On June 1, 2018, the New Jersey Legislature enacted the Out-of-Network Consumer Protection Transparency Cost Containment and Accountability Act to be codified at N.J.S.A. 26:2SS-1 to 20(d) Act”). The Act will become effective on August 30, 2018 and is intended to enhance consumer protections from out-of-network bills, for example, from hidden providers who provide out-of-network services at in-network facilities. The Act requires and addresses in detail, the following:

  • Transparency and Consumer Disclosure Requirements, including the requirement that carriers create an internet website and a telephone hotline staffed at least 16 hours per day with a live representative.
  • Claims processing, including appeals through an Arbitration System.
  • Negotiation with out-of-network providers, short of arbitration.
  • Cost Containment for Inadvertent and Involuntary Out-of-Network Services.

The New Jersey Department of Banking and Insurance (the “Department”) intends to propose regulations to implement the Act in the near future. Given the short timeframe until the effective date of the Act, the Department will issue a bulletin to provide greater guidance to carriers, which is defined in the Act to include health carriers issuing health benefit plans, multiple employer welfare arrangements and the State Health Benefits Program as well as the school employees’ health benefits program and other entities providing health benefit plans; health care providers and other interested parties, to facilitate their ability to meet their obligations under the Act pending adoption of regulations. Note that Medicaid, Medicare, Tri-Care and certain other federally funded plans are excluded from the definition of “health benefit plans” and thus are not subject to the Act.

The Act is consumer oriented and intended to both protect the consumer from out-of-network charges and further to truncate the dispute process for the benefit of carriers and providers as well as the consumers.