By William F. Megna
LEGISLATIVE ACTIVITY
A lame-duck legislative session in New Jersey started after the November 6 elections, and will last until the new Legislature is installed in January. Even though all 120 legislative seats were in play, there was very little change in party control. The Democrats continue to have a sizable majority in the Assembly and Senate.
This lame-duck session will have to deal with controversial issues such as paid family leave, school funding formulas, possible sale of toll roads and other asset monetization plans, repeal of the death penalty, eminent domain and affordable housing initiatives. Only two general voting sessions have been scheduled by the Assembly and Senate during this period.
Senator Vitale recently was reported in the press to say that he will not introduce his health reform plans until next year. If the Administration introduces any of its own health reform plans during lame-duck, I suspect the proposals would be heard in committee only as a trial balloon for the next year.
On October 26, the Governor signed A.439, a bill requiring health insurers to honor an assignment of benefits for ambulance service payments. The bill was amended during the legislative process to:
- Narrow the scope to include only emergency ambulance services;
- Lower the interest rate for overdue payments from 20% to 12%; and
- Exclude application to Medicaid coverage.
A.3790 was passed by the Assembly on June 21st and was referred to the Senate Health Committee. There is a possibility that the bill could be heard by this committee during lame-duck. The bill, as amended by the Assembly, reforms the review, processing and payment of certain health and other (e.g., workers’ compensation, accident, auto) insurance claims relating to the provision of physical therapy services by physical therapists. Among other things, the bill:
- Bans the use of prior authorization for physical therapy services;
- Bans the use of a referral for physical therapy services;
- Requires the use of the PIP fee schedule for payment of certain physical therapy benefits;
- Requires a carrier to accept an assignment of benefits;
- Appears to empower only providers to make determinations of medical necessity;
- Defines a “covered physical therapy benefit” to be any service provided by a physical therapist to a covered person, irrespective of any coverage limit in the contract, and thus appears to create an unlimited benefit; and
- Requires carriers to respond to request for prior authorization within three days.
A.4430 was introduced in the Assembly on November 8th. This is an radical piece of legislation, which would replace any form of managed care with mandatory hospital and medical fee schedules. This is a bill to watch in the next session as health care issues will begin to take center stage with the Administration. The State’s projected $3 Billion budget deficit, however, must be resolved by July 1st of next year before any real debate on health reform can take place.
REGULATORY ACTIVITY
The Department of Banking and Insurance (DOBI) has proposed amendments to its rules relating to general contract provisions for group life, group health and blanket insurance. The new rules provide the following changes of interest. require that an insurer shall not limit or exclude benefits for losses caused by third parties; prohibit carriers from limiting or excluding health benefits for losses resulting from complications from elective medical procedures, including surgeries (this may require changes to the standard SEH plans which currently exclude complications from cosmetic surgery); prohibit a carrier from reserving to itself the sole discretion to interpret the terms of the policy; require civil union partners to have the same benefits and protections afforded to spouses; and clarify what type of benefits are subject to rules governing preauthorization. Many of the changes simply put into regulation existing DOBI positions.
DOBI amended its HCAPPA Q & A on its website to provide guidance that offsets for alleged overpayments of HCAPPA-subject claims should only be made against future HCAPPA-subject claims involving the same health care provider and the same carrier. In effect, this would create a need to segregate the accounting of provider payables.
On October 17th, DOBI issued its eleventh-annual HMO report card. Generally, the findings were that health plans were consistent in most performance categories while customer satisfaction measures deteriorated somewhat. However, DOBI noted in its press release that some of the more significant changes in customer satisfaction could be a result of changes in the format of the customer satisfaction questionnaire.
OTHER DEVELOPMENTS
The Attorney General/Board of Medical Examiners Advisory Committee on Physician Compensation is seeking public comment concerning all forms of direct and indirect compensation to physicians from the pharmaceutical and medical device industries that may cause, or be perceived to cause, conflicts of interest or undue influence in medical practice. An informal committee hearing will take place on November 16, 2007.
Bill Megna is Of Counsel in the firm’s insurance and riensurance group. His practice spans the entire spectrum of insurance products and services including property and casualty, life and health, reinsurance, surplus lines, and captives. Bill is managing attorney of the firm’s New Jersey office and also practices out of the D.C. office.
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