Vitale/WEINBERG/Cruz-perez bill increasing Transparency in Out-of-Network Care Costs advances

Bill Calls for Elimination of Surprise Out-of-Network Charges, Full Disclosure, Cost Containment, and Consumer Protection

TRENTON – Legislation sponsored by Senate Health Committee Chair Joseph F. Vitale, Senate Majority Leader Loretta Weinberg, and Senator Nilsa Cruz-Perez that would eliminate surprise out-of-network health care charges and provide greater transparency and consumer protection was approved yesterday by the Senate Budget & Appropriations Committee.

“A patient lying on a hospital bed should only be focused on their health and recovery, not whether any of their care providers is in-network or out-of-network. These matters should be resolved long before decisions for elective surgery are made and should never be an issue in emergency situations,” said Senator Vitale (D-Middlesex). “This bill protects New Jersey patients against unethical practices at their most vulnerable times and from receiving surprise bills for out-of-network care by requiring insurance companies and healthcare providers to be more upfront about medical costs and options.”

The “Out-of-Network Consumer Protection, Transparency, Cost Containment and Accountability Act” is designed to increase transparency in pricing for health care services, enhance consumer protections, create a system to resolve certain health care billing disputes, contain rising costs, and measure success with respect to these goals.

“Ensuring that New Jersey’s health care consumers are protected and not exploited by questionable billing practices is our primary goal,” said Senator Weinberg (D-Bergen). “Residents have been forced to choose between paying their medical bills and sustaining their daily living expenses as a result of inadvertent medical costs. This legislation will put an end to that going forward by requiring disclosure, transparency, and cost containment.”

The bill, S-1285, would require health care facilities, prior to non-emergency or elective procedures, to:

• disclose to patients whether the health care facility is in-network or out-of-network in respect to the patient’s health benefits plan;
• advise patients that, if the facility is in-network, the patient will not incur any out-of-pocket costs outside of those typically applicable to an in-network procedure unless he or she has knowingly, voluntarily, and specifically selected an out-of-network provider to provide services;
• advise patients that, if the facility is out-of-network, the patient will have a financial responsibility applicable to health care services provided at an out-of-network facility.

A health care facility would also be required to make available to the public a list of the facility’s standard charges for items and services it provides.

“New Jersey’s healthcare consumers deserve complete transparency so that they can make informed decisions about their care,” said Senator Cruz-Perez (D-Camden/Gloucester). “Surprise bills are unethical and can cause long-term financial ruin. Our residents deserve better.”

The bill would also require health care professionals, verbally or in writing, to disclose to covered patients the health benefits plans in which they are participating providers and the facilities with which they are affiliated prior to non-emergency or elective procedures at the time of an appointment. If the health care professional is out-of-network, the bill also requires health care professionals to, in layman’s terms:

• inform patients that they are out-of-network and that the estimated amount to be billed for services is available upon request;
• disclose to patients in writing, if requested, the amount the health care professional will bill absent of unforeseen medical circumstances that may arise when the medical service is provided; and
• inform patients that they will have a financial responsibility applicable to health care services provided by an out-of-network professional in excess of their copayment, deductible, or coinsurance, and that they may be responsible for any costs in excess of those allowed by their health benefits plan.

The bill also places the responsibility on health care professionals to provide to patients, as practicable, contact information of any health care providers scheduled to perform anesthesiology, lab, pathology, radiology or assistant surgeon services in connection with the care to be provided and to recommend that the patient contact their carrier to learn more about any costs associated with these services. Should a primary care physician or internist perform an unscheduled procedure in his or her office, it would be permissible to provide the required notice verbally at the time of the service.

“The legislation provides the necessary transparency, full disclosure, and ultimately consumer protection for New Jersey residents when it comes to costs incurred for out-of-network medical care services, which many patients aren’t even aware of when they receive these services,” said Senator Vitale. “In too many instances, patients are shocked when they find themselves receiving exorbitant bills for services they had no idea would cost them out-of-pocket expenses. This would eliminate these surprise charges and provide more predictability for residents seeking care.”

Under the bill, health insurance carriers would also be required to update their websites within 20 days of the addition or termination of a provider from the carrier’s network or a change in a physician’s affiliation with a facility. With respect to out-of-network services, for each health benefits plan offered, a carrier would be required to provide a covered person with:

·         a clear and understandable description of the plan’s out-of-network health care benefits;

·         examples of anticipated out-of-pocket costs for frequently billed out-of-network services;

·         information in writing and online that reasonably permits a covered person to calculate the anticipated out-of-pocket cost for out-of-network services in a geographical region or zip code based on the difference between the amount the carrier will reimburse for out-of-network services and the usual and customary cost of out-of-network services;

·         a response to a covered person’s request concerning whether a health care provider is an in-network provider; and

·         the approximate dollar amount that the carrier will pay for a specific out-of-network service.

“People should know what they’re getting into so they can make informed decisions rather than finding themselves sinking into debt due to medical bills they never expected to receive,” added Senator Vitale. “These bait-and-switch tactics are simply unacceptable.”

Should a patient receive medically necessary emergency services at an out-of-network health care facility or inadvertently receive care that is covered by insurance but from an out-of-network professional, whether at an in-network or out-of-network health care facility, the bill stipulates that the patient may incur no greater out-of-pocket costs than he or she would have incurred with an in-network provider for covered services.

“There are cases where a patient goes to an in-network facility to avoid out-of-pocket costs, but still gets billed anyway,” said Senator Weinberg. “What these individuals don’t realize is that some services at in-network health care facilities, like laboratory testing as one example, may be out-of-network. And even though they did their due diligence to avoid that hefty bill, they still get one. It’s simply not right.”

The bill further outlines a process of binding arbitration to be initiated for certain emergency and out-of-network billing situations in the event that a carrier and health care provider cannot agree on a reimbursement rate. In addition, as it relates to self-funded health plans that do not elect to be subject to arbitration under the bill, the bill provides for arbitration between the self-funded plan member and the out-of-network provider if attempts to negotiate reimbursement for services do not result in a resolution of the payment dispute.

If attempts to negotiate reimbursement for services provided by an out-of-network health care provider do not result in a resolution, the carrier, or self-funded plan that opts in, or out-of-network health care provider may initiate binding arbitration to determine payment for the services if the difference between the carrier’s or self-funded plan’s final offer and the provider’s final offer is not less than $1,000.

The arbitrators selected would have experience in health care pricing arbitration and certified by the American Arbitration Association. Their decision would be one of the two amounts submitted by the parties as their final offers and shall be binding on both parties. The arbitrator’s expenses and fees would be shared equally among the parties.

“The legislation calls for honest billing practices and sets a clear path for dispute resolution,” added Senator Cruz-Perez. “New Jersey patients deserve fairness.”

The bill was approved by the Senate Budget and Appropriations Committee with a vote of 7-0-6. It next heads to the full Senate for consideration.