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New Jersey Still Paying Off HMO Provider Debts

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NU Online News Service, Oct. 25, 10:45 a.m. – The New Jersey Department of Banking and Insurance says it has made a third interim payment of $7.5 million to 902 health care providers who are still owed money by American Preferred Provider Plan and HIP Health Plan of New Jersey.

The health maintenance organizations became insolvent in 1998.

New Jersey regulators paid the first installment of $15.9 million last fall and made a second installment of $11.9 million in June.

The provider payments were authorized under the New Jersey Insolvent Health Maintenance Organization Assistance Fund Act of 2000, which provides for compensating health care providers with unpaid claims arising before the two HMOs became insolvent.

The interim payments allow providers to collect part of what the HMOs owe them while the remaining claims are being settled.

New Jersey regulators say they expect to complete their review of unprocessed claims by the end of the year.

With the latest distribution, about 60% of the allowable amount of eligible claims has been paid, according to New Jersy regulators.

Donald Bryan, acting banking and insurance commissioner, says he expects that the latest payment will be the last interim distribution before the final payments are made.

The state set up the $50 million fund responsible for making the payments in 1998.

New Jersey used some of its share of proceeds from litigation against tobacco companies to provide the financing.