ASSEMBLY, No. 2866

STATE OF NEW JERSEY

217th LEGISLATURE

 

INTRODUCED FEBRUARY 16, 2016

 


 

Sponsored by:

Assemblyman  TROY SINGLETON

District 7 (Burlington)

 

 

 

 

SYNOPSIS

     "Health Care Consumer Cost Transparency Act."

 

CURRENT VERSION OF TEXT

     As introduced.

  


An Act establishing the New Jersey Healthcare Price Index and supplementing Title 17B of the New Jersey Statutes.

 

     Be It Enactedby the Senate and General Assembly of the State of New Jersey:

 

     1.    This act shall be known and may be cited as the "Health Care Consumer Cost Transparency Act."

 

     2.    As used in this act:

     "Board" means the New Jersey Healthcare Price Index Advisory Board established pursuant to section 3 of this act.

     "Carrier" means an entity that contracts or offers to contract to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services under a health benefits plan, including: an insurance company authorized to issue health benefits plans; a health maintenance organization; a health, hospital, or medical service corporation; a multiple employer welfare arrangement; an entity under contract with the State Health Benefits Program and the School Employees' Health Benefits Program to administer a health benefits plan; or any other entity providing a health benefits plan.

     "Commissioner" means the Commissioner of Banking and Insurance.

     "Covered person" means a person on whose behalf a carrier is obligated to pay health care expense benefits or provide health care services.

     "Department" means the Department of Banking and Insurance.

     "Health benefits plan" means a benefits plan which pays or provides hospital, pharmaceutical or medical expense benefits for covered services, and is delivered or issued for delivery in this State by or through a carrier.  For the purposes of this act, "health benefits plan" shall not include the following plans, policies or contracts: Medicaid, Medicare Advantage, accident only, credit, disability, long-term care, TRICARE supplement coverage, coverage arising out of a workers' compensation or similar law, automobile medical payment insurance, personal injury protection insurance issued pursuant to P.L.1972, c.70 (C.39:6A-1 et seq.), and hospital confinement indemnity coverage.

     "Health care data" means data from a carrier relating to the provision, financing, and administration of health care, as applicable. Health care data shall include, but not be limited to, information regarding: medical, pharmacy, and behavioral health claims; health care utilization; health care safety and quality; health outcomes; health care providers; and costs.

     "Health care provider" or "provider" means a health care professional or health care facility.

     "Index" or "HPI" means the Healthcare Price Index system established pursuant to this act.

     "Medicaid" means the State Medicaid program established pursuant to P.L.1968, c.413 (C.30:4D-1 et seq.).

     "Medicare" means the federal Medicare program established pursuant to Pub.L.89-97 (42 U.S.C. s.1395 et seq.).

     "Reporting entity" means an employer who provides a self-funded health benefits plan to their employees, or an entity that administers that plan on behalf of the employer. 

 

     3.    a.  The commissioner shall establish a New Jersey Healthcare Price Index Advisory Board to provide input into the development of the index and continuing oversight of its operation.

     b.    The board shall consist of 11 members as follows:

     (1)   the Commissioners of Health and Human Services and the State Treasurer, or their designees, as ex officio members; and

     (2)   eight public members, to be appointed by the commissioner and who are residents of this State, including:

     (a)   one member representing consumer health care advocacy;

     (b)   one member representing employers, who is recommended by the New Jersey Business and Industry Association;

     (c)   two members representing carriers, who are recommended by the New Jersey Association of Health Plans;

     (d)   two members representing hospitals, who are recommended by the New Jersey Hospital Association; and

     (e)   two members representing the physician community, who are recommended by the Medical Society of New Jersey.

     c.     The public members of the board shall serve without compensation but shall be reimbursed for any expenses incurred by them in the performance of their duties.

     d.    The public members of the board shall serve for a term of four years, except that of the public members first appointed, three shall serve for a term of four years, three shall serve for a term of three years, and two shall serve for a term of two years.

     e.     Each public member of the board shall hold office for the term of his appointment and until his successor has been appointed.  Vacancies shall be filled in the same manner as the original appointments were made.  A member is eligible for reappointment.

     f.     The board shall organize as soon as practicable after the appointment of its members, but no later than three months after the effective date of this act, and shall select a chairperson and vice-chairperson from among its membership.  The chairperson and vice-chairperson shall each serve two-year terms.

     g.    The department shall provide such staff and resources as the board requires to perform its duties pursuant to this act.

     h.    The commissioner, with the advice of the board, shall appoint an executive director of the index to supervise the administrative affairs and general management and operations of the index.

     i.     All meetings of the board shall be subject to the requirements of the "Senator Byron M. Baer Open Public Meetings Act," P.L.1975, c.231 (C.10:4-6 et seq.).  In addition to complying with the notice requirements of P.L.1975, c.231, the board shall provide electronic notice of its meetings as defined in section 1 of P.L.2002, c.91 (C.10:4-9.1).

     j.     A member of the board shall not be liable in an action for damages to any person for any action taken or recommendation made by the member within the scope of his functions as a member, if the action or recommendation was taken or made without malice.  The members of the board shall be indemnified and their defense of any action provided for in the same manner and to the same extent as employees of the State under the "New Jersey Tort Claims Act," P.L.1972, c.45 (C.59:1-1 et seq.), on account of acts or omissions in the scope of their service.

 

     4.    a.  The Commissioner of Banking and Insurance, in consultation with the board, shall select an organization, after public advertisement for bids therefor, to maintain a Healthcare Price Index, in accordance with the terms of a written agreement which shall be entered into between the department and the organization, as further described in this act.  The commissioner shall select an organization that possesses the capabilities to develop and implement policies and procedures for the collection, processing, storage, protection, management and analysis of health care data in accordance with this act.  The organization, at the commissioner's direction, shall:

     (1)   collect the health care data from the carriers, and reporting entities that choose to provide health care data

     (2)   if directed by the commissioner, incorporate other health care data sets such as Medicaid, Medicare or Hospital Discharge Data with the data collected and held by the organization;

     (3)   determine the standards and methods necessary for collecting health care data in a manner that minimizes the cost and administrative burden on carriers and utilizes uniform reporting systems for the collection of data on a scheduled basis;

     (4)   comply with the applicable provisions of the federal health privacy rule set forth in sections 160 and 164 of Title 45, Code of Federal Regulations, and with other proprietary requirements related to the collection and release of health care data; and

     (5)   allow access to state entities and not for profit researchers that execute data use agreements with the department, which agreement shall be subject to review and approval by the commissioner, to utilize the non-proprietary portions of the index to measure trends and identify outliers within the State health care system related to: health care safety and quality; health care utilization; health outcomes; costs; efficiency and other areas in the public interest as identified by the commissioner.

     b.    The commissioner may solicit, receive, and accept grants, funds, or anything of value from any public or private entity and receive and accept fees or contributions of money, property, labor, or any other thing of value from any legitimate source to support the operation of the index, provided that: (1) the commissioner does not have reason to believe that the entity may have a vested interest in the decisions of the commissioner or the organization concerning the operation of the index; and (2) any funds received are disclosed on the department's website. 

     c.     The purpose of the index shall be to serve as a source for useful, objective, reliable, and comprehensive health information designed to make health care data available to the State and to researchers to improve health care quality, reduce health care costs, and increase pricing transparency.

     d.    Carriers shall file that health care data determined by the commissioner to be necessary to carry out the purposes of this act. The form, medium, content, and frequency of the reporting shall be established by the commissioner but shall be reported not less than annually.  Upon request by the commissioner, carriers shall, and reporting entities may, report 2014 data to the department to be shared with the organization to effectuate the purposes of this act as soon as practicable upon the effective date of this act. 

     e.     Each carrier shall, and reporting entities may, submit a completed health care claims data set for all covered persons who are New Jersey residents in accordance with the requirements of this section. Each carrier shall also be responsible for the submission of health care claims processed by any subcontractor on its behalf. The health care claims data set to be reported shall include, but not be limited to, the following files, as applicable: a medical claims file; a pharmacy claims file; a behavioral health claims file; a provider file; and a covered person eligibility file containing records associated with each of the claims files reported.  The completed health care claims data set shall also include, but not be limited to, a record of all claims, including the amount billed for by the provider and the amount paid by the carrier for which information is submitted to the commissioner by carriers pursuant to sections 5 and 6 of P.L.1999, c.155 (C.17B:30-30 and 17B:30-31).

 

     5.    a.  The agreement between the department and the organization shall specify the form, medium, content, and frequency of reporting of the health care data to the organization by carriers, and when applicable reporting entities, as determined by the commissioner to be necessary to effectuate the purposes of this act. 

     b.    The agreement between the department and the organization shall require the organization to submit sufficient information about the index and its use to enable the department to produce reports utilizing the data contained within the index, as the commissioner determines to be in furtherance of the purposes of this act.

     c.     The department shall, within 30 days of the date of enactment of this act, select a data storage contractor.  The data storage contractor shall: (1) house and ensure the security of the data collected pursuant to this act; and (2) identify the format in which the data should be collected and analyzed to effectuate the purposes of this act.  The data storage contractor shall be either: (1) an existing State entity that has the capacity to store and secure the data; or (2) selected pursuant to an existing State contract for data warehousing.

 

     6.    a.  There is established in the Department of the Treasury a nonlapsing revolving fund to be known as the "Healthcare Price Index Trust Fund."  This fund shall be the repository for monies collected pursuant to subsection c. of this section and other monies received as grants or otherwise appropriated for the purposes of the index.  The monies in the fund shall be used only to pay for administrative and operational expenses that the department incurs in order to carry out its responsibilities pursuant to this act, including funding the organization pursuant to the agreement between the department and the organization, and shall be specifically dedicated and utilized exclusively for this purpose.

     b.    The State Treasurer shall be the custodian of the fund, and all disbursements from the fund shall be made by the State Treasurer upon vouchers signed by the commissioner or the commissioner's designee.  The monies in the fund shall be invested and reinvested by the Director of the Division of Investment in the Department of the Treasury as are other trust funds in the custody of the State Treasurer in the manner provided by law.  Interest received on the monies in the fund shall be credited to the fund.

     c.     (1)   The commissioner shall apply, and periodically revise as necessary, an annual surcharge to all health benefits plans, or to any third party administrators administering a health benefit plan, in the State, on a pro rata basis according to the number of covered persons in each health benefits plan, as the commissioner determines necessary to effectuate the purposes of this act.

     (2)   Any surcharges or assessments applied by the commissioner pursuant to paragraph (1) of this subsection shall not be fixed at a level that would generate revenue in excess of amounts necessary to effectuate the purposes of this act.

     (3)   The department and organization may charge a reasonable user fee to state entities and not for profit researchers for the right to access and use the data contained within the index; however, the fee may be reduced or waived for users that demonstrate a plan to use the data in research of general value to the public health or an inability to pay the scheduled fee, as provided in rules to be adopted by the commissioner.

     (4)   The department or organization may provide technical assistance to other public or private entities, for a fee, utilizing data released for the purposes of the index.

     (5)   The proceeds collected pursuant to this subsection shall be deposited into the fund.

     (6)   Information concerning monies collected pursuant to this subsection, including other monies received as grants or otherwise appropriated for the purposes of the index, and any fees collected for the right to access and use the data contained within the index, shall be disclosed and made available on the department website.  The information shall be updated at least every 60 days.

 

     7.    A person or entity that violates any provision of this act, or the rules and regulations adopted pursuant hereto, shall be liable to a penalty as provided in this section.  The penalty shall be collected by the commissioner in the name of the State in a summary proceeding in accordance with the "Penalty Enforcement Law of 1999," P.L.1999, c.274 (C.2A:58-10 et seq.).

     a.     A carrier that violates any provision of this act shall be liable to a penalty of not more than $1,000 for each violation.  Every day upon which a violation occurs shall be considered a separate violation, but no carrier shall be liable to a penalty greater than $25,000 for each occurrence. 

     b.    In addition to any other existing penalties for such acts, a person or entity that receives data under the terms and conditions of this act and intentionally or knowingly uses, sells, or transfers the data for commercial advantage, pecuniary gain, personal gain, or malicious harm, in violation of rules which the commissioner shall adopt, shall be liable to a penalty of not more than $500,000 for each violation.

 

     8.    a.  No later than one year after the effective date of this act, and on an annual basis thereafter, the commissioner shall submit a report to the Governor, and to the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), analyzing health care cost trends across the State.  The report shall be prominently displayed on the department website at the same time.

     b.    The reports issued pursuant to this section: shall utilize health care data collected by the index, as available; may utilize applicable health care data from other sources, pending implementation of the Healthcare Price Index or as otherwise necessary; and shall not release any information specifically identifying a patient, provider, reporting entity, or carrier.  The collection, storage, and release of health care data and other information within reports issued pursuant to this section shall be subject to the provisions of the federal health privacy rule set forth in sections 160 and 164 of Title 45, Code of Federal Regulations.

 

     9.    The Commissioner of Banking and Insurance shall adopt rules and regulations, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), in order to effectuate the purposes of this act.

 

     10.  This act shall take effect on the first day of seventh month after enactment.  The Commissioner of Banking and Insurance may take such anticipatory administrative action in advance thereof as shall be necessary for the implementation of this act.

 

 

STATEMENT

 

     The "Health Care Consumer Cost Transparency Act," establishes a Healthcare Price Index (HPI) to serve as a useful, objective, reliable, and comprehensive health information index that is designed to make health care data available to the State and to not for profit researchers to improve health care quality, reduce health care costs, and increase pricing transparency. 

     The bill requires the Commissioner of Banking and Insurance (commissioner)  to establish a New Jersey Healthcare Price Index Advisory Board (board), to provide input into the development of the index and continuing oversight of its operations, and appoint an executive director to supervise the general management of the index.

     The bill requires that the Commissioner of Banking and Insurance, in consultation with the board, shall select, after public advertisement for bids therefor, an organization to maintain the HPI in accordance with the terms of a written agreement, which shall be entered into between the department and the organization.  The commissioner is required to select an organization that possesses the capabilities to develop and implement policies and procedures for the collection, processing, storage, protection, management and analysis of health care data in accordance with the provisions of the bill.

     The bill requires carriers, and allows self-insured employers, to file such health care data determined by the commissioner to be necessary to carry out the purposes of the bill.  Under the provisions of the bill, the form, medium, content, and frequency of the reporting is to be established by the commissioner but shall be reported at least annually.

     The bill provides that the agreement between the department and the organization shall require the organization to submit sufficient information about the index and its use to enable the department to produce reports utilizing the data contained within the index, as the commissioner determines to be in furtherance of the purposes of the bill.

     The bill requires the department, within 30 days of the date of enactment of the bill, to select a data storage contractor.  The data storage contractor shall: (1) house and ensure the security of the data collected pursuant to the bill; and (2) identify the format in which the data should be collected and analyzed to effectuate the purposes of the bill.  The data storage contractor shall be either: (1) an existing State entity that has the capacity to store and secure the data; or (2) selected pursuant to an existing State contract for data warehousing.

     The bill also establishes in the Department of the Treasury a nonlapsing revolving fund to be known as the "Healthcare Price Index Trust Fund."  This fund shall be the repository for monies collected pursuant to the provisions of the bill and other monies received as grants or otherwise appropriated for the purposes of the index.  As provided by the bill,  the monies in the fund shall be used only to pay for administrative and operational expenses that the department incurs in order to carry out its responsibilities, including funding the organization pursuant to the agreement between the department and the organization, and shall be specifically dedicated and utilized exclusively for this purpose.

     The bill provides that the State Treasurer shall be the custodian of the fund, and all disbursements from the fund shall be made by the State Treasurer upon vouchers signed by the commissioner or the commissioner's designee. 

     Under the bill, the commissioner is to apply, and periodically revise as necessary, an annual surcharge to all health benefits plans, or to any third party administrators administering a health benefit plan, in the State, on a pro rata basis according to the number of covered persons in each health benefits plan, as the commissioner determines necessary to effectuate the purposes of the bill.  The assessment shall not be fixed at a level that would generate revenue in excess of amounts necessary to effectuate the purposes of the bill.

     The bill also permits the department and organization to charge a reasonable user fee to state entities and not for profit researchers for the right to access and use the data contained within the index; however, the fee may be reduced or waived for users that demonstrate a plan to use the data in research of general value to the public health or an inability to pay the scheduled fee, as provided in rules to be adopted by the commissioner.

     The bill also provides for penalties of not more than $1,000 for each violation if a carrier violates any provision of the bill.  Every day on which a violation occurs is to be considered a separate violation, but no carrier shall be liable for payment of a penalty greater than $25,000 for each occurrence. 

     The bill also provides that, in addition to any other existing penalties for such acts, a person or entity that receives data under the terms and conditions of the bill and intentionally or knowingly uses, sells, or transfers the data for commercial advantage, pecuniary gain, personal gain, or malicious harm shall be liable for payment of a penalty of not more than $500,000 for each violation.

     Finally, the bill requires the commissioner to submit annual reports to the Governor and Legislature analyzing health care cost trends across the State, which shall be prominently displayed on the department website.