On September 5, 2017, the New Jersey Department of Banking and Insurance (Department) proposed three separate regulations and amendments to render New Jersey law consistent with the federal Patient Protection and Affordable Care Act (ACA).  Among other things, the ACA addresses adverse benefit determinations and the right to appeal such determinations through both an internal and external appeal process.  Each proposal is addressed below.  The proposals are linked here and can be reviewed for a more detailed understanding of the proposed changes.

The most salient proposed changes are addressed below.

The proposed regulations to be codified at N.J.A.C. 11:22-1.2, 1.6, 1.9 and 1.10, and proposed new rule N.J.A.C. 11:22-1.5 address the objective timeframes within which carriers and health maintenance organizations (HMOs) must take action to comply with the internal utilization review organization (IURO) determinations resulting from an external appeal.  The approach embodied in the regulatory proposals is consumer oriented and, in the Department’s view, consistent with the appeal provisions of federal law without exceeding those requirements.

The proposal would amend the rules governing the prompt payment of health benefit claims to increase transparency and accountability related to health benefit plans.  The definition of “explanation of benefits” (EOB) as codified at N.J.A.C. 11:22-1.2 is proposed to be defined as a document a carrier issues to a covered person in response to the submission of a claim for services or supplies.  The EOB must identify both the billed and allowed charges and explain whether services and supplies are covered, the application of cost sharing, such as deductibles and co-pays, the amounts paid by the plan, and the reason(s) for any denial or reduction in the benefits paid.

            New N.J.A.C. 11:22-1.5 is proposed and embodies the minimum requirement for an EOB.  Specifically, every carrier is required to provide an EOB, electronically or in writing, to a covered person in response to the filing of a claim by a provider or a covered person under a health benefits plan.  A carrier or its agent must provide an EOB within 30 days if the claim is filed electronically or 40 days if a claim is submitted in writing.  The EOB will require information including:

1.    the name of the covered person;

2.    the name of the provider;

3.    the date of service;

4.    a clear description of the service provided;

5.    the billed charge;

6.    the allowed charge;

7.    the non-covered amount;

8.    a specific explanation of why a charge is not covered by a health benefits plan;

9.    the amount that is the covered person’s responsibility due to the cost sharing arrangements under the specific contract;

10.  the accumulation towards the covered person’s deductible or family deductible, as applicable;

11.  the accumulation towards the covered person’s maximum out-of-pocket or family maximum out-of-pocket, as applicable;

12.  the amount paid by the plan, with interest shown separately, if interest is paid;

13.  an explanation of the process to appeal the determination on the claim and a telephone number that the covered person can utilize to secure additional information on the processing of the claim; or

14.  if a review of the claim is still pending upon issuance of the EOB, the EOB shall so state and items 6 through 10 above can be omitted.

The Department also proposes to amend N.J.A.C. 11:24-1.2 and N.J.A.C. 11:24A-1.2 and 2.3 which are regulations implementing the Healthcare Quality Act and addressing application to insurance companies, health service corporations, hospital service corporations and HMOs.  The proposed amendments to the rules are intended to reinforce the existing rights of a covered person to request to receive services from an out-of-network provider, but only pay network level cost sharing when the network associated with the covered person’s plan does not contain a qualified, accessible and available provider to perform the needed service.  To that end, N.J.A.C. 11:24-1.2 and 11:24A-1.2, which both contain definitions used in their respective chapters, are proposed to be amended to add a definition of “in-plan exception” to each chapter.  The “in-plan exception” is to be defined to mean a request by a covered person or a provider to obtain services from an out-of-network provider, with the covered person’s liability limited to network cost sharing because the carrier’s network does not have providers who are qualified, accessible and available to perform the medically necessary covered service the covered person requires.

Additionally, the definition of “adverse benefit determination” is proposed to be amended in both N.J.A.C. 11:24-1.2 and 11:24A-1.2 to specify that the term “adverse benefit determination” specifically includes a denial of a request for an in-plan exception as a type of adverse benefit determination subject to internal and external appeal.

N.J.A.C. 11:24A-2.3, governing carriers’ disclosure requirements to covered persons through a handbook, certificate or other evidence of coverage designed for covered persons, is proposed to be amended at N.J.A.C. 11:24A-2.3(a)1 to require the disclosure of information concerning the right of a covered person to request to use an out-of-network provider at network cost sharing when the provider does not contain a qualified, accessible and available provider to perform a service.  N.J.A.C. 11:24A-2.3(a)3 is also proposed to be amended to specify that the carrier must provide disclosure of information concerning the process a covered person or provider must follow to request to use an out-of-network provider and be responsible only for network cost sharing.

Finally, the Department of Banking and Insurance proposes to amend N.J.A.C. 11:2-17.9, 11:24-8.7 and 11:24A-3.7 to clarify impermissible practices relating to health benefit plan claims processing, and the timing of authorization of services and payment of claims after an IURO determination adverse to the carrier or health maintenance organization.  Significantly, although “carrier” is commonly understood to refer to insurance companies, health service corporations and HMOs, these proposed rules amend rules that were initially adopted to comply with the Health Care Quality Act (N.J.S.A. 26:2s-1 et seq.) which defines carrier and HMO separately.  Therefore, carriers are addressed separately from HMOs in these proposed amendments.

Each of the three proposals are designed to achieve transparency in the delivery of health care within the State of New Jersey and, therefore, are consumer oriented.

A 60-day comment period is provided with respect to the Department’s proposals and comments may be submitted in writing to Denise M. Illes, Chief, Office of Regulatory Affairs, Department of Banking and Insurance, 20 West State Street, P.O. Box. 325, Trenton, New Jersey 08625-0325.  Fax:  (609) 292-0896.  Email:

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