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Singer Bill to Prohibit Sudden Medicaid Reimbursement Decreases Clears Senate

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Senator Robert Singer’s bill to prohibit unauthorized provider reimbursement rate decreases by Medicaid, NJ FamilyCare and other managed care organizations was passed Thursday by the full Senate.

“Vulnerable patients should not be blindsided with higher health care costs,” said Singer (R-Monmouth, Ocean). “Managed care organizations must explore all other options before seeking to decrease provider benefits via a rigorous public process.”

Senator Singer’s S-2241 prohibits Medicaid managed care organizations from reducing provider reimbursement rates without approval from the Department of Human Services (DHS).

In order to reduce reimbursement rates to a category of providers, an HMO would be required to demonstrate that it has taken all appropriate actions to otherwise reduce the cost of providing benefits, demonstrate that the proposed reduction will not adversely impact the quality and accessibility of health care services it provides, and comply with any other requirements established by the DHS commissioner. The bill further requires that a public hearing be held on a proposed rate reduction at least 30 days after receipt of the application by the HMO but before a decision on whether a proposed rate reduction is to be approved.

In November, the Senate Budget and Appropriations Committee amended S-2241 to clarify that it applies to participating providers regulated by the Department of Human Services and the Department of Health, including, but not limited to, pediatric and adult day health care facilities, hospitals, nursing homes, rehabilitation centers, intermediate care facilities, clinics, home health care agencies, and laboratories, as well as providers of personal care assistance services provided through health care service firms.

The impetus for S-2241 was a recent announcement by Horizon NJ Health that it would be cutting provider reimbursement rates for Personal Care Assistance services (i.e. in home health aides – primarily for high needs children and elderly patients). It awaits action by the state Assembly.

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