New Jersey Plans HMO Regulations

The New Jersey state legislature's two health committees have approveda bill to strengthen regulations on Health Maintenance Organizations which took effect on March 15, and also extend those protections to other types of insurance plans such as point-of-service and preferred provider programs.

The Health Care Quality Act would: create a new state appeals board to deal with patients or doctors who challenge managed care decisions; raise the fines the state Health Department can levy for some violations; require HMOs to allow customers the option of going outside the provider network, if they pay extra for it; and ban HMOs from offering doctors financial incentives to limit care. The bill now goes to the Legislature for a vote.

The new HMO regulations taking effect March 15 guarantee consumers a choice of specialists and the right to know how an insurer pays its doctors, sets up an appeals process for rejected claims and does away with gag rules. Under the new rules, the Health Department will produce a series of HMO report cards.