IN THE MATTER OF THE ADOPTION OF AMENDMENTS TO N.J.A.C. 11:22-1.1
March 12, 2019
appeal from the New Jersey Department of Banking and
Insurance, Agency Docket No. PRN 2017-207.
C. Meisel argued the cause for appellants New Jersey Dental
Association and Mark Vitale, D.M.D.
Jeffrey S. Posta, Deputy Attorney General, argued the cause
for respondent New Jersey Department of Banking and Insurance
(Gurbir S. Grewal, Attorney General, attorney; Melissa H.
Raksa, Assistant Attorney General, of counsel; Jeffrey S.
Posta, on the brief).
Judges Yannotti, Rothstadt and Gilson.
Vitale, D.M.D., and the New Jersey Dental Association (NJDA)
appeal from the adoption of administrative rules by the New
Jersey Department of Banking and Insurance (Department)
implementing the Health Claims Authorization, Processing and
Payment Act (HCAPPA). L. 2005, c. 352
(codified as amended in various sections of titles 17, 17B,
and 26 of the New Jersey Statutes Annotated). We affirm.
begin our consideration of the appeal with a brief summary of
the history of HCAPPA. The Health Information Electronic
Interchange Technology Act (the HINT Act) was enacted in
1999. L. 1999, c. 154 (codified as amended
in various sections of titles 17, 17B, 26, and 45 of the New
Jersey Statutes Annotated). The HINT Act provided for, among
other things, the electronic receipt, transmission, and
prompt payment of claims for health and dental benefits.
amended certain provisions of the HINT Act, and added
substantially-identical statutes that permit health service
corporations, group health insurers, hospital service
corporations, medical service corporations, individual health
insurers, health maintenance organizations, and prepaid
prescription service organizations to obtain reimbursement of
overpayments of claims, subject to certain conditions and
criteria. The reimbursement provisions state:
(10) With the exception of claims that were submitted
fraudulently or submitted by health care providers that have
a pattern of inappropriate billing or claims that were
subject to coordination of benefits, no payer shall seek
reimbursement for overpayment of a claim previously paid
pursuant to this section later than [eighteen] months after
the date the first payment on the claim was made. No payer
shall seek more than one reimbursement for overpayment of a
particular claim. At the time the reimbursement request is
submitted to the health care provider, the payer shall
provide written documentation that identifies the error made
by the payer in the processing or payment of the claim that
justifies the reimbursement request. . . . .
(11)(a) In seeking reimbursement for the overpayment from the
health care provider, except as provided for in subparagraph
(b) of this paragraph, no payer shall collect or attempt to
collect: (i) the funds for the reimbursement on or before the
[forty-fifth] calendar day following the submission of the
reimbursement request to the health care provider; (ii) the
funds for the reimbursement if the health care provider
disputes the request and initiates an appeal on or before the
[forty-fifth] calendar day following the submission of the
reimbursement request to the health care provider and until
the health care provider's rights to appeal set forth
under paragraphs (1) and (2) of subsection e. of this section
are exhausted; or (iii) a monetary penalty against the
reimbursement request, including but not limited to, an
interest charge or a late fee. The payer may collect the
funds for the reimbursement request by assessing them against
payment of any future claims submitted by the health care
provider after the [forty-fifth] calendar day following the
submission of the reimbursement request to the health care
provider or after the health care provider's rights to
appeal set forth under paragraphs (1) and (2) of subsection
e. of this section have been exhausted if the payer submits
an explanation in writing to the provider in sufficient
detail so that the provider can reconcile each covered
[N.J.S.A. 17:48E-10.1(d) (health service corporations);
N.J.S.A. 17B:27-44.2(d) (group health insurance companies);
N.J.S.A. 17:48-8.4(d) (hospital service corporations);
N.J.S.A. 17:48A-7.12(d) (medical service corporations);
N.J.S.A. 17B:26-9.1(d) (individual health insurers); N.J.S.A.
26:2J-8.1(d) (health maintenance organizations); N.J.S.A.
17:48F-13.1(d) (prepaid prescription service organizations).]
2017, the Department issued a notice stating that it intended
to adopt amendments to the rule governing the prompt payment
of health and dental claims, and adopt new rules addressing,
among other things, the reimbursement by payers of claim
overpayments. See 49 N.J.R. 2729(a) (proposed Aug.
21, 2017). One of the proposed rules stated in relevant part
that a "health carrier or its agent may offset" any
overpayment "against a provider's future insured
claims," subject to certain conditions. Ibid.
(later codified at N.J.A.C. 11:22-1.8(b)(5)).
October 17, 2017, Dr. Vitale and the NJDA submitted comments
to the rule proposal. They asserted that the reimbursement
provisions of HCAPPA only apply to health benefits plans and
do not permit payers to obtain reimbursements of overpayments
of claims paid under "stand-alone" or
"dental-only" plans. Dr. Vitale and the NJDA also
asserted that the Department should confirm that the word
"offset" used in the proposed regulation has the
same meaning as "setoff" under New Jersey law. They
argued that the payer could not apply a "setoff" to
a provider's future claims for patients other than the
patient for whom the overpayment was made.
Department responded to these comments when it issued its
notice of rule adoption. See 50 N.J.R. 829(a) (Feb.
5, 2018). The Department stated that the suggested change in
the proposed rule governing reimbursement of overpayments is
not required. The Department noted that the reimbursement
provisions apply to health carriers, which as defined under
HCAPPA do not include dental service corporations or dental
Department concluded, however, that health carriers could
nevertheless obtain reimbursements of any overpayments they
may have made on claims, including claims submitted under
"stand-alone" or "dental-only" plans. The
Department stated that HCAPPA's reimbursement provisions
"are based ...