Establishes Medicaid Managed Care Organization Oversight Program.

A4244

ASSEMBLY, No. 4244

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED FEBRUARY 19, 2026

Sponsored by:

Assemblywoman� SHANIQUE SPEIGHT

District 29 (Essex and Hudson)

SYNOPSIS

���� Establishes Medicaid Managed Care Organization
Oversight Program.

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act
concerning Medicaid and NJ FamilyCare and supplementing
Title 30 of the Revised Statutes.

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1.��� The Legislature finds
and declares that:

���� a.���� In 2011, the
administration of health care benefits for a majority of individuals who
receive health care through the Medicaid and NJ FamilyCare programs was shifted
from the Department of Human Services to managed care organizations (MCOs)
contracted with the Department of Human Services.

���� b.��� The Department of Human
Services currently contracts with five MCOs to provide quality health care and
needed medical services to individuals who are eligible for publicly subsidized
health insurance through the Medicaid and NJ FamilyCare programs.�

���� c.���� The contracts to
provide this care include multiple provisions to ensure that the care received
is of high quality, providers of care are accessible throughout the State, and
the MCOs are held accountable for meeting the terms of the contacts.

���� d.��� The Office of the State
Auditor conducted an audit of the Department of Human Services, Division of
Medical Assistance and Health Services, Medicaid Provider Networks for the
period July 1, 2013 to May 31, 2016 and determined that the MCOs did not provide
adequate access to: general acute care hospital service networks; dental
providers; and accurate online provider directories.� Additionally, the MCOs
were not adequately reporting providers� claims inactivity to the department
and had provider panel sizes which exceeded the eligible limits.

���� e.���� The audit recommended
that the department take certain actions to ensure that the MCOs are meeting
the contractual obligations regarding access to care and network adequacy.�

���� f.���� It is essential that
the Legislature act to ensure that the department takes action to provide
oversight of the MCOs to improve provision of care and network adequacy to
Medicaid and NJ FamilyCare enrollees.

���� 2.��� As used in this act:

���� �Beneficiary� means an
individual who has been determined eligible by the State for health benefits in
the Medicaid program pursuant to P.L.1968, c.413 (C.30:4D-1 et seq.) or the NJ
FamilyCare program pursuant to P.L.2005, c.156 (C.30:4J-8 et al.).

���� �Health benefits plan� means a
plan which pays or provides hospital and medical expense benefits for covered
services as defined by the MCO contractor.

���� �MCO contractor� means an
insurance company, health service corporation, hospital service corporation, or
health maintenance organization authorized to issue health benefits plans in
this State which has entered into a contract with the Department of Human
Services to provide health benefits for eligible persons under the Medicaid
program pursuant to P.L.1968, c.413 (C.30:4D-1 et seq.) or the NJ FamilyCare
program pursuant to P.L.2005, c.156 (C.30:4J-8 et al.).

���� �Provider� means an individual
or entity which, acting within the scope of its licensure or certification,
provides a covered service defined by the MCO contractor�s health benefits
plan.

���� 3.��� The Division of Medical
Assistance and Health Services in the Department of Human Services shall
establish a Medicaid Managed Care Organization (MCO) Oversight Program to
ensure the availability of accessible, quality, health care for individuals who
are enrolled in the NJ FamilyCare and Medicaid programs.

���� The Medicaid MCO Oversight
Program shall coordinate its efforts with the Medicaid Fraud Division,
established by the �Medicaid Program Integrity and Protection Act,� P.L.2007,
c.58 (C.30:4D-53 et seq.).

���� 4.��� a.� Each MCO contractor
shall submit updated provider data and beneficiary data on a quarterly basis to
the Medicaid MCO Oversight Program in a format designated by the Medicaid MCO
Oversight Program. The format in which the data is submitted to the Medicaid
MCO Oversight Program shall be consistent for each MCO contractor. The data
submitted shall include updated contact and location information for every
provider and every beneficiary.�

���� b.��� The Medicaid MCO
Oversight Program shall share any updated beneficiary information with county
welfare offices, or any other entity which is responsible for the enrollment or
re-enrollment of beneficiaries in the Medicaid or NJ FamilyCare program, to ensure
that these county welfare offices and other entities have the most current
beneficiary contact information.

���� c.���� The Medicaid MCO
Oversight Program shall establish an independent verification system to verify,
on an annual basis, the accuracy of the information provided to the program
from the MCO contractors, as follows:

���� (1)�� the Medicaid MCO
Oversight Program shall verify, at a minimum, that 20 percent of the provider
contact and location information provided pursuant to subsection a. of this
section is accurate; and

���� (2)�� the Medicaid MCO
Oversight Program shall verify, at a minimum, that 20 percent of the provider
contact and location information included in the MCOs� online directories is
accurate.

���� d.��� The Medicaid MCO
Oversight Program shall require, on an annual basis, the MCO contractors verify
that 100 percent of the providers listed in the MCOs� public directories are
eligible Medicaid providers.�

���� e.���� The Medicaid MCO
Oversight Program shall require, on an annual basis, the MCO contractors to
submit claims inactivity reports for all providers that meet the claims
inactivity criteria established by the Medicaid MCO Oversight Program for that
MCO contractor. The Medicaid MCO Oversight program shall require MCO
contractors to establish inactivity criteria for each provider specialty.

���� f.���� The Medicaid MCO
Oversight Program shall require, on an annual basis, the MCO contractors to
verify that the participating providers� panel sizes do not exceed criteria
established by the Medicaid MCO Oversight Program for that MCO contractor.� The
Medicaid MCO Oversight Program shall require panel size criteria for each
provider specialty to include all patients of the provider, notwithstanding the
patient�s health insurance carrier.

���� 5.��� a.� The Medicaid MCO
Oversight Program shall subject an MCO contractor who fails to submit
information as required pursuant to section 4 of P.L.���� c.���� (C.������ )
(pending before the Legislature as this bill) to a fine of no less than $50,000
for each failure to submit information.� The commissioner shall promulgate a
schedule of penalties to be applied pursuant to this section.�

���� b.��� If, after notice and a
hearing pursuant to the "Administrative Procedure Act," P.L.1968,
c.410 (C.52:14B-1 et seq.), an MCO contractor is found by the commissioner to
have failed to pay the fine pursuant to subsection a. of this section, the commissioner
may bar that MCO contractor from participating as an MCO contractor for a
period not to exceed five years.�

���� 6.��� a.� The Medicaid MCO
Oversight Program shall prepare an annual report, which shall be submitted to
the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1) no
later than April 1 of each calendar year.� The report shall contain the
information provided to the program by the MCO contractors pursuant to section
4 of P.L.���� c.���� (C.������ ) (pending before the Legislature as this bill),
and any fines imposed on, and fines collected from, the MCO contractors
pursuant to section 5 of P.L.���� c.���� (C.����� ) (pending before the
Legislature as this bill).�

���� b.��� Three years from the
enactment of P.L.���� c.���� (C.����� ) (pending before the Legislature as this
bill), the Office of State Auditor shall conduct a follow-up audit on MCO
provider networks.

���� 7.��� The Commissioner of
Human Services, pursuant to the �Administrative Procedure Act,� P.L.1968, c.410
(C.52:14B-1 et seq.), shall adopt rules and regulations as the
commissioner determines necessary to effectuate the purposes of this act.

���� 8.��� This act shall take
effect 180 days after the date of enactment, except the Commissioner of Human
Services may take any anticipatory administrative action in advance as shall be
necessary for the implementation of this act.�

STATEMENT

���� This bill would require the
Division of Medical Assistance and Health Services in the Department of Human
Services to establish a Medicaid Managed Care Organization (MCO) Oversight
Program to ensure the availability of accessible health care for individuals
who are enrolled in the NJ FamilyCare and Medicaid programs.

���� The Office of the State
Auditor conducted an audit of the Department of Human Services, Division of
Medical Assistance and Health Services, Medicaid Provider Networks for the
period July 1, 2013 to May 31, 2016.� Information from the audit indicated that�
managed care organizations (MCOs) which are contracted with the State to
provide health benefits to Medicaid and NJ FamilyCare beneficiaries did not
provide adequate access to: general acute care hospital service networks;
dental providers; and accurate online provider directories.� Additionally, the
MCOs were not adequately reporting claims inactivity for providers and had
provider panel sizes which exceeded the eligible limits. Furthermore, the audit
recommended that the department take certain actions to ensure that the MCOs
are meeting the contractual obligations regarding access to quality care and
provider availability.�

���� This bill requires each MCO
contractor to submit updated provider data and beneficiary data on a quarterly
basis to the Medicaid MCO Oversight Program in a format designated by the
Medicaid MCO Oversight Program. The submitted data will allow the Medicaid MCO
Oversight Program to accurately determine if the MCOs are providing adequate
network adequacy to the enrolled beneficiaries.

���� Additionally, the audit
disclosed that the MCOs are collecting updated beneficiary information but
there is no currently implemented mechanism to share this data with the
department. Without updated beneficiary information, the department is not able
to ensure network adequacy.

���� The updated beneficiary
information collected by the MCOs could also streamline the work of entities,
such as county welfare offices, which enroll individuals in Medicaid and NJ
FamilyCare. To ensure the sharing of information, this bill requires the Medicaid
MCO Oversight Program to share any updated beneficiary information with county
welfare offices, or any other entity which is responsible for the enrollment or
re-enrollment of beneficiaries in the Medicaid or NJ FamilyCare program.

���� The audit also determined that
the information in the MCOs� on-line directories containing eligible providers,
and these providers� locations, was not always accurate. Therefore, this bill
requires the Medicaid MCO Oversight Program to establish an independent
verification system to annually verify that at least 20 percent of the
information provided to the program from the MCO contractors is accurate and
that 100 percent of the providers listed are eligible Medicaid providers.

���� The audit also revealed that
there was a need for the MCOs to identify inactive providers. To rectify this
situation, the bill requires the MCO contractors to submit claims inactivity
reports for all providers that meet the claims inactivity criteria established
by the Medicaid MCO Oversight Program for that MCO contractor.

���� Additionally, the audit
disclosed that a small number of MCO contractors were listing providers as
�eligible� who had patient panel sizes that exceeded acceptable numbers. This
bill would require MCO contractors to verify that all of the participating
providers� panel sizes do not exceed criteria established by the Medicaid MCO
Oversight program for that MCO contractor.� The bill also requires the panel
size criteria for each provider specialty to include all patients of the
provider, notwithstanding the patient�s health insurance carrier.

���� It is unclear what sanctions
are currently being brought against MCO contractors that do not comply with the
current contracts. Consequences for not meeting the requirements of this bill
will be a minimum $50,000 fine for each failure to submit information as
required pursuant to the bill.� If, after an administrative hearing, the MCO
fails to pay the fine, the MCO may be barred from contracting with the
department for five years.

���� Lastly, the bill requires an
annual report containing the information provided to the program from the MCOs
no later than 90 days from the first day of the calendar year.� To evaluate
longer term changes, the bill requires the Office of State Auditor to conduct a
follow up audit on MCO provider networks three years after enactment.