All carriers, other than HMOs, offering health benefits plans are required to submit an "HCQA Section 3 Form" (PDF or MS-Word) to the Valuations Bureau of the Department of Banking and Insurance (Department). The information to be provided in this form basically provides a brief explanation of the carrier's internal patient appeals process, IF ANY.

If a carrier offers a health benefits plan that incorporates utilization management (UM) features then the carrier also must comply with certain provisions of the Health Care Quality Act (HCQA), N.J.S.A. 26:2S-1 et seq., and regulations implementing that law. Utilization management involves a medical necessity determination. UM may include one of more of the following: preadmission certification, the application of practice guidelines, continued stay review, discharge planning, preauthorization of ambulatory care procedures and retrospective review. If a carrier's health benefits plan includes UM features, the carrier must comply with: (1) certain specific notice requirements; (2) standards for the UM program, including qualifications of those people eligible to make adverse UM determinations; and, (3) the requirement to establish a two-stage internal appeal mechanism meeting certain standards. In addition, the carrier's UM determinations are subject to an external review by the Independent Health Care Appeals Program (IHCAP), and the carrier must comply with the decision issuing from the IHCAP. The costs of IHCAP review, using a pre-established per case fee (for a preliminary and full review), are borne by the carrier. As of January 16, 2001, the decisions issuing from the IHCAP are binding upon all carriers.

If a carrier offers a managed care plan, generally combining in-network features with UM features, then additional requirements apply. Not only must most carriers obtain approval for the use of a Selective Contracting Arrangement (SCA), and comply with the rules related to UM, but every carrier also must comply with additional aspects of the HCQA and the regulations implementing the HCQA. These additional requirements are very similar to the standards that HMOs must meet, and include: (1) disclosure requirements; (2) standards for contracting with health care providers; (3) network adequacy standards; (4) other consumer protections; and (5) other health care provider protections. Carriers using an SCA must submit an Annual Report on a form provided by the Department.