52:14-17.46.5 Purchase of contracts providing benefits.

35. a. The commission shall negotiate with and arrange for the purchase, on such terms as it deems in the best interests of the State, participating employers and those persons covered hereunder from carriers licensed to operate in the State or in other jurisdictions, as appropriate, contracts providing benefits required by the School Employees' Health Benefits Program Act, as specified in section 36 of P.L.2007, c.103 (C.52:14-17.46.6), or such benefits as the commission may determine to provide, so long as such modification of benefits is in the best interests of the State, participating employers and those persons covered hereunder, and is consistent with the provisions of section 40 of that act (C.52:14-17.46.10). The commission shall have authority to execute all documents pertaining thereto for and on behalf of the State. The commission shall not enter into a contract under the School Employees' Health Benefits Program Act, unless the benefits provided thereunder are equal to or exceed the standards specified in section 36 of that act, or as such standards are modified pursuant to section 40 of that act.

b. The rates charged for any contract purchased under the authority of the School Employees' Health Benefits Program Act shall reasonably and equitably reflect the cost of the benefits provided based on principles which in the judgment of the commission are actuarially sound. The rates charged shall be determined based upon accepted group rating principles with due regard to the experience, both past and contemplated, under the contract. The commission shall have the right to particularize subgroups for experience purposes and rates. No increase in rates shall be retroactive.

c. The commission shall be authorized to accept an assignment of contract rights from or enter into an agreement, contract, memorandum of understanding or other terms with the State Health Benefits Commission to ensure that coverage for eligible employees, retirees and dependents under the School Employees' Health Benefits Program whose benefits had been provided through the State Health Benefits Program is continued without interruption. The transition provided for in this subsection shall occur within one year of the effective date of the School Employees' Health Benefits Program Act, sections 31 through 41 of P.L.2007, c.103 (C.52:14-17.46.1 through C.52:14-17.46.11).

d. Benefits under the contract or contracts purchased as authorized by the School Employees' Health Benefits Program Act may be subject to such limitations, exclusions, or waiting periods as the commission finds to be necessary or desirable to avoid inequity, unnecessary utilization, duplication of services or benefits otherwise available, including coverage afforded under the laws of the United States, such as the federal Medicare program, or for other reasons.

e. The initial term of any contract purchased by the commission under the authority of the School Employees' Health Benefits Program Act shall be for such period to which the commission and the carrier may agree, but permission may be made for automatic renewal in the absence of notice of termination by the commission. Subsequent terms for which any contract may be renewed as herein provided shall each be limited to a period not to exceed one year.

f. Any carrier with which the commission contracts for the provision of hospital, surgical, obstetrical, and other covered health care services and benefits pursuant to this section shall provide to the third-party medical claims reviewer, procured pursuant to section 2 of P.L.2019, c.143 (C.52:14-17.30b), information in that carrier's provider network contracts, such as claims information and contractual discounts provided thereunder, that are applicable to a health benefits plan offered under the School Employees' Health Benefits Program.

Documents, materials and other information in the possession or control of the State, or the third-party medical claims reviewer, that are obtained or created by, or disclosed to, the State or any other person pursuant to this subsection shall be recognized by this State as being proprietary and containing trade secrets. All such documents, materials or other information shall be confidential by law and privileged, and shall not be subject to P.L.1963, c.71 (C.47:1A-1 et seq.); except that the State is authorized to use the documents, materials or other information in the furtherance of any regulatory or legal action brought as a part of the commission's or third-party medical claims reviewer's official duties. The State and the third-party medical claims reviewer shall not disclose, sell, or transfer the documents, materials or other information without the prior written consent of the carrier. This subsection shall not be construed as pertaining to medical claims data.

g. A contract entered into with a carrier pursuant to this section shall include therein the State's existing right to withhold payment for administrative services or to pursue any other remedy deemed appropriate by the State Treasurer if the carrier is found by the State upon information provided by the third-party medical claims reviewer to have committed errors resulting in a loss to the State in a quantity or value, or both, beyond a certain threshold, as shall be provided in the contract or by rules promulgated by the State Treasurer. The contract shall permit the State to recover any loss resulting from errors identified by the third-party medical claims reviewer.

h. Information provided to or obtained by the third-party medical claims reviewer shall be delivered, received, maintained, and reviewed in a manner and shall contain only material consistent with the "Health Insurance Portability and Accountability Act of 1996," Pub.L.104-191. To the extent necessary in accordance therewith, a carrier shall ensure that information provided to the medical claims reviewer is attendant to only persons who are participants in the School Employees' Health Benefits Program.

L.2007, c.103, s.35; amended 2019, c.143, s.5.