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A238
ASSEMBLY, No. 238
STATE OF NEW JERSEY
222nd LEGISLATURE
�
PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION
Sponsored by:
Assemblyman JOHN V. AZZARITI JR., M.D.
District 39 (Bergen)
SYNOPSIS
���� Prohibits downcoding in health insurance claims.
CURRENT VERSION OF TEXT
���� Introduced Pending Technical Review by Legislative
Counsel.
��
An Act
concerning downcoding in reimbursement of health
insurance claims and supplementing N.J.S.17B:30-1 et seq.
����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:
���� 1.��� a.� Notwithstanding the
provisions of any law, rule, or regulation to the contrary, no payer shall use
downcoding in a manner that prevents a health care provider from submitting a
health benefits claim for the actual service performed and collecting reimbursement
from the payer for that service.
���� b.��� The Department of
Banking and Insurance shall adopt regulations, pursuant to the
"Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.)
to effectuate the purposes of this act.
���� c.��� As used in this section:
���� "Carrier" means an
insurance company, health service corporation, hospital service corporation,
medical service corporation, or health maintenance organization authorized to
issue health benefits plans in this State.
���� "Covered person"
means a person on whose behalf a carrier offering a health benefits plan is
obligated to pay benefits or provide services pursuant to the health benefits
plan.
���� �Downcoding� means the
adjustment of a health benefits claim submitted to a payer to a less complex or
lower cost service in order to reimburse a provider in an amount less than is
required pursuant to the provider contract.� �Downcoding� includes, but is not
limited to, the use of remark codes.
���� "Health benefits
claim" means a claim by a covered person for payment of benefits under a
health benefits plan.
���� "Health
benefits plan" means a hospital and medical expense insurance policy;
health service corporation contract; hospital service corporation contract;
medical service corporation contract; health maintenance organization
subscriber contract; or other plan for medical care delivered or issued for
delivery in this State.
���� �Payer" means a carrier
or any agent thereof or an organized delivery system or any agent thereof that
is doing business in the State and is under a contractual obligation to pay
insured claims.
���� 2.��� This act shall take
effect on the 180th day next following the date of enactment.
STATEMENT
���� This bill prohibits a health
insurance claims payer from using downcoding in a manner that prevents a health
care provider from submitting a health benefits claim for the actual service
performed and collecting reimbursement from the payer for that service.� The
bill applies to health insurance carriers, organized delivery systems, or any
agents of a health insurance carrier or organized delivery system doing
business in New Jersey.
���� Downcoding refers to the
practice of adjusting health benefits claims submitted to a payer to a less
complex or lower cost service than the service actually performed so the payer
can reimburse a lower amount to the health care provider that submitted the
claim.� Downcoding may occur where a payer disputes a specific service or
contends that the diagnosis did not require the specific service code submitted
by the health care provider.� Excessive or routine downcoding can significantly
reduce revenue for health care providers.
���� Health care providers are
already subject to robust State laws concerning fraud relating to health
benefits claims.� These laws, including the �New Jersey False Claims Act,� the
�New Jersey Health Care Claims Fraud Act,� and the �New Jersey Insurance Fraud
Prevention Act,� penalize health care providers that submit fraudulent claims
to a payer.