A selective contracting arrangement (SCA) is an arrangement for the payment of predetermined fees or reimbursement levels for covered services by the carrier to preferred providers or preferred provider organizations (PPOs).
N.J.S.A. 17B:27A-54, effective 06/30/1993, states that an insurer may establish an arrangement "which provides for selective contracting with health care providers and reasonable benefitdifferentials applicable to participating and nonparticipating health care providers." This arrangement must be approved by DOBI in consultation with DHSS. The correspondingregulation for SCAs is N.J.A.C. 11:4-37.1 etc., effective 1/18/1994.
The most common types of Selective Contracting Arrangements are: (1) hospital/medical; (2) dental; (3) pharmacy (4) vision; and (5) behavioral health. However, whenever a carrier contracts with a network of providers in any discipline or specialty, and there is a benefit differential between in-network and out-of-network benefits, a selective contracting arrangement exists and requires DOBI approval.
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