Assembly Approves Riley Measure To Help Patients Determine Health Insurance Coverage

Legislation Would Require Insurance Companies to Specify Whether a Procedure is Covered When Authorization is Required

(Trenton) - A measure sponsored by Assemblywoman Celeste Riley that would help consumers determine which services are covered under their health insurance policies has been approved by the full Assembly by a vote of 65-4-1.

"Currently, when a hospital calls an insurance company to get authorization the insurance company only has to declare if it is medically necessary.  However, in some instances, the procedure is not covered by the benefit plan," said Riley (D-Salem/Cumberland/Gloucester).

The bill (A-3247) would amend the "Health Claims Authorization, Processing and Payment Act" by requiring health insurance carriers to classify health care services that are deemed medically necessary as a covered benefit.

Currently, carriers that receive a request for authorization from a health care provider are only required to respond to the request with a determination as to whether the health care service is medically necessary under the member's health benefits plan.

Under the measure, carriers that provide authorization would be required to determine that the health care services are a covered benefit under the insured's health benefits plan, in addition to being medically necessary.

"This bill will eliminate any ambiguities that might confuse a patient and remedy the loopholes that exist in our current law," added Riley.  "Insurance companies would be required to specify whether a procedure is a covered benefit when it gives authorization for that procedure."

The bill also would require carriers to remit payment to a hospital if the carrier remits payment to a health care provider who performs services on a patient in that hospital.

Finally, the bill would provide that while a patient remains in the hospital awaiting authorization from the carrier to be transferred to another facility to receive medically necessary health care services that are not rendered by that hospital, the carrier shall remit payment to the hospital in connection with the contracted acute care rate until the patient is transferred to another health care facility.

Currently, if it is determined that a patient needs to be transferred to another health care facility, carriers will begin to remit payment to a hospital at a rate that is less that the amount contracted for between hospital and the carrier.  This bill provides that the carrier shall remit payment to the hospital at a rate based on the actual setting of care.

The requirements would take effect on the 90th day after the date of the bill's enactment.  The bill now awaits consideration by the Senate.