The New Jersey legislature expects to pass the “Out-of-Network Consumer Protection, Transparency, Cost Containment and Accountability Act” before the legislative session ends in January 2016. The New Jersey Assembly has scheduled a hearing on Monday, November 23. The bill, sponsored by Assemblyman Craig Coughlin (D-Middlesex) and Senator Joseph Vitale (D-Middlesex) requires doctors and hospitals to disclose whether their services are covered by a person’s insurance coverage “in-network” before treatment occurs. The Assembly and Senate versions of the bill are nearly identical and are linked here.

Senate: http://www.njleg.state.nj.us/2014/Bills/S0500/20_I1.HTM 

Assembly: http://www.njleg.state.nj.us/2014/Bills/A4500/4444_I1.HTM

Providers would be obligated to explain to patients in advance who is covered and not covered, and what the additional costs would be to an individual for an out-of-network provider.

The bill pertains only to elective and non-emergency procedures as disclosure of in-network or out-of-network coverage would be impractical in an emergency situation. Hence, New Jersey consumers and insurance companies or health plans can only be charged the in-network rate for emergency care.

The current version of the bill also creates an independent arbitration process to resolve billing disputes between insurance carriers and health plans and health care providers. If the carrier or health plan and the professional cannot agree on a reimbursement rate for the services provided within 45 days after the carrier/plan is billed for the service, the carrier, professional or covered person, as applicable, may initiate binding arbitration, according to the latest draft of the bill. The arbitration process further requires that a peer review panel comprised of doctors with expertise in related specialties evaluate the bill in dispute. The panel would make a recommendation, determining whether the billed amount is fair. The arbitrator must consider the recommendation in reaching a ruling. No matter will proceed to arbitration unless the amount in dispute is $1,000 or more.

In addition to providing notice either on a website or in another written form of which insurance carriers and plans, a hospital or other healthcare provider will accept, those providers must convey the name and address of any other specialists who will be involved in the care so that the New Jersey consumer can determine their network status.

It is clear that out-of-network fees have become a growing concern for consumers of medical care. While medical providers and hospitals assert that insurance companies and health plans created the out-of-network problem because their reimbursement rates are so low, the carriers and plans, on the other hand, attribute the problem to a small group of hospitals and medical professionals who refuse to join a network and charge exorbitant fees for the services they provide to New Jersey consumers.