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Out-of-network Consumer Protections

The Out-of-network Consumer Protection, Transparency, Cost Containment, and Accountability Act, (P.L.2018, c.32), (“Act”), was signed into law on June 1, 2018, and became effective on August 30, 2018.  This Act provides enhanced protections for consumers who receive health care services from out-of-network providers under the circumstances described below.  These enhancements include:

  • transparency and various disclosure requirements by providers and carriers;
  • the creation of an arbitration system for out-of-network payment disputes; and
  • protections for consumers for certain out-of-network bills.

The Department of Banking and Insurance issued Bulletin No. 18-14 on November 20, 2018 to provide guidance to carriers, health care providers, and other interested parties to help those entities meet their obligations under the Act, pending the adoption of rules.

Out-of-network Balance Billing Protection: Health care providers are prohibited from balance billing a covered person for inadvertent out-of-network services and/or out-of-network services provided on an emergency or urgent basis above the amount of the covered person’s liability for in-network cost-sharing (i.e. the covered person’s network level deductible, copayments, or coinsurance).  

  • “Inadvertent out-of-network services,” means health care services that are: covered under a health benefits plan that provides a network; and are provided by an out-of-network health care provider in an in-network health care facility when in-network health care services are unavailable in that facility or are not made available to the covered person. "Inadvertent out-of-network services" also includes laboratory testing ordered by an in-network health care provider and performed by an out-of-network bio-analytical laboratory; and
  • “Emergency or Urgent basis” means all emergency and urgent care services.

Any attempts by the out-of-network health care provider to bill the covered person for these types of services above the covered person’s in-network cost-sharing liability should be reported to the covered person’s carrier, and a complaint may be filed with the appropriate provider’s licensing board or other regulatory body, as appropriate.  A complaint may also be filed with the Department.  The Department will investigate the complaint and when appropriate, refer the matter to the appropriate licensing agency or regulatory body for review.   

Out-of-network arbitration: The Act creates an arbitration process to resolve out-of-network billing disputes for inadvertent and/or emergency/urgent out-of-network services. More information about arbitration, and the process for initiating the arbitration process, can be found at the Department’s arbitration vendor’s website:

Arbitrations can be between:

  • Carriers and providers - Where carriers and out-of-network health care providers cannot agree upon reimbursement for such services, an arbitrator will choose between the parties’ final offers as provided herein.
  • Self-funded plans that opt in and providers - A self-funded plan may opt to be subject to the claims processing and arbitration provisions, as provided herein, and be subject to the same arbitration process as carriers in the insured markets. To find out if a plan is self-funded, look at the ID card.  A self-funded plan that has opted in to arbitration will state “NJ arbitration – YES” on the ID card.
  • Members of self-funded plans that do not opt in and providers - In the case of a self-funded plan, which does not elect to be subject to the claims processing and arbitration provisions of the Act, a covered person under that plan or an out-of-network health care provider may initiate arbitration, wherein the arbitrator will choose a final amount that the arbitrator determines is reasonable, which is binding on the covered person and the out-of-network health care provider, but not on the self-funded health benefits plan that did not opt-in to arbitration. The process to initiate arbitration by members of self-funded plans that do not elect to the subject to this law  (or “opt-in” to the law) is described here:

Carrier Transparency Requirements: The transparency provisions of the Act apply to all carriers operating in New Jersey with regards to health benefits plans that are issued in New Jersey.  Carriers are required to:

  • maintain up-to-date website postings of network providers;
  • provide clear and detailed information regarding how voluntary out-of-network services are covered for plans that feature out-of-network coverage;
  • provide examples of out-of-network costs;
  • provide treatment specific information as to estimated costs when requested by a covered person; and
  • maintain a telephone hotline to address questions.
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