NEW JERSEY STATUTES ANNOTATED
TITLE 26. HEALTH AND VITAL STATISTICS
CHAPTER 2J. HEALTH MAINTENANCE ORGANIZATIONS

26:2J-8.1. Health maintenance organizations; implementation of electronic receipt and transmission of claim information

a. Within 180 days of the adoption of a timetable for implementation pursuant to section 1 of P.L.1999, c. 154 (C.17B:30-23), a health maintenance organization, or a subsidiary that processes health care benefits claims as a third party administrator, shall demonstrate to the satisfaction of the Commissioner of Banking and Insurance that it will adopt and implement all of the standards to receive and transmit health care transactions electronically, according to the corresponding timetable, and otherwise comply with the provisions of this section, as a condition of its continued authorization to do business in this State. The Commissioner of Banking and Insurance may grant extensions or waivers of the implementation requirement when it has been demonstrated to the commissioner's satisfaction that compliance with the timetable for implementation will result in an undue hardship to a health maintenance organization, its subsidiary or its covered enrollees.

b. Within 12 months of the adoption of regulations establishing standard health care enrollment and claim forms by the Commissioner of Banking and Insurance pursuant to section 1 of P.L.1999, c. 154 (C.17B:30-23), a health maintenance organization or a subsidiary that processes health care benefits claims as a third party administrator shall use the standard health care
enrollment and claim forms in connection with all group and individual health maintenance organization coverage for health care services issued, delivered, executed or renewed in this State.

c. Twelve months after the adoption of regulations establishing standard health care enrollment and claim forms by the Commissioner of Banking and Insurance pursuant to section 1 of P.L.1999, c. 154 (C.17B:30-23), a health maintenance organization shall require that health care providers file all claims for payment for health care services. A covered person who receives health care services shall not be required to submit a claim for payment, but notwithstanding the provisions of this subsection to the contrary, a covered person shall be permitted to submit a claim on his own behalf, at the covered person's option. All claims shall be filed using the standard health care claim form applicable to the contract.

d. (1) Effective 180 days after the effective date of P.L.1999, c. 154, a health maintenance organization or its agent, hereinafter the payer, shall remit payment for every insured claim submitted by an enrollee or that enrollee's agent or assignee if the health maintenance organization coverage for health care services provides for assignment of benefits, no later than the 30th calendar day following receipt of the claim by the payer or no later than the time limit established for the payment of claims in the Medicare program pursuant to 42 U.S.C.s.1395u(c)(2)(B), whichever is earlier, if the claim is submitted by electronic means, and no later than the 40th calendar day following receipt if the claim is submitted by other than electronic means, if:
(a) the claim is an eligible claim for a health care service provided by an eligible health care provider to a covered person under the health maintenance organization coverage for health care services;
(b) the claim has no material defect or impropriety, including, but not limited to, any lack of required substantiating documentation or incorrect coding;
(c) there is no dispute regarding the amount claimed;
(d) the payer has no reason to believe that the claim has been submitted fraudulently; and
(e) the claim requires no special treatment that prevents timely payments from being made on the claim under the terms of the
health maintenance organization coverage for health care services.
(2) If all or a portion of the claim is denied by the payer because:
(a) the claim is an ineligible claim;
(b) the claim submission is incomplete because the required substantiating documentation has not been submitted to the payer;
(c) the diagnosis coding, procedure coding, or any other required information to be submitted with the claim is incorrect;
(d) the payer disputes the amount claimed; or
(e) the claim requires special treatment that prevents timely payments from being made on the claim under the terms of the health maintenance organization coverage for health care services, the payer shall notify the enrollee, or that enrollee's agent or assignee if the health maintenance organization coverage for health care services provides for assignment of benefits, in writing or by electronic means, as appropriate, within 30 days, of the following: if all or a portion of the claim is denied, all the reasons for the denial; if the claim lacks the required substantiating documentation, including incorrect coding, a statement as to what substantiating documentation or other information is required to complete adjudication of the claim; if the amount of the claim is disputed, a statement that it is disputed; and if the claim requires special treatment that prevents timely payments from being made, a statement of the special treatment to which the claim is subject.
(3) Any portion of a claim that meets the criteria established in paragraph (1) of this subsection shall be paid by the payer in accordance with the time limit established in paragraph (1) of this subsection.
(4) A payer shall acknowledge receipt of a claim submitted by electronic means from a health care provider or enrollee, no later than two working days following receipt of the transmission of the claim.
(5) If a payer subject to the provisions of P.L.1983, c. 320 (C.17:33A-1 et seq.) has reason to believe that a claim has been submitted fraudulently, it shall investigate the claim in accordance with its fraud prevention plan established pursuant to section 1 of P.L.1993, c. 362 (C.17:33A-15), or refer the claim, together with supporting documentation, to the Office of the Insurance Fraud Prosecutor in the Department of Law and Public Safety established pursuant to section 32 of P.L.1998, c. 21 (C.17:33A-16).
(6) Payment of an eligible claim pursuant to paragraphs (1) and (3) of this subsection shall be deemed to be overdue if not remitted to the claimant or his agent by the payer on or before the 30th calendar day or the time limit established by the Medicare program, whichever is earlier, following receipt by the payer of a claim submitted by electronic means and on or before the 40th calendar day following receipt of a claim submitted by other than electronic means. In the event payment is withheld on all or a portion of a claim by a payer pursuant to subparagraph (b) of paragraph (2) of this subsection, the claims payment shall be overdue if not remitted to the claimant or his agent by the payer on or before the 30th calendar day or the time limit established by the Medicare program, whichever is earlier, for claims submitted by electronic means and the 40th calendar day for claims submitted by other than electronic means, following receipt by the payer of the required documentation or modification of an initial submission.
(7) An overdue payment shall bear simple interest at the rate of 10% per annum.
e. As used in this subsection, "insured claim" or "claim" means a claim by an enrollee for payment of benefits under an insured health maintenance organization contract for which the financial obligation for the payment of a claim under the health maintenance organization coverage for health care services rests upon the health maintenance organization.