health-insurance-cost

The New Jersey Department of Banking and Insurance (DOBI) published proposed rules on Sept. 5, which may be welcomed by consumers and consumer advocates, perhaps not so much by the health insurance industry. (This publication follows the department’s Aug. 21 publication of long-awaited proposed rules pertaining to New Jersey’s Health Claims Authorization, Processing and Payment Act, N.J.S.A. 17B-30-48 et seq.)

The proposed rules that are the subject of this commentary pertain to three scenarios: (1) out-of-pocket expenses incurred by insureds when using “out-of-network” providers due to medical necessity; (2) deadlines to which health plans must adhere when insureds win their medical necessity appeals; and (3) explanation of benefits (EOBs) that must be provided to insureds and what must—and must not—be included in them.

Out-of-Network Services

According DOBI, these proposed rules are intended to reinforce existing rights of insureds to obtain out-of-network benefits and increase transparency and accountability with respect to network adequacy of health plans. (See 49 N.J.R. 2880(a)).

A new term, i.e., “in-plan exception,” is proposed, which essentially means a request for out-of-network services to be paid as if the services are provided in-network, when the existing provider network does not include the type of provider needed to provide the medically necessary care. Notably, denials of requests for an in-plan exception would be subject to the same appeals process in place for utilization management determinations and are thus reviewable by a third-party, independent utilization review organization, referred to below as an “IURO.”

Deadline to Provide Benefits for Successfully Appealed Medical Necessity Determinations

The proposed rules would require carriers (e.g., HMOs, licensed health insurance companies) to provide, within 10 business days, those benefits that the IURO has determined should be provided. (See 49 N.J.R. 2876(a).) This arises when claims are denied based upon medical necessity determination and are then successfully appealed pursuant to the insured’s appeal rights. The final stage in these appeals is the IURO determination. Under the proposed rule, the services would have to be provided even if the carrier intends to seek judicial review, unless otherwise ordered by a court of law. The current rule, which the proposed rule would replace, requires carriers to submit a written report, within 10 business days, to the IURO, insured and provider to inform them how it will comply with the IURO decision. This proposed rule, essentially, requires delivery of the benefit by the carrier within 10 days (or sooner if medically required), instead of merely submitting a plan to do so within that time frame.

Proposed New EOB Requirements

DOBI is proposing to create a definition of “explanation of benefits” or “EOB.” (See 49 N.J.R. 2877(a).) The new term would mean a document issued from the carrier to the insured in response to the submission of a claim for services or supplies with respect to the insured’s health benefit plan. The EOB must identify billed and allowed charges and must explain whether services or supplies are covered, cost sharing amounts, all amounts paid by the plan, and reasons for denials or reductions in benefits paid.

In addition to creating the definition, the proposed rules would require the inclusion of a set of specific elements to be included in all EOBs, such as the name of the covered person, provider, date of service, “clear” description of service, billed charge, allowed charge and non-covered amount. The EOB must include a “specific” explanation of why a charge is not covered. Also, reasons for the denial must apply to the specific claims, so if multiple grounds for the denial are listed, all such grounds must apply to the specific claim. That is, carriers are prohibited from listing grounds for denying payment that do not apply to the specific claim. (See also 49 N.J.R. 2876(a).)

The EOB must also show the insured’s cost sharing amount, amounts that are accumulated toward his or her deductible and out-of-pocket limits. Also, the EOB must indicate any interest payments made by the plan, must provide appeal instructions, and must provide a telephone number for additional information.

Comments are due Nov. 4, and can be sent via email to the Department of Banking and Insurance Office of Regulatory Affairs at: legsregs@dobi.nj.gov.•