Recently, a group of New Jersey lawmakers introduced Bill A-4444 in the Senate proposing to codify the Out-of-Network Consumer Protection, Transparency, Cost Containment and Accountability Act (the “Act”). The Act’s goal is to increase transparency in pricing for health care services and contain rising costs, as out-of-network coverage charges have been steadily exposing consumers to additional costs. In an effort to more efficiently transform the healthcare system, lawmakers are proposing the institution of a Health Price Index (“HPI”) system, which will require health care providers to provide all claims information to an entity maintaining the index, allowing policymakers to evaluate variations in costs of services and resources across the State.
The Act will impose additional responsibilities on health care professionals, requiring disclosure of, among other things, financial responsibility, procedure costs and description, in-network/out-of-network provider information, and out-of-pocket expenses to patients prior to their scheduled procedure date. Most importantly, the Act will also limit out-of-network providers’ ability to charge a patient in excess of in-network rates and insurance carriers in excess of certain established cost schedules when patients inadvertently receive out-of-network services. The Act defines “Inadvertent out-of-network services” as “health care services that are covered under a managed care health benefits plan that provides a network; and provided by an out-of-network health care provider in the event that a covered person utilizes an in-network health care facility for covered health care services and, for any reason, in-network health care services are unavailable in that facility.” A common example of an “inadvertent out-of-network service” under the Act would be out-of-network anesthesia provided at an ambulatory surgery center, where there center itself is in-network. The cost schedule established by the Act will be based on the median in-network commercial paid claims for health services in New Jersey (as evidenced by the HPI data), and will establish reasonable payment ranges for out-of-network services. The proposed minimum and maximum payment ranges are currently at 75% and 250% of the median paid in-network claims for identical services. Finally, the Act proposes a mandatory arbitration provision, allowing an independent arbitrator to settle payment disputes between insurance carriers and health care providers.
The imposition of the Act may bring opposition from health care providers. While the Act intends to cut costs to consumers and generate savings for insurance carriers as a result of the reduction in out-of-network claims payments, health care providers may be on the losing end. The Act may prohibit providers from charging both patients and insurance carriers their current standard rates, and may limit providers’ ability to negotiate fair contracts with insurance carriers.
Though the Bill is still in its preliminary phase, health care providers are advised to stay informed of the legislative situation, and engage in the process as much as possible. If you have questions, contact Frier Levitt to speak with one of our attorneys.
