On April 12, 2018, the New Jersey Assembly and Senate passed the Out-of-Network Consumer Protection, Transparency, Cost Containment and Accountability Act (the “Act”), and the legislation was sent to the Governor. The Governor has 45 days to act on the legislation. The Act will become effective within ninety (90) days if it is signed by the Governor. Among other things, the Act provides a clearer process on how out-of-network facilities or professionals may balance bill after providing certain required disclosures before services are provided. Below is a summary of certain aspects of the Act’s provisions, and all providers are encouraged to read the Act in its entirety and seek legal counsel regarding its provisions.

Sections 1, 2, and 3 of the Act set forth the Act’s title, legislative purpose and intent, and definitions of various terms as used in the Act and defines the term "health care provider" to include both facilities and professionals.

Section 4 sets forth the notice requirements that a health care facility must provide a covered person prior to scheduling an appointment for a non-emergency or elective procedure. The Act requires all facilities to, among other things: disclose to the covered person whether it is in-network or out-of-network; inform the covered person that he or she should contact the physician arranging the facility services to determine if such physician is in-network or out-of-network; make publicly available a list of the facility’s standard charges for items and services provided by the facility; and provide most of the above-mentioned information on its website. Further, an in-network facility must advise the covered person, among other things, that the covered person will not incur any out-of-pocket costs in excess of his or her copayment, deductible, or coinsurance. An out-of-network facility must make several additional disclosures including, but not limited to, that the covered person may have a financial responsibility for services in excess of his or her copayment, deductible, or coinsurance and that the covered person should contact the carrier for further consultation.

Section 5 sets forth the notice requirements that a health care professional must provide a covered person prior to rendering non-emergency services. All health care professionals must disclose the health benefits plans in which the professional is a participating provider and the facilities with which the professional is affiliated.

In addition, Section 5 requires out-of-network health care professionals to, among other things: advise the covered person that the professional is out-of-network; that upon request, the professional can provide an estimated amount the covered person will be billed for the procedure, including the CPT codes; and inform the covered person that he or she may be responsible for any costs in excess of those allowed by their health benefits plan.

Further, Section 5 requires a physician, whether in-network or out-of-network, to provide the covered person with certain information regarding other providers who may provide anesthesiology, laboratory, pathology, or radiology services to the covered person in the physician’s office, provide certain information regarding the other provider, and recommend that the covered person contact his or her carrier for further consultation on the costs associated with these services.

Moreover, Section 5 requires a physician, whether in-network or out-of-network, who intends to perform services on a covered person at a facility to provide the covered person and the facility with certain information regarding any other physician who may perform services on the covered person, provide certain information regarding the other provider, and recommend that the covered person contact his or her carrier for further consultation on the costs associated with these services.

Section 6 sets forth the notice requirements that an insurance carrier must provide the covered person so that he or she may have sufficient information to estimate his or her out-of-pocket costs.

Section 7 sets forth, among other things, the billing process for a health care facility when a covered person receives medically necessary services on an emergency or urgent basis, as defined by the Emergency Medical Treatment and Active Labor Act. In particular, the health care facility cannot bill the covered person in excess of any deductible, copayment, or coinsurance amount applicable to in-network services pursuant to the covered person’s health benefits plan. For facilities that are out-of-network, the carrier and facilities must then negotiate a reimbursement rate and, if they cannot agree, then they may proceed to the arbitration.

Section 8 sets forth the billing process for health care professionals regarding “inadvertent out-of-network services” or “medically necessary services at an in-network or out-of-network health care facility on an emergency or urgent basis.” “Inadvertent out-of-network services” involves situations where a covered person utilizes an in-network health care facility and, for any reason, in-network health care services are “unavailable” and, instead, are provided by an out-of-network provider. Although the term “unavailable” is not defined, the example provided in the statute includes “laboratory testing ordered by an in-network health care provider and performed by an out-of-network bio-analytical laboratory.”

With regard to “inadvertent out-of-network services” or “medically necessary services at an in-network or out-of-network health care facility on an emergency or urgent basis,” Section 8 states that the health care professional shall not bill the covered person in excess of any deductible, copayment, or coinsurance amount applicable to in-network services pursuant to the covered person’s health benefits plan. Similar to facilities that are out-of-network, the out-of-network professional and carrier must then negotiate a reimbursement rate and, if they cannot agree, then they may proceed to the arbitration.

Section 9 requires a carrier, in the event a covered person receives “inadvertent out-of-network services” or “services at an in-network or out-of-network health care facility on an emergency or urgent basis,” to ensure that the covered person will not incur out of pocket costs greater than he or she would have incurred with an in-network health care provider. Sections 7 and 8, however, already prevent an out-of-network provider from billing a covered person in such situations, except for the deductible, copayment, or coinsurance amounts that would apply had the covered person utilized an in-network provider. Importantly, Section 9 provides for an assignment of benefits to the out-of-network provider, and with this assignment, the carrier must provide any reimbursements directly to the out-of-network provider. The carrier must also provide the out-of-network health care provider with a written remittance of payment that specifies the proposed reimbursement and the applicable deductible, copayment, or coinsurance amounts owed by the covered person. The out-of-network provider can then bill the carrier for the services. The carrier must pay the out-of-network provider with the amount the carrier believes is reasonable. Then, if the out-of-network provider disagrees with the amount, the parties can either reach an agreement on an additional amount or the parties can arbitrate the dispute.

Sections 10 and 11 set forth the arbitration process in the event attempts to negotiate reimbursement between an out-of-network provider and a carrier are unsuccessful.

Section 12 discusses the Department of Banking and Insurance information gathering requirements.

Section 13 sets forth additional written notice requirements a carrier must provide to a covered person with respect to protections provided pursuant to the Act.

Section 14 requires carriers to calculate the savings resulting from a reduction in out-of-network claims. This Act is intended to confer a benefit on the insurance carriers, which is expected to, in turn, “trickle down” and reduce the cost of premiums. As such, this Section requires the Department of Banking and Insurance to issue an annual report on the savings to policyholders and the healthcare system that results from this Act.

Section 15 prohibits an out-of-network provider from waiving deductibles, copayments, or coinsurance.

Section 16 sets forth annual audit requirements for insurance carriers.

Section 17 sets forth the penalties for any person or entity who violates the Act’s provisions.

Self-Funded Plans: The Act addresses Self-Funded Plans throughout and allows such Plans to obtain certain benefits of the Act if the Plan notifies the Department of Health that the Plan would like to participate in the arbitration and balance billing protections of the Act.