Insights

New Jersey Outlines New Out-Of-Network Consumer Protection, Transparency, Cost Containment and Accountability Act


On Nov. 20, 2018, Commissioner Caride released Bulletin No. 18-14 to provide guidance for the additional obligations under the Out-Of-Network Consumer Protection, Transparency, Cost Containment and Accountability Act (the Act). As background, the Act became effective Aug. 30, 2018, with the purpose to enhance consumer protections from surprise bills for out-of-network health care services, including transparency, new consumer disclosures, and cost-containment for out-of-network services. This Act creates and modifies processes for carriers regarding out-of-network policy disputes for inadvertent and/or involuntary out-of-network services provided in New Jersey or to NJ residents.

In addition, it addresses out-of-network billing and adds new disclosure and transparency requirements. While most of the notice relates to insurance carriers that cover NJ residents, portions of the notice apply to self-funded health benefit plans that elect to be subject to the claims processing and binding arbitration provisions of the Act.

Claims Processing and Arbitration. The Act creates an arbitration process to resolve out-of-network billing disputes for inadvertent and/or involuntary out-of-network services. Specifically, when carriers (including self-funded plans that elect to participate) and out-of-network providers cannot agree upon reimbursement for such services, an arbitrator will decide and will be binding upon both parties. The intended result is that the out-of-network health providers will bill the covered person for the cost-sharing liability for inadvertent and/or involuntary out-of-network services only once upon acceptance of the allowed charge/amount, whether it is initially agreed upon, determined through negotiations or decided through the arbitration process. NJ providers and self-funded health benefit plans that opt-in must apply the new arbitration process applies for claims with a date of service on or after Aug. 30, 2019.

Out of Network Billing. The Act prohibits providers from balance-billing for inadvertent and/or involuntary out-of-network services for any amount above the financial responsibility that they would have incurred if the same service(s) had been provided by an in-network health care provider. The Act also prohibits most opportunities for an out-of-network provider to, either directly or indirectly, knowingly waive, rebate, give, pay or offer any thereof as an inducement to seek services from such out-of-network provider.

Disclosure and Transparency. Carriers must provide clear and understandable descriptions of the benefits for services rendered by out-of-network health care providers that are covered under the plan, including emergency or urgent services, for inadvertent out-of-network services and, where applicable, voluntary out-of-network treatment. The bulletin provides a template summary of the transparency disclosures required by the Act.

For self-funded plans that choose to opt-in to the claims processing and arbitration provisions, they are not bound to the transparency disclosures and other sections of the Act.

Bulletin No. 18-14 »
Template Summary of Transparency Disclosure Requirements »