DEPARTMENT OF BANKING AND INSURANCE
DIVISION OF INSURANCE
Health Benefit Plans
Prompt Payment of Claims
Denied and Disputed Claims
Reproposed Amendment: N.J.A.C. 11:22-1.3
Proposed Amendments: N.J.A.C. 11:22-1.5, 1.6 and 1.8
Authorized By: Holly C. Bakke, Commissioner, Department of Banking and Insurance
Authority: N.J.S.A. 17:1-8.1, 17:1-15e, 17B:30-13.1, 17B:30-2.3 et seq. and 26:2J-15b
Calendar Reference: See Summary below for explanation of exception to calendar requirement.
Proposal Number: PRN 2002-252
Submit comments by September 13 , 2002 to:
Karen Garfing, Assistant Commissioner
Department of Banking and Insurance
20 West State Street
P.O. Box 325
Trenton, New Jersey 08625-0325
Fax: (609) 292 -0896
The agency proposal follows
The Department of Banking and Insurance ("Department") is reproposing amendments to N.J.A.C. 11:22-1.3, based on comments received by the Department on these rules as they were proposed in September 17, 2001 at N.J.R. 3239(a). As a result of the comments, the Department did not include these amendments as part of its adoption of amendments to N.J.A.C. 11:22-1.6, published elsewhere in the issue of the New Jersey Register, because these provisions reflect substantive changes that required additional public comment. The Department is also proposing amendments to N.J.A.C. 11:22-1.5, 1.6 and 1.8.
The Department believes that the proposed amendments provide for the prompt payment of claims; a more efficient process for acknowledging claims; and reduce paperwork by only requiring the submission of internal and external annual appeals reports when requested.
The Department is amending N.J.A.C. 11:22-1.3 to outline what constitutes receipt of a claim for the purpose of acknowledgement. These amendments adopt commentersí suggestions raised in response to the Departmentís proposal of N.J.A.C. 11:22-1.3 (see 23 N.J.R. 3239(a) and the notice of adoption in this issue of the New Jersey Register). These amendments require that the acknowledgement include the date the carrier received the claim. Additionally, these rules state that the remittance of a claim in two days if done electronically or 15 days when received by written notice constitute acknowledgement of receipt. These amendments also permit carriers to provide claim status information, including the date of receipt by a web-based access system or an automated telephone system. These amendments also delete the reference to receipt being based on the U.S. mail postmark. The Department is also deleting subsection (b), because it is already covered by N.J.A.C. 11:22-1.6, which addresses denied and disputed claims and the notice provided to the covered person of a denied or disputed claim is not an acknowledgement.
The Department is amending N.J.A.C. 11:22-1.5(a)2 to delete the reference that written claims are considered received based on the U.S. mail postmark.
The Department is amending N.J.A.C. 11:22-1.6 to permit carriers to aggregate interest amounts up to $25.00 with the consent of the provider. The Department is amending paragraph (a)1 to include missing or incorrect data. The Department is amending subparagraph (a)1iv to prevent a carrier or agent from denying or disputing a claim for reasons other than those set forth in the initial notice, unless the information is received after the initial review and leads to additional reasons for denying or disputing the claim. The Department is also amending subsection (a) to include a line from the proposed deletion of N.J.A.C.11:22-1.3(b), which addresses the remittance of payment. The Department is also amending N.J.A.C.11:22-1.6(a) by adding a provision to clarify that the pending of a claim by a carrier does not constitute a denial or dispute. It must be paid, denied or disputed.
The Department is amending N.J.A.C. 11:22-1.8 to require carriers to maintain annual reports and make them available to the Department upon request, rather than submit them to the Department.
The Departmentís rule proposal provides for a comment period of 60 days, and therefore, pursuant to N.J.A.C.1:30-3.3(a)5, is not subject to the provisions of N.J.A.C. 1:30-3.1 and 3.2 governing rulemaking calendars.
The proposed amendments provide carriers with an efficient and effective means to acknowledge the submission of written claims by alternative methods, for example., use of a web-based access to claim status or use of an automated telephone system. The amendments should make it easier for providers to determine the status of their claims.
Additionally, the amendments that require carriers to maintain and make internal or external appeals reports available upon request, rather than requiring their filing, should be beneficial to the carriers and the Department by eliminating a required filing.
The proposed amendments to N.J.A.C. 11:22-1.3 should benefit insurers who expressed concern about the requirement to acknowledge written submission of claims through a written acknowledgement. The proposed amendments provide insurers with alternatives for the issuance of a proper acknowledgement, that is, a web-based system or automated telephone system. Insurers who opt for the automated telephone system or web-based access may incur minimal additional start-up costs in order to establish the system.
The proposed amendments to N.J.A.C. 11:22-1.6 should provide cost savings for carriers in that they permit carriers to aggregate interest amounts under $25.00, with the consent of the provider. This avoids the need for the carrier to write numerous checks for very small amounts.
Additionally, the amendments to N.J.A.C. 11:22-1.8 that require carriers to maintain and make internal or external appeals reports available upon request should be beneficial to the carriers and the Department by eliminating the requirement to submit another report.
Federal Standards Statement
A Federal standards analysis is not required because the proposed amendments are not subject to any Federal standards or requirements.
The Department does not anticipate that these proposed amendments will result in the generation or loss of jobs.
Agriculture Industry Impact
The Department does not expect any impact on the agriculture industry from the proposed
Regulatory Flexibility Analysis
The proposed amendments may apply to some carriers that constitute "small businesses" as that term is defined in the Regulatory Flexibility Act at N.J.S.A. 52:14B-16 et seq. The Department does not believe that the reporting, recordkeeping and other compliance requirements of the proposed amendments, as described in the Summary above, should entail a significant capital expense for carriers (see Economic Impact above). The Department does not anticipate that insurers will need to employ professional services in order to comply.
The Department does not believe that it would be appropriate to reduce, alter or eliminate the requirements of these amendments based on the size of the carrier involved. Carriers of all sizes enter into contracts with providers and insureds to pay claims promptly. When payment does not occur because a claim is denied, the Department believes it is appropriate for all payers, regardless of size, to provide all reasons why a claim was disputed or denied. The Department also believes, that regardless of the size of a carrier, a provider should be able to know if a claim has been received. Therefore, no relaxation of the rules based on business size has been provided.
Smart Growth Impact
The proposed amendments have no impact on the achievement of smart growth and implementation of the State Development and Redevelopment Plan.
Full text of the proposal follows (additions indicated in boldface thus; deletions indicated in brackets [thus]:
11:22-1.3 Acknowledgement of receipt of claims
(a) A carrier or its agent shall acknowledge receipt of [a claim by the same means it was received upon request from a health care provider or covered person either:] all claims. The acknowledgement shall include the date the carrier or its agent received the claim.
1. If a claim is submitted by electronic means, the claim shall be acknowledged electronically no later than two working days following receipt of [a] the claim [submitted by electronic means]. The acknowledgement of receipt of an electronic claim shall go to the entity from which the carrier received the claim [; or].
2. If a claim is submitted by written notice, the claim shall be acknowledged no later than 15 working days following receipt of [a] the claim [submitted by other than electronic means. Written claims are considered received based on the U.S. mail postmark date].
(b) [The carrier or its agent shall provide written notice to the provider, and the covered person within 30 days of receipt of the claim, if the carrier disputes or denies a claim, in full or in part. The notice shall comply with the requirements of N.J.A.C. 11:22-1.6. If only a portion of a claim is disputed or denied, the carrier or its agent shall remit payment for the uncontested portion in accordance with N.J.A.C. 11:22-1.5.] If a carrier or its agent remits payment within two working days of receipt of a claim submitted electronically, or 15 working days of receipt of a claim submitted by written notice, and such payment includes the date of receipt of the claim, the payment shall constitute acknowledgement of receipt.
(c) If a carrier offers providers web-based access to claims status, the available information shall include the date of receipt of the claims. Such information, if posted within the timelines established in (a)2 above, shall constitute acknowledgement of receipt of those claims.
(d) If a carrier offers providers access to claims status via an automated telephone system, and the available information includes the date of receipt of the claims, and that information is made available within the timelines established in (a)2 above, the posting of that information shall constitute acknowledgement of receipt of those claims.
11:22-1.5 Prompt payment of claims
(a) A carrier and its agent shall remit payment of clean claims pursuant to the following time frames:
1. (No change.)
2. Forty calendar days after receipt of the claim where the claim is submitted by other than electronic means. [Written claims are considered received based on the U.S. mail postmark date.]
(b) - (d) (No change.)
11:22-1.6 Denied and disputed claims
(a) [If a] A carrier or its agent [denies] shall either deny or dispute[s] a claim, in full or in part[,] that has not been processed in accordance with N.J.A.C. 11:22-1.5. If only a portion of a claim is disputed or denied, the carrier or its agent shall remit payment for the uncontested portion in accordance with N.J.A.C. 11:22-1.5. The pending of a claim does not constitute a dispute or denial. [the]The carrier or its agent shall, within 30 or 40 calendar days of receipt of the claim, whichever is applicable, notify both the covered person when he or she will have increased responsibility for payment and the provider of the basis for its decision to deny or dispute, including:
1. The identification and explanation of all reasons why the claim was denied or disputed;
ii. [Reasons] Examples of reasons why a claim cannot be entered into the claims system [are] include: group not covered on date of service; employee/dependent not covered on date of service; non-payment of premium; missing data fields; missing or incorrect data (for example, CPT code, date of service, provider name); and ineligible provider.
iv. A carrier or its agent shall not deny or dispute a claim for reasons other than those identified in the first review after the claim is entered, unless information or documentation relevant to the claim is received after the first review and such documentation leads to additional reasons to deny or dispute which were not present at the time of that review.
2. Ė 4. (No change.)
(b) (No change.)
(c) If the carrier or its agent fails to pay a clean claim within the time limits set forth in N.J.A.C. 11:22-1.5, the carrier shall include simple interest on the claim amount at the rate of 10 percent per year and shall either add the interest amount to the claim amount when paying the claim or issue an interest payment within 14 days of the payment of the claim. Interest shall accrue beginning 30 or 40 days, as applicable, from the date all information and documentation required to process the claim is received by the carrier. The carrier may aggregate interest amounts [under a dollar] up to $25.00, with the consent of the provider.
11:22-1.8 Internal and external Appeals
(a) - (c) (No change.)
(d) Carriers shall [annually] maintain and make available at the request of the Department, the annual provider report, in a format prescribed by the Department, which includes the number of internal and external provider appeals received and how they were resolved.