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Committee Advances Bill Addressing Insurance Audits & Claims Payment for Health Care Providers During Pandemic

In an effort to ease the workload of health care providers during the ongoing pandemic and ensure reimbursement for services, Assembly Democrats Angelica Jimenez, Ralph Caputo and Herb Conaway sponsor a bill to limit some of the administrative tasks usually required by health insurance companies and guarantee payment of certain medical claims. The Assembly Financial Institutions and Insurance Committee advanced the legislation Thursday.

Under the bill (A-4005), the New Jersey Commissioner of Health would be required to suspend Medicaid audits and audit-related activities during the current public health emergency and for 90 days after its conclusion. The Commissioner would then be permitted to further suspend audits in increments of 30 days.

As such, Medicaid would not be permitted to audit providers – except in the case of federally-required audits – on medical necessity of services, level of care, diagnostic coding and utilization management. The purpose of this would be to make it easier for hospital employees dealing with COVID-19 cases to provide care to their patients without needing to set aside time for administrative paperwork and audits normally required by health insurers.

“Although our state has seen a decrease in the number of COVID-19 hospitalizations over the past few weeks, healthcare providers are still busy caring for these patients and taking extra precautions to keep everyone safe,” said Assemblywoman Jimenez (D-Bergen, Hudson). “Unfortunately, there’s also the possibility of hospitalizations going back up as more activity resumes and residents go out into their communities again. Now is not the time to burden hardworking healthcare professionals with extra paperwork and audits as they handle an ongoing pandemic.”

The bill would also require the New Jersey Commissioner of Banking and Insurance to suspend the filing of retroactive reviews of health care provider claims based on medical necessity, level of care, diagnostic coding or utilization management during the same time period, with the ability to then continue suspending reviews in 30 day increments.

Once reviews resume, health insurers would not be permitted to retroactively deny claims for medically necessary services related to COVID-19 that were provided during the public health emergency, including emergency room and inpatient hospital care. Insurers would also have to take into consideration the extraordinary circumstances during the emergency and make sure that any required paperwork for reviews is reasonable.

“Not only do we need to limit excessive administrative work for busy healthcare providers in the midst of a public health crisis, but we also need to limit concerns over medical claims being denied,” said Assemblyman Caputo (D-Essex). “Patients and their doctors should not have to worry about being on the hook for expensive treatments that were needed to not only save the patient’s life, but help prevent any further spread of a deadly, contagious virus in our state.”

The bill’s stipulations would not apply in the case of fraud or egregious billing practices.

“Healthcare providers throughout New Jersey continue to put everything on the line to save the lives of countless residents during this pandemic,” said Assemblyman Conaway (D-Burlington). “Denying claims on the basis of medical necessity ignores the turbulent environment hospital employees face as they make decisions on behalf of patients. Medical professionals are doing the best they can to help their patients and must be compensated for the critical services they provide during an uncertain, chaotic time.”

The legislation will now head to the Speaker for further review.