N.J. Admin. Code § 11:24B-4.2

Current through Register Vol. 56, No. 21, November 4, 2024

Section 11:24B-4.2 - General provisions

(a) All management agreement forms shall contain the following:

1. A provision specifying that the contract and amendments thereto are subject to prior approval of the Department, and may not be effectuated without such approval.

i. The provision may state that the following types of amendments do not require prior approval:

(1) Amendments that are of a clerical nature;

(2) Amendments which alter numbers, be they dollar amounts, enrollment amounts or the like, without altering methodologies from which the numbers were derived; and

(3) Amendments that involve the substitution of one set of variable text for another set of variable text, if both sets of variable text were previously approved for the management agreement form;

2. A provision specifying that any sections of the contract that conflict with State or Federal law are effectively amended to conform with the requirements of the State or Federal law;

3. A provision specifying the number of days or months required by both parties to the contract to provide notice of amendments to the contract.

i. The provision regarding notice for amendments shall not in any way limit the notice required to be afforded to providers in accordance with provider agreements.

ii. The provision shall include an exception to the required notice standards to accommodate more immediate changes that may be required by State or Federal law;

4. A provision specifying the compensation arrangement between the carrier and ODS.

i. If some portion of the compensation is tied to performance, or penalties may be assessed against compensation for failure to meet performance standards, the provision shall specify performance standards for the ODS to meet, as well as possible penalties for a failure to meet performance standards.

ii. The compensation arrangement and performance standards shall not be designed to provide financial incentives to an ODS to withhold covered services that are medically necessary;

5. A provision specifying that the carrier shall have access to at least the records, management information system, and other files that the ODS may maintain relevant to the functions being performed by the ODS on behalf of the carrier.

i. The provision may state that access is limited by the parties to reasonable notice, times and places, but such limitations shall be clearly specified.

ii. Reasonable prior notice shall not exceed seven business days;

6. A provision specifying that the carrier shall have the right to inspect and audit the books and records of the ODS, or portions thereof that are relevant to the services that the carrier has delegated to the ODS;

7. A provision specifying whether records relevant to the operations of the carrier, other than medical records, are the property of the carrier, or are owned jointly by the carrier and ODS;

8. A provision specifying that the contract is governed by New Jersey law with respect to business transacted in New Jersey;

9. A provision specifying the term of the contract;

10. A provision specifying termination and renewal rights and obligations of the parties.

i. The provision shall specify the reasons for which the parties may terminate the contract, including whether non-cause termination is permitted, the notice required to effect termination under the various circumstances, and the opportunity to cure deficiencies on which termination may be based, if any.

ii. The provision shall not specify a notice period of less than 60 days for non-cause terminations by either party;

11. A provision specifying whether the ODS may delegate one or more of the functions it is performing on behalf of the carrier.

i. If the ODS may delegate one or more functions, the provision shall specify what notice the ODS must provide to the carrier prior to delegating a function, and what right the carrier has to reject a delegation.

ii. If the functions that may be delegated are limited, the provision shall specify which functions may and may not be delegated;

12. A provision specifying what data information, if any, shall be exchanged between the carrier and the ODS with respect to demographics and utilization patterns of the population being served, the periodicity for the exchange of such data, and whether adjustments to compensation, enrollment standards, performance standards or other capabilities will be made based on the data provided, including any procedures to be followed in order to effect any such adjustments, or discussions of such adjustments; and

13. A provision specifying the period of accounting and the information to be provided with respect to any compensation arrangement involving withholds, bonuses or performance standards.

(b) Management agreement forms may include:

1. A provision specifying that the carrier and the ODS are independent contractors as permitted by statute, regulation and/or common law.

i. The provision may specify that the carrier and ODS have no employment, partnership, joint venture, or other explicit business relationship, but shall not deny the existence of an agency relationship between the carrier and the ODS; and

2. Other provisions not specifically prohibited in accordance with this subchapter or other law.

(c) No management agreement shall contain:

1. A provision that establishes any limitation on the time period during which any party to the contract may bring suit against the other that is less than that set forth under the statute of limitation established by law;

2. A provision that establishes a unilateral right of any party to the contract to amend the contract, or that otherwise requires a party to abide by the amended terms of the contract during either a notice of termination period or a continuity of care period in the event that the one party elects to terminate the contract rather than accept an amendment by the other party.

i. The provision may allow for unilateral amendment if the amendment is required by State or Federal law;

3. A provision that requires the ODS to assure that it never charges the carrier a rate that is greater than the least amount charged to another entity with which the ODS contracts for similar services, or any other most-favored-nation type of clause;

4. A provision that limits any obligation of the carrier to provide remuneration, in accordance with the terms of provider agreements, to providers under contract with the ODS for services rendered by those providers to the carrier's covered persons in the event of the default or bankruptcy of the ODS, but this shall not prohibit a provision that allows the carrier to attempt to recoup from the ODS or its assets amounts that may have been paid to the ODS that are subsequently paid separately to the ODS' contracted providers, or other unanticipated expenses incurred as a result of the default or bankruptcy of the ODS.

i. This prohibition shall not apply to a management agreement between a carrier and LODS if the Department is permitting the carrier to take a credit for ceding reserve liability to the LODS;

5. A provision that voids or makes voidable any provision required to be part of a provider agreement in accordance with this subchapter or other law;

6. A provision that has the effect of requiring adherence by providers with a provision that is prohibited from being a part of a provider agreement in accordance with this subchapter or other law; or

7. A provision that conflicts with any of the permissible provisions of a provider agreement that is otherwise in accordance with this subchapter or other law.

(d) A management agreement shall include the provisions of 11:24B-4.4, 4.5, 4.6, 4.7, 4.8, 4.9 and 4.10 as appropriate to the functions that the ODS is to perform on behalf of the carrier.

N.J. Admin. Code § 11:24B-4.2