The New Jersey Department of Banking and Insurance is proposing amendments to the rules which implement the Health Claims Authorization, Processing and Payment Act (HCAPPA), ten years subsequent to HCAPPA’s original promulgation. On January 12, 2006, effective July 11, 2006, HCAPPA was enacted to establish uniform procedures and guidelines for health carriers (defined to exclude dental service corporations and dental plan organizations) and medical providers to administer utilization management and claims payment processes.  Since the effective date of HCAPPA, the New Jersey Department of Banking and Insurance (Department) has issued four bulletins [Bulletin No. 06-16 (, 06-17 (, 07-14 (, and 10-32 (], several forms (for example, consent and notice forms regarding appeals of utilization management determinations, and consent, notice and applications forms regarding prompt payment of claims); and FAQs and other information to provide guidance to carriers, health care providers and other interested parties regarding their rights and responsibilities pursuant to HCAPPA.

In July of 2007 the Department proposed rules to implement the provisions of HCAPPA related to claims payment and establishment of an independent claims arbitration program, which included amendments to the Department’s current prompt payment of claims at N.J.A.C. 11:22-1 and new rules within that chapter.  The Department received numerous comments on the notice of proposal, and final rules were never adopted.  The original proposal has since expired.  At this time, the Department is once again proposing rules to implement these provisions of HCAPPA.  The new rulemaking includes the following:

  • N.J.A.C. 11:22-1.1 (purpose and scope) is amended to include prepaid prescription service organizations within the scope of the rules.
  • Several definitions are amended or added at N.J.A.C. 11:22-1.2.
  • N.J.A.C. 11:22-1.4 (claim submission requirements) is proposed for repeal and its replacement requires health carriers to provide certain claims processing and payment information that is contained in the proposed new rules through a publicly-accessible internet website.
  • N.J.A.C. 11:22-1.5 (prompt payment of claims) is amended to include in subsection (b) the term “substantiating documentation” and to add a new subsection (c) prohibiting carriers from denying, delaying, or pending payment of claims while seeking coordination of benefits information, except for good cause.  This section is further revised to require that payment of a claim is considered to have been made on the date it is placed in the U.S. mail and a post-paid envelope (containing the most recent address filed with the carrier by the provider, rather than “properly addressed”).  The current timeframe within which “clean claims” are to be paid (30 calendar days after receipt of the claim where the claim is submitted by electronic means or the time established by the federal Medicare program by 42 U.S.C. § 1395U(c)2(b), whichever is earlier); or 40 calendar days after receipt of a claim where the claim is submitted by other than electronic means remains.  The provision regarding the rate of interest to be paid on overdue claims is relocated to new subsection (e) and that subsection distinguishes between the 10% interest rate to be paid by dental plan organizations and dental service corporations, and the 12% interest rate to be paid by health carriers, on all late-paid claims payments.  For all carriers, interest begins to accrue 30 or 40 days (as applicable) from the date the carrier receives all information and documentation required to process the claim.
  • N.J.A.C. 11:22-1.6 (denied and disputed claims) requires carriers to either deny or dispute a claim that was not paid.  New language is added at subsection (a) stating that a carrier’s or its agent’s characterization of a claim as pending shall not release the carrier of its obligation to either deny or dispute a claim.  The section also revises the specific grounds on which carriers may deny or dispute a claim, and establishes requirements with respect to the notice carriers must give to the provider and/or the covered person related to each of those provisions.  Subsection (c) is deleted since aggregation of interest is no longer permitted pursuant to HCAPPA and the timelines and interest requirements are described in other parts of the rules.  Subsection (f) which currently addresses carrier adjustments to previously paid claims, is deleted from this section, and a new section addressing carrier reimbursement of overpaid claims is proposed at N.J.A.C. 11:22-1.8.
  • N.J.A.C. 11:22-1.8 (reimbursement of overpaid claims) sets forth the circumstances under which a health carrier or its agent may base a request for reimbursement of a paid claim on extrapolation of other claims.  Subsection (b) reflects the HCAPPA requirement that health carriers’ requests for reimbursement of overpaid claims be made within 18 months of the date on which the first payment on the claim was made.  This subsection also sets forth the conditions under which health carriers may offset overpayment of insured claims, allows for providers to contest a notice of overpayment, and contains the procedural requirements for a health carrier to request reimbursement of an overpaid claim.
  • Proposed new N.J.A.C. 11:22-1.2 (reimbursement of underpaid claims) establishes that provider requests for reimbursement of underpaid claims must be made within 18 months from the date the first payment on the claim was made unless the claimant is the subject of an internal appeal or is subject to continued claims submission.  This rule also contains the procedural requirements for a provider to request reimbursement of an underpaid claim.  Also, the rule confirms that no provider is permitted to seek more than one reimbursement for the underpayment of any particular claim.
  • New rules amend and recodify provisions of HCAPPA regarding external appeals, alternate payment dispute resolution with respect to dental plan organizations and dental service corporations, external appeals with respect to health carriers (implementing HCAPPA’s provisions addressing non-appealable, binding independent arbitration of claim payments disputes.  Standards and procedures for the arbitration process, including arbitrable disputes and arbitration application and proceeding requirements are also included at N.J.A.C. 11:22-1.13.
  • Recodified N.J.A.C. 11:22-1.14 amends the Department’s current reporting requirement rules to eliminate the requirement for submission of separate quarterly reports on the timeliness of claim payments and quarterly and annual reports on the reasons for denial and late payment of claims.
  • N.J.A.C. 11:22-1.15 proposes minor housekeeping amendments to the rule addressing remediation following the Commissioner’s review required to be submitted pursuant to N.J.A.C. 11:22-1.14.  A new subsection is proposed which allows the Commissioner to impose certain penalties for violation of the sub-chapter under certain conditions.
  • Other miscellaneous proposed changes are more fully described in the proposal which is linked here.

Comments on the amended proposal may be submitted in writing to Denise Illes, Chief, Office of Regulatory Affairs, 20 West State Street, P.O. Box 325, Trenton, New Jersey 08625-0325, via fax at 609-292-0896, or via email at on or before October 20, 2017.

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