Kinnelon, NJ (PressExposure) July 07, 2009 -- New Jersey Assemblyman Joseph Cryan (D-20) has introduced three healthcare reform bills designed to protect consumers and reduce costs by limiting insurance carriersâ administrative expenses, streamlining insurance claims processing, and improving the way managed care companies evaluate and rate physicians.
Together, the bills represent a significant step towards keeping health insurance companies honest and reducing the amount of waste in the system, said NJ Physicians, ([http://www.njphysicians.com]) a statewide organization of medical doctors that pushed for the legislation.
âThese measures would put New Jersey in the forefront when it comes to protecting patients and containing spiraling healthcare costs,â said NJ Physicians President Ronald A. White, MD, JD. âInadequate regulation of the health insurance industry undermines confidence in our healthcare system and ultimately threatens the quality of care patients receive. Health insurance dollars must be spent on healthcare, not on bloated bureaucracies and exorbitant executive bonuses.â
--Transparency-- One bill, A-4162, known as the Transparency Bill, would require greater financial disclosure by the health insurance industry and require an 85 percent loss ratio for carriers providing large-group health insurance plans.
A âloss ratioâ is the percentage of premiums collected that are paid out in claims. An 85 percent loss ratio, therefore, would require 85 cents paid in claims for every premium dollar collected. The 80 percent loss ratio currently required for carriers providing individual or small-group health insurance plans would remain in effect.
All carriers would be required, under the bill, to provide an annual report to the Department of Banking and Insurance (DOBI) showing the amount of premiums collected, total claims paid, and administrative expenses for the previous calendar year.
The bill would also require a detailed breakdown of the administrative expenses to show the amounts paid for:
â¢ Executive salaries and benefits; â¢ Commissions and other fees paid to brokers or agents; â¢ Utilization and other benefits management; â¢ Advertising and marketing; â¢ Insurance, including reinsurance, general liability, and professional liability policies; â¢ Taxes, including insurance premium, payroll and property taxes; â¢ Travel and entertainment; â¢ Lobbying, both state and federal; and â¢ All other expenses, including, but not limited to, non-executive salaries, wages and benefits; real estate costs; certification, accreditation, board, bureau, and association fees; regulatory authority licenses and fees; and investment expenses.
DOBI would be required make each carrierâs annual report available to the public through its official Web site and, upon request, in hard copy.
--Physician Profiling-- Another bill, A-4163, would regulate âphysician profiling,â the practice of evaluating or ranking physicians or medical practices by the quality and cost-effectiveness of the care they provide.
Profiling programs in several places around the country have faced criticism due to questions about the accuracy and relevance of the data used to evaluate physicians and suspicion that the ratings weigh cost over quality of care.
The bill introduced by Assemblyman Cryan would require the state Division of Consumer Affairs â in consultation with the state Board of Medical Examiners â to contract with an independent oversight entity to monitor the profiling programs.
Under terms of the bill, criteria to evaluate physiciansâ performance would have to be based on quality, in addition to cost-effectiveness, and be developed in collaboration with physicians and their professional organizations.
When evaluating both quality and cost-effectiveness, the program must ensure that: data used is accurate, current, and includes an adequate sample size to be statistically valid; patient preference is respected, and that providersâ ratings are not affected when patients choose not to comply with a physicianâs referral, treatment recommendation, or plan of care; and the performance measures do not create a disincentive for physicians to provide preventive care or treat sicker, economically underprivileged, or minority patients.
The bill would require each profiling program to provide patients with an explanation of the performance measures used and to disclose any limitations in the data and the statistical likelihood that the ratings are accurate. Carriers also would be required to tell patients how a rating might affect their doctorsâ status with their provider network and how to file complaints with the independent oversight entity.
In addition, profiling programs would be required to disclose their evaluation criteria to physicians, share the data used in the evaluations, and give physicians opportunities to correct data, submit additional information for consideration, or challenge ratings before they are publicly disclosed or used in any way.
--Administrative Simplification-- The third bill, A-4161, would standardize forms and identification cards to streamline patient care and reduce administrative costs. The bill also would create a Health Care Patient Ombudsperson to protect consumersâ interests.
The New Jersey Medical Group Management Association, a professional association for medical professionals and a major advocate for the legislation, estimates that the typical medical practice spends $25,000 annually on wasteful, redundant administrative tasks.
To address that waste, the bill would require creation of universal contract forms and mandate health plans to issue identification cards with standard coverage information either legibly printed or embedded â as with a magnetic strip â directly on the card.
The new Health Care Patient Ombudsperson would be appointed by, and serve at the pleasure of, the Public Advocate. The Ombudsperson would assume all functions and powers of the Health Care Consumer Assistance Program, which currently exists within the DOBI, Office of Insurance Claims Ombudsman.
The Ombudsperson would coordinate its efforts with the divisions of Mental Health Advocacy and Advocacy for the Developmentally Disabled, which are also within the Department of the Public Advocate.
Other organizations joining in support of the bills include the New Jersey Medical Group Management Association, the New Jersey Hospital Association, New Jersey Citizen Action and the New Jersey Academy of Family Practitioners.
Press Contact: John Patella NJ Physicians Kinnelon, NJ 07405 609-395-1474 firstname.lastname@example.org [http://www.njphysicians.com]