Senate Commerce Committee Statement to Senate, No. 848 — State of New Jersey (January 27, 2020)

Summary

The Senate Commerce Committee of the State of New Jersey, in a statement dated January 27, 2020, reports favorably and with committee amendments Senate Bill No. 848, which revises review of the financial statements and records of health care service firms. All firms would submit financial statements to the Director of the Division of Consumer Affairs consistent with the firm's State tax filings. A firm receiving more than $250,000 for New Jersey Medicaid Personal Care Assistance services stays subject to the annual audit, and a firm with $10 million or more in gross revenue in a year must submit an audit for that year. Certain other firms would instead submit a review by an independent third party practitioner.

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SENATE COMMERCE COMMITTEE

STATEMENT TO

SENATE, No.
848

with
committee amendments

STATE
OF NEW JERSEY

DATED: JANUARY
27, 2020

The Senate Commerce Committee reports favorably and
with committee amendments Senate Bill No. 848.

This
bill will revise the requirements for reviewing the financial statements and
records of health care service firms. Current law requires all health care
service firms to complete annual audits, which are to be submitted to the
Director of the Division of Consumer Affairs in the Department of Law and
Public Safety every three years.

Under
the bill, all health care service firms will be required to submit financial
statements prepared by the firm to the director, which statements are to be
consistent with the firm’s tax filings with the State. Additionally, any
health care service firm that receives more than $250,000 for the provision of
New Jersey Medicaid Personal Care Assistance services will continue to be
subject to the current annual audit requirement, and health care service firms
that generate $10 million or more in gross revenue in a year will be required
to submit an audit for that year.

For
health care service firms with gross revenue for the year that is between $1
million $10 million, and which receive less than $250,000 for the provision of
New Jersey Medicaid Personal Care Assistance services, the firms will, in lieu
of an audit, be required to submit a report for that year to the director that
is prepared by an independent third party practitioner based on a review of the
health care service firm’s financial statements and records, general
management, and internal controls.

In
the event that the division makes adverse findings against a health care
service firm upon review of its independent third party report, the director
will order corrective action by the firm, followed by a separate review of the
firm’s data for the year, to be performed by a different independent third
party practitioner than the one that performed the original review. The firm
will additionally be required to submit an audit for the following year,
regardless of the firm’s gross income in that year.

The
director, in consultation with representatives of registered health care
service firms, will be required to develop standards and procedures for the
independent third party review of health care service firm financial statements
and records, general management, and internal controls. At a minimum, the
standards and procedures will address the minimum educational, training, and
professional certification qualifications for practitioners performing the
reviews; the data points and metrics to be included in a review; and the
thresholds and requirements for the division to make an adverse finding and
take corrective action against a firm.

This bill was pre-filed for introduction in the
2020-2021 session pending technical review. As reported, the bill includes the
changes required by technical review, which has been performed.

COMMITTEE AMENDMENTS:

The committee amended the bill to make technical
changes to the bill, to clarify that certain provisions of the bill apply to
health care service firms that receive funds for the provision of New Jersey
Medicaid Personal Care Assistance services.

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