SENATE, No. 1211

STATE OF NEW JERSEY

216th LEGISLATURE

 

INTRODUCED JANUARY 30, 2014

 


 

Sponsored by:

Senator  JOSEPH F. VITALE

District 19 (Middlesex)

 

 

 

 

SYNOPSIS

     Requires audits of managed care plan provider networks.

 

CURRENT VERSION OF TEXT

     As introduced.

  


An Act concerning certain health insurance carriers, supplementing Titles 26 and 30 of the Revised Statutes and amending R.S.52:24-4.

 

     Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

     1.    (New section)  a.  A carrier which offers a managed care plan shall provide for an annual audit of its provider network by a private auditing firm.  The audit shall be at the expense of the carrier and the carrier shall submit the audit findings to the commissioner.

     b.    If the audit contains a determination that a carrier has failed to maintain an adequate network of providers in accordance with applicable federal or State law, including specialists as enumerated in N.J.A.C.11:24-6.2, the Commissioner of Banking and Insurance shall impose a civil penalty of not less than $500 nor more than $10,000 upon the carrier for each instance in which the audit determines that the carrier failed to maintain an adequate network. The civil penalty shall be collected by the commissioner pursuant to the “Penalty Enforcement Law of 1999”P.L.1999 c.274 (C.2A:58-10 et seq.).

     c.    A carrier that has failed to maintain an adequate network shall be prohibited from delivering, executing, or renewing health benefits plans in this State if the carrier does not comply with the requirements set forth in this section within 90 days of the imposition of the civil penalty.

 

     2.    R.S.52:24-4 is amended to read as follows:

     52:24-4.  It shall be the duty of the State Auditor to conduct post-audits of all transactions and accounts kept by or for all departments, offices and agencies of the State Government, to report to the Legislature or to any committee thereof and to the Governor, and to the Executive Director of the Office of Legislative Services, as provided by this chapter and as shall be required by law, and to perform such other similar or related duties as shall, from time to time, be required of him by law.

     The State Auditor shall personally or by any of his duly authorized assistants, or by contract with independent public accountant firms, examine and post-audit all the accounts, reports and statements and make independent verifications of all assets, liabilities, revenues and expenditures of the State, its departments, institutions, boards, commissions, officers, and any and all other State agencies, now in existence or hereafter created, hereinafter in this chapter called "accounting agencies."

     The State Auditor shall conduct, at the direction of the Legislative Services Commission or of the presiding officer of either house of the Legislature or on the State Auditor's own initiative, a performance review audit of any program of any accounting agency, any independent authority, or any public entity or grantee that receives State funds, in a manner that is consistent with the Government Auditing Standards for performance audits utilized by the United States  Government Accountability Office or its successor.

     The State Auditor shall annually conduct a performance review audit of every health maintenance organization that contracts with the Department of Human Services to provide health care services for recipients of the Medicaid program pursuant to P.L.1968, c.413 (C.30:4D-1 et seq.) in order to determine whether the health maintenance organizations individually and as a group have established and maintained adequate provider networks, including specialists as enumerated in N.J.A.C.11:24-6.2, which are accepting recipients of the Medicaid program as patients in accordance with the provisions of their contracts.

     When the State Auditor conducts any audit or performance review audit, the accounting agency, or authority, entity [or], grantee, or health maintenance organization, shall respond in writing to each item in the State Auditor's report and the State Auditor, at an appropriate time determined by him, shall conduct a post-audit review of the accounting agency's, or authority's, entity's, [or] grantee's, or health maintenance organization’s compliance with the State Auditor's recommendations.

     The officers and employees of each accounting agency, or authority, entity, [or] grantee, or health maintenance organization, shall assist the State Auditor, when and as required by him, and provide the State Auditor with prompt access to all records necessary for the State Auditor to perform his duties, notwithstanding any statutory or regulatory requirements of confidentiality with regard to the records, for the purpose of carrying out the provisions of this chapter.  The State Auditor shall report the failure of any accounting agency, or authority, entity, [or] grantee, or health maintenance organization, to provide prompt access to any relevant record to the presiding officer of each house of the Legislature. The State Auditor shall not disclose a confidential record provided by an accounting agency, or authority, entity, [or] grantee, or health maintenance organization, except as may be necessary for the State Auditor to fulfill his constitutional or statutory responsibilities.  Working papers prepared by the State Auditor shall be confidential and shall not be considered government records under P.L.1963, c.73 (C.47:1A-1 et seq.).

     Notwithstanding any law to the contrary, post-audits and performance review audits shall be conducted within the limits of the resources and personnel available to the State Auditor.  If resources and personnel are insufficient to conduct all such required post-audits and performance review audits, the State Auditor may prioritize certain audits and forgo others upon notice to the Governor and the presiding officer of each house of the Legislature.

(cf: P.L.2006, c.82, s.1)

 

     3.    (New section)  For each instance in which the State Auditor determines, pursuant to R.S.52:24-4, that a health maintenance organization has not established or maintained a provider network that accepts recipients of the Medicaid program as patients in accordance with the provisions of its contract with the Department of Human Services to provide health care services for recipients of the Medicaid program pursuant to P.L.1968, c.413 (C.30:4D-1 et seq.), the Commissioner of Human Services shall impose a civil penalty of not less than $500 nor more than $10,000.  The commissioner shall collect the penalty pursuant to the “Penalty Enforcement Law of 1999,” P.L.1999, c.274 (2A:58-10 et seq.).

 

     4.    This act shall take effect on the 60th day following enactment.

 

 

STATEMENT

 

     This bill supplements the consumer safeguards with respect to health benefits plans provided by health insurance carriers that were established pursuant to the “Health Care Quality Act,” P.L.1997, c.192 (C.26:2S-1 et seq.).

     The bill provides specifically that a carrier which offers a managed care plan must provide for an annual audit of its provider network, at its own expense, by a private auditing firm.  If the audit finds that a carrier failed to maintain an adequate network in accordance with applicable federal or State law, including specialists as enumerated in N.J.A.C.11:24-6.2, the Commissioner of Banking and Insurance is to impose a civil penalty of not less than $500 nor more than $10,000 upon the carrier for each instance in which the audit determines that the carrier failed to maintain an adequate network.  A carrier that has failed to maintain an adequate network is prohibited from delivering, executing, or renewing health benefits plans in this State if the carrier does not comply with the requirements set forth in this bill within 90 days of the imposition of the civil penalty.

     The State Auditor is directed to annually conduct a performance review audit of every health maintenance organization (HMO) that contracts with the Department of Human Services to provide health care services for Medicaid recipients in order to determine whether the HMOs individually and as a group have established and maintained adequate provider networks, including specialists as enumerated in N.J.A.C.11:24-6.2, which are accepting recipients of the Medicaid program as patients in accordance with the provisions of their contracts.  The Commissioner of Human Services is to impose a civil penalty of not less than $500 nor more than $10,000 upon a HMO for each instance in which the State Auditor determines that the HMO has not established or maintained a provider network that accepts Medicaid recipients as patients in accordance with the provisions of its contract. 

     The bill takes effect on the 60th day after enactment.