quality assurance program and utilization management decisions of the carrier shall be based on generally accepted standards of health care practice. The quality assurance and utilization management programs shall be in accordance with standards adopted by regulation of the department pursuant to this act.
b. The medical director shall ensure that:
(1) Any utilization management decision to deny, reduce or terminate a health care benefit or to deny payment for a health care service, because that service is not medically necessary, shall be made by a physician in consultation with a health care professional licensed or certified in the same discipline as the health care professional who is providing or has recommended the health care service. In the case of a health care service prescribed or provided by a dentist, the decision shall be made by a dentist;
(2) A utilization management decision shall not retrospectively deny coverage for health care services provided to a covered person when prior approval has been obtained from the carrier for those services, unless the approval was based upon fraudulent information submitted by the covered person or the participating provider;
(3) In the case of a managed care plan, a procedure is implemented whereby participating physicians, dentists and other licensed or certified health care professionals have an opportunity to review and comment on all medical and surgical and dental protocols, as appropriate, of the carrier;
(4) The utilization management program is available on a 24-hour basis to respond to authorization requests for emergency and urgent services and is available, at a minimum, during normal working hours for inquiries and authorization requests for nonurgent health care services; and
(5) In the case of a managed care plan, a covered person is permitted to: choose or change a primary care physician from among participating providers in the provider network, and, when appropriate, choose a specialist from among participating network providers following an authorized referral, if required by the carrier, and subject to the ability of the specialist to accept new patients.
3. This act shall take effect immediately.
STATEMENT
This bill provides that a carrier (health maintenance organization, health, hospital or medical service corporation or health insurer) which offers a managed care plan or uses a utilization management system in any of its health benefits plans shall designate a licensed physician to serve as medical director. The medical director, or his designee, shall be designated to serve as the medical director for medical services provided to covered persons in the State and shall be licensed to practice medicine in New Jersey.
The medical director shall be responsible for treatment policies, protocols, quality assurance activities and utilization management decisions of the carrier. The medical director shall ensure that:
(1) Any utilization management decision to deny, reduce or terminate a health care benefit or to deny payment for a health care service, because that service is not medically necessary, shall be made by a physician in consultation with a health care professional licensed or certified in the same discipline as the health care professional who is providing or has recommended the health care service. In the case of a health care service prescribed or provided by a dentist, the decision shall be made by a dentist;
(2) A utilization management decision shall not retrospectively deny coverage for health care services provided to a covered person;
(3) In the case of a managed care plan, a procedure is implemented whereby participating physicians, dentists and other licensed or certified health care professionals have an opportunity to review and comment on all medical and surgical and dental protocols, respectively, of the carrier;
(4) The utilization management program is available on a 24-hour basis to respond to authorization requests for emergency and urgent services and is available, at a minimum, during normal working hours for inquiries and authorization requests for nonurgent health care services; and
(5) In the case of a managed care plan, a covered person is permitted to: choose or change a primary care physician from among participating providers in the provider network, and, when appropriate, choose a specialist from among participating network providers following an authorized referral, if required by the carrier, and subject to the ability of the specialist to accept new patients.
This bill complements the Senate Committee Substitute for Senate Bill No. 269 (1R) of 1996, known as the "Health Care Quality Act"; however, rather than require that utilization management decisions to deny, reduce or terminate services be made solely by a physician, this bill requires that the decision be made by a physician in consultation with a health care professional licensed or certified in the same discipline as the health care professional who is providing or has recommended the health care service.
Requires utilization management decisions in managed care plans to be made by physician in consultation with health care professional in same discipline as referring professional.