New Jersey Governor Signs Law Allowing Many Residents to Sue Health Insurers

With Congress "mired in a partisan debate" over patients' rights legislation, New Jersey Gov. Donald DiFrancesco (R) on July 30 signed into law a bill allowing "most" New Jersey residents to sue their health insurers, the Philadelphia Inquirer reports. The bill (A 3136), sponsored by Assembly members Guy Talarico (R), John Kelly (R), Steven Corodemus (R) and Reed Gusciora (D), allows patients to sue HMOs and health plans for delays or denials of care that lead to death or "serious harm," such as "loss or serious impairment of a bodily part or function" or "exacerbation of a serious health condition." While the law applies to the 3.1 million New Jersey residents in state-regulated health plans, it does not cover the estimated 2.7 million New Jersey residents who are covered by employer-sponsored health plans that are regulated by the federal government (Kiely, Philadelphia Inquirer, 7/31). According to the legislation, "Since the carriers are, in many instances, making medical decisions when they deny, delay or diminish health care treatments, they should be held to the same level of legal responsibility as physicians and other health care providers." The legislation establishes a "two-tiered system," allowing patients with the "most urgent risk of harm" to bypass a state appeals panel and sue in court, while patients with "less imminent" risk must undergo a three-step appeals process before filing a lawsuit. Under the bill, patients may only bypass the appeals process when delays or denials of care "cause an immediate risk of death, loss of an organ or limb, worsening of a life-threatening disease or condition, chronic and significant pain, or a problem that results in substantial need for additional medical treatment." Other patients must first appeal the decision to an HMO medical director, a panel convened by the HMO and an external review panel convened by the state before suing health plans in court. The legislation shields employers and trade unions from lawsuits in health care disputes (Kaiser Daily Health Policy Report, 6/26). The law also prohibits companies from "negotiating waivers from the law through contract with health care purchasers," and also does not cap the amount of money patients can be awarded in court. "The new law is the strongest of its kind in the nation, and stronger than any proposal currently under consideration in Congress," according to New Jersey Public Interest Research Group lobbyist Dena Mottola. New Jersey is the ninth state to implement legislation allowing patients to sue health plans (Philadelphia Inquirer, 7/31). For further information on state health policy in New Jersey, visit State Health Facts Online.