On June 1, 2018, the Out-of-Network Consumer Protection, Transparency, Cost Containment and Accountability Act (Act) was signed into law. The law (formerly Assembly Bill No. 2039) is linked here (ftp://www.njleg.state.nj.us/20182019/A2500/2039_I1.HTM), and is intended to reform and enhance consumer protections in the New Jersey healthcare delivery system, facilitate resolution of healthcare billing disputes, contain rights and costs, and define a matrix to measure achievement of these goals. The Act is particularly intended to protect consumers against certain “surprise” out-of-network charges, particularly in connection with hospital emergency room visits. While the hospital might be in network, consumers often find themselves with surprise bills as certain providers who provided services during the visit to the in-network hospital were not in-network providers. Thus, the Act addresses so-called “inadvertent out-of-network services,” i.e., services that are covered under a managed care health benefit plan, that provide a network and provided by an out-of-network healthcare provider in the event that the covered person utilized an in-network healthcare facility for covered healthcare services and, for any reason, in-network healthcare services are unavailable in that facility. Inadvertent out-of-network services include charges such as laboratory testing charges ordered by an in-network healthcare provider and performed by an out-of-network bio-analytic goal laboratory. The rationale underlying the Act is that the member did not knowingly or voluntarily or specifically select the out-of-network provider.
The Act also requires certain disclosures to consumers prior to scheduling an appointment for a non-emergency or elective procedure to assure that the covered person fully understands:
- whether the healthcare facility is in-network or out-of-network with respect to the covered person’s health benefit plan;
- advise the covered person to check with the physician arranging the facility service to determine whether or not that physician is in-network or out-of-network with respect to the covered person’s health benefit plan and provide information about how to determine whether the health plan participated in by any physician who is reasonably anticipated to provide services to the covered person;
- advise the covered person that at a healthcare facility that is in-network with respect to the person’s health benefit plan:
(a) the covered person will have a financial responsibility applicable to an in-network procedure and not in excess of the covered person’s co-payment, deductible or co-insurance as provided for in the person’s plan;
(b) unless the covered person, at the time of disclosure required under the Act, has knowingly, voluntarily, and specifically selected an out-of-network provider to provide services, the covered person will not incur any out-of-pocket costs in excess of the charges applicable to an in-network procedure;
(c) any bills, charges, or attempts to collect by the facility, or any healthcare professional involved in the procedure, in excess of the covered person’s co-payment, deductible or co-insurance as provided in the covered person’s health benefit plan in violation of the Act should be reported to the person’s carrier and the relevant regulatory authorities; and
(d) if the covered person’s coverage is provided through an entity providing or administering a self-funded health benefit plan that does not elect to be subject to this Act, that the services may be provided on an out-of-network basis, including those services associated with the healthcare facility, and further that the covered person may have a financial responsibility for those services provided by an out-of-network provider.
The disclosure notice should also advise the covered person that at a healthcare facility that is out-of-network with respect to the member’s health benefit plan, services may be provided out-of-network, which exposes the covered person to financial responsibility and that the covered person should contact his or her carrier for further consultation on these costs.
The Act also requires the healthcare facility to make available to the public a list of the facility’s standard charges for items and services provided by the facility, in a form consistent with federal guidelines, and further requires the facility to post on its website the plans in which the facility is a participating provider, as well as other information about services to be provided at the facility by physicians and other healthcare providers.
The Act also requires certain disclosures to members by carriers with respect to out-of-network costs and further require the carrier to file with the Department of Banking and Insurance on an annual basis the number of claims submitted by healthcare providers to the carrier which are denied or down-coded by the carrier and the reason for the denial or down-coding determination. Carriers are also required in the case of inadvertent out-of-network services not to bill the covered person in excess of any deductible, co-payment or co-insurance amount, and in the case of emergency and urgent services, carriers may not bill the covered person in excess of any deductible, co-payment or co-insurance amount, applicable to in-network services pursuant to the covered person’s health benefit plan.
In the event that the carrier and the professional healthcare provider cannot agree on a reimbursement rate for services provided pursuant to the Act, the carrier, professional, or covered person (member) as applicable, may initiate binding arbitration pursuant to the Act.
Binding arbitration as triggered by the Act must satisfy the following requirements:
- The party requesting arbitration shall notify the other party that arbitration has been initiated and state its final offer before arbitration, which in the case of the carrier shall be the amount paid under the Act. In response to the notice, the out-of-network provider shall inform the carrier of its final offer before arbitration occurs;
- Arbitration shall be initiated by filing a request with the Department of Banking and Insurance;
- The Department of Banking and Insurance shall contract, through the request for proposal process, every three years, with one or more entities that have experience in healthcare pricing arbitration. The arbitration shall consist of a review of the written submissions by both parties, which shall include the final offer for the payment by the carrier for the out-of-network healthcare provider’s fee and the final offer by the out-of-network provider for the fee the provider will accept as payment from the carrier
The arbitrator’s decision shall be one of the two amounts submitted by the parties as their final offers and shall be binding. Hence, the arbitration process is referred to as “baseball” or “final offer arbitration.” The arbitrator’s expenses and fees shall be split equally among the parties except in situations in which the arbitrator determines that payment by the carrier was not made in good faith, in which case the carrier shall be responsible for all of the arbitrator’s expenses and fees. Each party is responsible for its own costs and fees, including legal fees. The Act was hotly contested by network providers, and certain aspects (including final offer arbitration) was a concern for the insurance industry. Nonetheless, the Act is expected to protect thousands of New Jerseyans covered by state-regulated health plans from “balanced billing” or paying when an insurance company has not paid.