BULLETIN NO. 02-12

N.J.A.C. 11:22 establishes the Department of Banking and Insurance (Department) standards for the prompt payment of claims relating to medical, hospital and health service corporations, individuals and group health insurers, health maintenance organizations, dental service corporations, dental plan organizations and prepaid prescription service organizations, and any subsidiary of any of those entities that processes health care benefit claims as a third party administrator in New Jersey.

N.J.A.C. 11:22-1.9 contains requirements for carriers to file certain reports with the Department relating to the prompt payment of claims. On February 15, 2002, the Department issued Bulletin 02-07 clarifying these reporting requirements based on inquiries received regarding the application of these rules. This Bulletin provides additional guidance on the preparation and submission of the report required by N.J.A.C. 11:22-1.9(b).

N.J.A.C. 11:22-1.9(a) requires that a carrier report to the Department on a quarterly basis the timeliness of claims payments (Appendix A Report) and on an annual basis the reasons for denial and late payment of claims. (Appendix B Report). N.J.A.C. 11:22-1.9(b) requires that the annual report (Appendix B) be audited. Bulletin 02-07 provided that the report of the auditing firm may be filed with the Department on or before May 31, 2002.

The purpose of this Bulletin is to elaborate on the reporting requirements for Appendix A and Appendix B:

• The report of the auditing firm is separate from the Appendix A and Appendix B reports filed by the carriers. The report of the auditing firm is accompanied by the annual report on the reasons for denial and late payment of claims (Appendix B report). A report of the auditing firm is not required for the quarterly report on timeliness of claims payment (Appendix A Report).
• The May 31, 2002 due date for the report of the auditing firm established by Bulletin 02-07 is hereby extended to July 1, 2002. This filing shall consist of the annual report (Appendix B), whether or not previously filed, and the report of the auditing firm. The filing shall indicate (in the cover letter or other transmittal document) whether the annual report (Appendix B) is (1) identical to a report previously filed; (2) an amendment to a report previously filed; or (3) the first such report filed.
• A Statement of Position 02-1, "Performing Agreed Upon Procedures Engagements that Address Annual Claims Prompt Payment Reports as Required by the New Jersey Administrative Code" satisfies the requirements of N.J.A.C. 11:22-1.9(b). SOP 02-01 is available from the American Institute of Certified Public Accountants, and may be obtained by calling 1-888-777-7077 and ordering product number 014934. The SOP also may be ordered by sending a fax to 1-800-362-5066, or on-line at http://www.cpa2biz.com
• N.J.A.C. 11:22-1.9(b) requires that copies of the annual report (Appendix B), accompanied by the report of the auditing firm, be sent to the Governor and the majority and minority offices of the Legislature. This requirement may be met by submitting three additional copies (a total of four copies) to the Department for subsequent transmission.
• A request for an extension of time to file the report of the auditing firm required by N.J.A.C. 11:22-1.9(b) shall be made by the carrier on or before July 1, 2002. The request shall include the following: the reason for the request; the date by which the report will be filed; and the name, address, telephone number, FAX number and e-mail address of the person to be contacted concerning the request. The Department cannot consider telephone or e-mail extension requests. FAX requests shall be sent to 609-633-0527, Attn.: Prompt Pay Reports.
• Requests for additional information and clarifications may be sent by FAX to (609)-633-0527 Attn. Prompt Pay Reports. The telephone number for questions regarding this Bulletin is 609-292-5427 Ext. 50340.