4. a. Notwithstanding the provisions of any other law to the contrary, a carrier or organized delivery system shall be liable to a covered person for economic and non-economic loss that occurs as a result of the carrier’s or organized delivery system’s negligence with respect to the denial of or delay in approving or providing medically necessary covered services, which denial or delay is the proximate cause of the covered person’s: (1) death; (2) serious and protracted or permanent impairment of a bodily function or system; (3) loss of a body organ necessary for normal bodily function; (4) loss of a body member; (5) exacerbation of a serious or life-threatening disease or condition that results in serious or significant harm or requires substantial medical treatment; (6) a physical condition resulting in chronic and significant pain; or (7) substantial physical or mental harm which resulted in further substantial medical treatment made medically necessary by the denial or delay of care.

Under the provisions of this section, a carrier or organized delivery system shall be liable for the health care treatment decisions of its employees, agents or other representatives over whom the carrier or organized delivery system has the right to exercise influence or control, or has actually exercised influence or control.

b. It shall be a defense to any action brought against a carrier or organized delivery system that:

(1) neither the carrier or organized delivery system nor any employee, agent or other representative of the carrier or organized delivery system, for whose conduct the carrier or organized delivery system is liable pursuant to subsection a. of this section, controlled, influenced or participated in the health care treatment decision; and

(2) the carrier or organized delivery system did not deny or delay authorization for any treatment prescribed or recommended to the covered person by a health care provider.

c. The provisions of subsection a. of this section shall not be construed to:

(1) require a carrier or organized delivery system to pay benefits for or provide a health care service that is not a covered service;

(2) create any liability on the part of an employer or other entity that purchases a contract for health care services or assumes risk on behalf of its employees; or

(3) create any liability on the part of a labor/management Taft-Hartley welfare trust fund established pursuant to 29 U.S.C. § 186.

d. (1) A carrier or organized delivery system shall not include a provision in a contract with a health care provider that exempts the carrier or organized delivery system from liability for the acts or conduct of the carrier or organized delivery system. Any such provision in a contract executed or renewed after the date of enactment of this act shall be void as contrary to the public policy of this State.

(2) The provisions of subsection a. of this section shall not be waived, shifted or modified by contract or agreement and responsibility for the provisions shall be a duty that cannot be delegated. Any effort to waive, modify, delegate or shift the liability established by subsection a. of this section through a contract for indemnification or otherwise, that is executed or renewed after the date of enactment of this act, shall be void as contrary to the public policy of this State.

e. The provisions of any State law that prohibit a carrier or organized delivery system from practicing medicine or dentistry, or being licensed to practice medicine or dentistry, may not be asserted as a defense by a carrier or organized delivery system in an action brought against it pursuant to subsection a. of this section.

f. In an action brought against a carrier or organized delivery system pursuant to subsection a. of this section, a finding that a health care provider is an employee, agent or other representative of the carrier or organized delivery system shall not be based solely on proof that the provider’s name appears on a list of approved health care providers made available to covered persons under a health or dental benefits plan.

L.2001,c.187,s.4.