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New Jersey Healthcare Legislation Set to Improve Situation Concerning Out-of-Network Providers

Monday, December, 14, 2015

New Jersey might soon have legislation establishing a framework for arbitration when disputes arise between healthcare providers and insurance companies in cases where the insured uses an out-of-network provider. Arbitration would be used to settle disputes of this nature whether the use of the out-of-network provider was intentional and necessity, or by accident.


The goal of the proposal is to prevent patients from being held responsible for charges that are a surprise in addition to their usual out of pocket costs. Healthcare providers and hospitals have been lobbying against the legislative efforts. Their argument is it is much too favorable for insurance carriers and it would be tough for providers to set rates that are fair for reimbursement.


Assemblyman Craig Coughlin of Middlesex, the committee chair, proclaimed, “This is a significant day for New Jersey health care consumers… and is a fair and balanced compromise.”


The bill would shield consumers from payment disputes between their provider and carrier. It would also impose disclosure requirements on providers and carriers, and would allow payment disputes to be subjected to peer review panels made up of experts in a given field.


In addition to this proposal, lawmakers are also proposing the creation of a Healthcare Price Index that would require the state Department of Banking and Insurance to set price rates for out-of-network providers. This would be done in conjunction with carriers and providers.


If the bill is approved, it would require insurance providers to provide patients with a detailed breakdown of their expected costs at least 30 days prior to the medical procedure. Carriers would also need to post updated lists of providers for health plans every 20 days.