SENATE, No. 2051

STATE OF NEW JERSEY

INTRODUCED MAY 8, 1997

By Senators BASSANO and LIPMAN

An Act concerning PACE programs and supplementing Title 17B 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:

    "Medicaid" means the program established pursuant to P.L.1968, c.413 (C.30:4D-1 et seq.).

    "Medicare" means the program established pursuant to Pub.L.89-97 (42 U.S.C.§1395 et seq.).

    "PACE" means the "Program for All-Inclusive Care for the Elderly," operated by either a public or private nonprofit community-based organization. The program is a comprehensive health and social services delivery system that integrates acute and long-term care services on a dually capitated, Medicare and Medicaid, prepaid contractual basis for disabled and frail elderly persons who have been certified as needing long-term care services, allowing these persons to remain in their community.

    "Pre-PACE" means a PACE program in its initial start-up phase and includes the same comprehensive scope of services as a PACE program, but which contracts with the Medicaid program on a prepaid capitated basis for a more limited scope of services than in a PACE program and which receives payment on a fee-for-service basis for the balance of services provided by or through the program.

    2. An entity seeking to operate a Pre-PACE or a PACE program in the State under contract with the State Medicaid program shall apply to the Department of Banking and Insurance for a certificate of authority pursuant to this act and shall submit such information about the program and remit such application fees as shall be required by the Commissioner of Banking and Insurance, by regulation.

    a. Following receipt of an application for a certificate of authority, the Commissioner of Banking and Insurance shall review it in consultation with the Commissioners of Health and Senior Services and Human Services and notify the applicant of any deficiencies contained therein within 30 days.

    b. The Commissioner of Banking and Insurance shall determine whether the applicant is financially sound and may reasonably be expected to meet its obligations to program recipients. The commissioner may require the applicant, if he deems it necessary in order to ensure that the applicant will be able to meet its obligations to program recipients, to deposit with the commissioner, or with an entity or trustee acceptable to the commissioner through which a custodial or controlled account is utilized, cash, securities or any combination of these or other measures that is acceptable to the commissioner in an amount established by the commissioner.

    c. The Commissioner of Banking and Insurance shall issue the certificate of authority within 30 days of the receipt of the application if he finds that the applicant meets the standards required by the Department of Banking and Insurance and the Departments of Health and Senior Services and Human Services pursuant to this act.

    d. A Pre-PACE program which seeks to convert its certificate of authority to a PACE program shall notify the Commissioner of Banking and Insurance and shall meet such additional requirements applicable to a PACE program as established by the commissioner pursuant to this act.

    e. A certificate of authority shall be valid for three years and may be renewed in accordance with regulations adopted by the Commissioner of Banking and Insurance.

    3. a. The Commissioner of Banking and Insurance, in consultation with the Commissioners of Health and Senior Services and Human Services, shall adopt regulations pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) regarding financial solvency of Pre-PACE and PACE programs.

    b. The Commissioners of Health and Senior Services and Human Services, shall jointly adopt regulations pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.)

regarding relevant standards for Pre-PACE and PACE programs.

    4. This act shall take effect immediately.

STATEMENT

    This bill authorizes the Commissioner of Banking and Insurance to issue a certificate of authority for PACE and Pre-PACE programs which may contract with the State Medicaid program.

    PACE means the "Program for All-Inclusive Care for the Elderly," operated by either a public or private nonprofit community-based organization. The program is a comprehensive health and social services delivery system that integrates acute and long-term care services on a dually capitated, Medicare and Medicaid, prepaid contractual basis for disabled and frail elderly persons who have been certified as needing long-term care services, allowing these persons to remain in their community. "Pre-PACE" means a PACE program in its initial start-up phase and includes the same comprehensive scope of services as a PACE program, but which contracts with the Medicaid program on a prepaid capitated basis for a more limited scope of services than in a PACE program and which receives payment on a fee-for-service basis for the balance of services provided by or through the program.

    The PACE program is currently a Medicare and Medicaid demonstration project of the federal Health Care Financing Administration in the Department of Health and Human Services, although it is anticipated that Congress will enact legislation this session to authorize Medicare reimbursement for PACE programs on a permanent basis. Until such time as federal legislation is adopted, PACE programs cannot be implemented in the State (there are no demonstration sites in the State); however, Pre-PACE programs, which do not contract with Medicare on a prepaid, capitated basis, but do contract with a state Medicaid program, can be established in the State, pending receipt of a certificate of authority under this bill.

    The bill requires a Pre-PACE or a PACE program (when federal law so permits) to apply to the Commissioner of Banking and Insurance who shall review the application in consultation with the Commissioners of Health and Senior Services and Human Services and determine whether the applicant is financially sound and may reasonably be expected to meet its obligations to program recipients. The Commissioner of Banking and Insurance may, if he deems it necessary, require the applicant to deposit with the commissioner, or with an entity or trustee acceptable to the commissioner through which a custodial or controlled account is utilized, cash, securities or any combination of these or other measures that is acceptable to the commissioner in an amount established by the commissioner.

    The Commissioner of Banking and Insurance shall issue the certificate of authority within 30 days of the receipt of the application if he finds that the applicant meets the standards required by the Department of Banking and Insurance and the Departments of Health and Senior Services and Human Services. The certificate of authority will be valid for three years and may be renewed thereafter.

Authorizes Commissioner of Banking and Insurance to issue certificate of authority to PACE and Pre-PACE programs.