New Jersey - Volume XII, Number 7 - July, 2003

CHANGES PROPOSED IN PERSONAL INJURY PROTECTION RULES

The New Jersey Department of Banking & Insurance (“DOBI”) has proposed numerous changes to its Personal Injury Protection (“PIP”) Medical Protocols rules. New requirements for decision point review plans would require that PIP insurers identify whether they have a vendor to administer their plan and that the vendor have a physician medical director. Insurers must also make available on a website information for providers and insureds about how to use the insurer’s plan. The proposed rules would limit the use of voluntary networks by insurers except for certain types of high-cost testing such as MRI, and durable medical equipment and prescription drugs. Significantly, the proposed new rules would also address the “hidden PPO” issue, where the provider is unaware that the network has contracted with other payers for the network rate for the provider’s services. Networks must be certified by DOBI and any certified network must agree to give providers a list of all of its clients or payers that are entitled to a specific rate under the network’s contract with the provider.

The proposal would also reduce the co-payment and deductible penalties assessed against insureds for going out of network, thus increasing the insurer’s payment to the provider; prohibits insurers from imposing penalty deductibles for failure of an insured to attend a scheduled independent medical examination, unless the plan provides for denial of reimbursement for repeated, unexcused failure to attend scheduled exams; and requires insurers to notify the treating provider, in addition to the insured, whether the insurer will continue to reimburse for treatment after an independent medical exam. Comments can be submitted to DOBI at legsregs@dobi,state.nj.us, by September 19th. PROPOSAL

MANDATES BENEFITS FOR MENTAL ILLNESS

DOBI is also proposing mandated benefits for biologically-based mental illness. The law, in effect since 1999, requires that all health insurance carrier policies and contracts in New Jersey that provide hospital or medical expense benefits or services also provide coverage for biologically-based mental illness under the same terms and conditions applicable to the coverage provided for any other sicknesses under the policy or contract. Some carriers have been illegally denying coverage for certain of these conditions or have been imposing a preauthorization requirement on outpatient treatment for biologically-based mental illness, such as office visits, while not requiring preauthorization for outpatient treatment for other illnesses. DOBI’s proposal seeks to restrict such activities that improperly deny or limit these benefits.

ANESTHESIOLOGY GROUPS ENTER INTO CONSENT ORDER WITH FEDERAL TRADE COMMISSION OVER COLLUSIVE STIPEND DEMANDS

The Federal Trade Commission has approved consent orders entered into with two separate California anesthesiology groups. The orders emanate from a complaint that the groups engaged in price fixing and unfair competition by entering into a joint strategy to secure stipends from their hospital for taking call for obstetrics and providing services to uninsured emergency room patients. Allegedly, the groups (who made up 75% of the anesthesiologists with active medical staff privileges at the hospital) agreed on a stipend that both groups would demand for taking call and discussed reducing the hours their participating doctors were available to take call to increase their negotiating power with the hospital, and prevented the hospital from negotiating separately with either group. The order, which expires in 20 years, prohibits the groups from entering into or facilitating such agreements and imposes reporting and record-keeping requirements.   

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