Five Things You need to Know About New Jersey's Surprise Medical Bill Law

The new law is commonly referred to as the Surprise Medical Bill Law. The law requires carriers, providers, and facilities to disclose information about out-of-network costs and establishes a mandatory arbitration system to resolve out-of-network health care benefit disputes. Below is a summary of five key provisions of the new law.

Application to Health Benefits Plans.

First, the law does not apply to self-funded or self-insured benefit plans unless the plan elects to be covered by the law. In other words, it does not apply to health benefits plans that are covered by ERISA. The law applies to health benefits plans, issued or delivered in NJ by a carrier, that pay or provide hospital and medical expense benefits for covered services. Carrier is defined broadly and includes insurance companies, HMOs, MEWAs, and any other entity that provides a health benefits plan.

On November 20, 2018 the Commissioner of the Department of Banking and Insurance (“DOBI”) issued Bulletin No. 18-14 requiring self-funded plans that opt to be covered by the law to include on the plan’s identification cards that are issued to members a statement that the plan has opted-in to the arbitration provisions of the law. The Bulletin also requires self-funded plans to print in upper case text on the front of the identification card the words: “SELF-FUNDED.” Additionally, every entity that provides or administers a self-funded health benefits plan that elects to be subject to the law’s arbitration provisions must make an informational filing with the Commissioner regarding the form of the identification card. These reporting requirements may subject the law to a challenge that it is preempted by ERISA. We will monitor and report about any future ERISA preemption challenges to the law.

Out-of-Network Benefits

Second, the law prohibits a health care facility from billing the plan participant for emergency or medically necessary services in excess of any deductible, copayment, or coinsurance amount applicable to in-network services under the participant’s health benefits plan. If a participant receives inadvertent out-of-network services or medically necessary services on an emergency or urgent basis, the health care professional:

• in the case of inadvertent out-of-network services, may not bill the participant in excess of any deductible, copayment, or coinsurance amount; and
• in the case of emergency and urgent services, may not bill the participant in excess of any deductible, copayment, or coinsurance amount, applicable to in-network services pursuant to the participant’s health benefits plan.

Mandatory Binding Arbitration

Third, the law imposes a mandatory binding arbitration procedure to resolve payment disputes between a carrier and an out-of-network health care provider. Once a carrier receives a bill for emergency or inadvertent out-of-network services from an out-of-network provider, the carrier has the following options (1) pay the billed amount, or (2) determine within 20 days from receipt of the claim for services whether the claim is excessive and, if so, notify the provider within 20 days of the receipt of the claim of the carrier’s determination that the claim is excessive. If the carrier provides the notification, the carrier and provider have 30 days from the date of the notification to negotiate a settlement. If no settlement is reached after 30 days, the carrier must pay the provider its final offer for the services. If the carrier and provider cannot agree on the final offer and the difference between the carrier’s and the provider’s final offers is $1,000 or greater, the carrier, provider, or participant may initiate binding arbitration within 30 days of the final offer. The arbitrator must choose one of the two amounts submitted by the parties as final offers and the decision is binding on both parties. DOBI uses Maximus, Inc. as its vendor for OON arbitration disputes. Instructions on how to file OON arbitration requests can be found on the Maximus website.

Automatic Assignment of Benefits

Fourth, the law requires that a carrier pay benefits directly to an out-of-network provider for emergency or inadvertent out-of-network services. The benefits are assigned automatically to the out-of-network provider with no action required by the participant. A self-funded health plan may elect to participate in the law’s automatic assignment section.

Disclosure Requirements

Fifth, the law imposes on carriers, health care providers, and health care facilities numerous disclosure requirements with respect to out-of-network services. Below is just a sampling of the law’s disclosure requirements:

A carrier must provide a participant with a clear and understandable description of the plan’s out-of-network health care benefits, including the methodology used by the entity to determine the allowed amount for out-of-network services;
A carrier must disclose to a participant the amount the plan will reimburse as allowed under the plan’s methodology for out-of-network services;

• Prior to scheduling a non-emergency procedure, the health care professional must inform the participant that the professional is out-of-network and that the amount or estimated amount the health care professional will bill the participant for the services is available upon request;
• Upon receipt of a request from a participant for the service and CPT codes associated with the service, a health care professional must disclose to the participant in writing the amount or estimated amount that the health care professional will bill for the service;
• Prior to scheduling a non-emergency or elective procedure, a health care facility must disclose to the participant whether the health care facility is in-network or out-of-network with respect to the participant's health benefits plan; and
• Prior to scheduling a non-emergency or elective procedure, a health care facility must advise the participant to check with the physician arranging the facility services to determine whether that physician is in-network or out-of-network with respect to the participant's health benefits plan, and assist the participant in determining the health plan networks which have extended membership to any physician who is reasonably anticipated to provide services to the participant.

For questions about the Out-of-network Consumer Protection, Transparency, Cost Containment and Accountability Act, please contact Patrick W. McGovern, Esq. at 973-533-0777.