There are two separate independent appeals programs for disputed claims payments under the managed care reform law that became effective on July 11, 2006: Independent Health Care Appeals Program (IHCAP) and Program for Independent Claims Arbitration (PICPA). These procedures apply to all services rendered after July 11. Generally, all disputed claims must first be appealed through the carrier's internal procedures, and those remedies exhausted, before a provider can file an independent appeal. Claim Form for internal appeals.

IHCAP is the independent appeals mechanism for utilization management review determinations, and medical necessity determinations, including whether a service is cosmetic, experimental, or investigational. IHCAP is also the appeal process for pre-existing condition determinations. Consent of the patient is always necessary and patients must be given notice of the status at each stage of the appeal. There is also a $25 filing fee. See: Information on the IHCAP procedure and Consent Forms.

PICPA is the independent appeal mechanism for claims payment issues, including administrative issues such as whether the payer has used the appropriate fee schedule and prompt pay issues. Claims under PICPA must be filed within 90 days. Consent of the patient is not necessary. The amount at issue must exceed $1,000, but claims can be aggregated to reach the threshold amount. This is a state operated arbitration procedure. The costs of arbitration will be divided 50/50 and some costs must be paid at the beginning of the arbitration with the balance due at the end of the arbitration. See: Information on the PICPA procedure.

The New Jersey Department of Banking & Insurance (DOBI) has not established the independent appeal programs under either IHCAP or PICPA. To avoid "timeliness" of filing issues, the state will allow claims to be filed for 60 days after these independent appeal programs are operational.

DOBI is responsible for rule-making and implementing the independent programs. DOBI has published two bulletins to provide guidance to providers and payers on the independent appeal programs until formal rule-making can take place.

DOBI bulletins:

• Bulletin 06-16: P.L. 2005, C. 352 – HEALTH CLAIMS AUTHORIZATION, PROCESSING AND PAYMENT ACT

• Bulletin 06-17: P.L. 2005, C. 352 – HEALTH CLAIMS AUTHORIZATION, PROCESSING AND PAYMENT ACT (HCAPPA) – FORMS

MSNJ POSITION: MSNJ believes that independent appeals programs are necessary to review the actions of insurers. The programs should be easy and cost-effective to use. There should be no filing fees.

MSNJ ACTION: MSNJ will continue to work with the Legislature and DOBI to make the independent appeal process cost-effective, expedient, and meaningful.

Class-Action Note: The Aetna, CIGNA, and HealthNet settlement agreements establish independent procedures for billing disputes. (Paragraph 7.10). These billing dispute procedures also require filing fees and some cost sharing.