April 18, 2018

Dear Client:

The New Jersey Legislature recently approved a bill, the “Out-of-network Consumer Protection, Transparency, Cost Containment and Accountability Act”, that materially alters the out-of-network reimbursement system in the State of New Jersey, largely to the detriment of healthcare providers, under the guise of consumer protection. The bill would disproportionately adversely affect first-responder-type out-of-network providers (versus those who perform pre-scheduled or elective procedures) who perform emergency or urgently-needed services on patients at a healthcare facility (e.g., such as trauma surgeons who respond to call, on-call specialists, anesthesiologists, hospitalists), as they would not be in the position to provide the patient with prior written notice of their out-of-network status in order to avoid the bill’s cap on charges and the carrier charge dispute mechanism. In the area of waivers of patients’ copayment, deductible and co-insurance, the bill would expressly prohibit the waiver of these patient portions, after decades of disputes between out-of-network providers and payors regarding a provider’s duty to charge/collect patient portions.

Given these changes, it is imperative for healthcare providers/facilities (e.g., physicians, ambulatory care facilities, including ambulatory surgical centers, surgical practices, imaging centers, hospitals, laboratories) to fully understand the bill and immediately implement a policy to ensure their compliance with the same, as payors are expected to immediately utilize the same in their unrelenting efforts to limit the benefits they pay out under their members’ out-of-network benefits plans. Please contact me for assistance in this regard.

Among the changes that would be effectuated by the bill, once it is signed by the Governor, are the following:

A. Waiver of Patient Portions : Out-Of-Network Providers may not knowingly waive, rebate, give, pay or offer to waive, rebate, give or pay all or part of the deductive, copayment or coinsurance owed by a covered person. Further regulations in connection with the foregoing prohibition will be forthcoming. The bill would exempt any waiver, rebate, gift payment or offer that otherwise falls within a safe harbor under federal Fraud and Abuse Laws (including advisory opinions issued by Center for Medicare Services and/or the Office of the Inspector General).

B. Non-Emergency Services:

a. Notice Requirement:

i. For non-emergency patients, the bill provides that, at the time the patient is scheduling their appointment, the provider/facility must: (a) advise the patient if the provider is in/out-of-network, (b) advise the patient how to check the in/out-of-network status of other providers who may treat the patient (e.g., other specialists in the same practice), (c) notify the patient that, if the treating provider is in-network, the patient’s responsibility will not be more than their co-payment.  

ii. Out-of-network Providers, at the time of service, must, in terms the patient can understand: (a) explain to the patient that the provider is out-of-network and, upon patient request, provide the patient with an estimate of their anticipated charges, (b) if the patient requests, provide a schedule of their anticipated CPT codes to be used during the course of treatment and the Provider’s charges for each code, (c) inform the patient of their responsibility for copayments, deductibles and coinsurance; and (d) advice the patient to contact their carrier for any additional questions.  

iii. Unscheduled Procedures: For unscheduled procedures, the notice requirement to the patient may be verbal.  

b. Cap on Charges: Unless the patient, at the time of the disclosure of network status, “knowingly, voluntarily and specifically selected an out-of-network provider to provide services”, there will be no out-of-pocket expenses charged to the patients above those that would be payable had the provider been in-network. Any bills, charges or attempts to collect above the co-payment, deductible or co-insurance would constitute a violation of the law.  

C. Emergency and Urgently-Needed Treatment; Inadvertent Out-of-Network Services:  

a. Cap on Changes: For Medically Necessary Services, as defined under the Emergency Medical Treatment and Active Labor Act (EMTALA), (a) an out-of-network “Provider” (i.e., professional and facility) may not bill the patient in excess of the patient’s in-network co-payment, deductible or co-insurance; and (b) the Provider may bill the carrier.  

“Inadvertent Out-Of-Network Services” are treated in the same manner as Emergency and Urgently Needed Treatment, and are subject to the foregoing cap. “Inadvertent Out-of-Network Services are those services provided to a patient when treated by an out-of-network provider at an in-network facility and in-network services were unavailable. The foregoing would include a scenario where laboratory testing is ordered by an in-network provider, but performed by an out-of-network analytical laboratory.  

b. Carrier Dispute of the Billed Charges: Carriers must notify, within 20 days of the receipt of the Provider’s billed charges, that the Carrier believes that the billed claim is excessive. The Carrier and the Provider shall, within thirty (30) days, reach a settlement, or the carrier, provider or patient may move for binding arbitration.  

D. General Provisions (applicable to professionals and facilities, non-emergency and emergency/urgently-needed services).

a. Website Notice: Each Facility, on its website, must indicate which benefit plans they participate in, along with the names and contact information (address and phone number) of physicians employed by the Facility or providing services at the Facility, and which plans these physicians participate in. Facilities must also include a statement on their website which states:  

Physician services provided in the Facility are not included in the Facility's charges. Physicians, who provide services in the Facility, may or may not participate with the same health benefits plans as the Facility. The Patient should check with the physician arranging for the Facility services to determine in/out-of-network status of the health benefits plans in which the physician participates. The Patient should contact their carrier for further consultation on those costs.  

b. Additional Providers: Providers must supply the names, practice names, addresses and phone numbers of any provider scheduled to perform anesthesiology, laboratory, pathology, radiology and assistant surgeon services.  

c. Provider Mandated Education: Providers must educate patients on how to determine which plan the patient participates in, and how to connect with carriers for additional information.  

d. Change in Network Status: All changes must be reflected on the website within 20 days. If there is a change in network status for a Facility/Provider, then, depending on where the patient is in their course of treatment, the bill would impose different notification requirements for informing the Patient.  

i. Prior to Treating the Patient: If the change occurs between scheduling and treatment commencing, the Provider must notify the Patient.  

ii. Pre-Authorization for Treatment Given: If services are pre-authorized and the network status of the Provider/Facility changes, the carrier must notify the patient; however, if that notice occurs less than 30 days prior to the date of service, then the patient responsibility portion is limited to what would have been their in-network responsibility.  

E. Carrier Responsibilities: Carriers must provide patients with: (a) a clear and understandable description of the plan’s out-of-network benefits, including the methodology used for determining out-of-network services, (b) the amount the plan will reimburse under that methodology, (c) examples of out-of-pocket costs for frequently billed out-of-network services, (d) information, in both writing and online, that allows a patient to calculate the anticipated out-of-network costs in a given geographic region or zip code, (e) in/out-of-network status of a provider upon request, and (f) a phone hotline for in/out-of-network status and costs, operating no less than 16 hours per day.  

F. Penalties: Penalties for violations of the Act are: (a) Providers/Carriers face $1,000 per violation per day, up to $25,000 for each occurrence, (b) all other persons/providers face $100 per violation per day, up to $2,500 for each occurrence.  


Mohamed H. Nabulsi, Esq., Shareholder
Mandelbaum Salsburg P.C.
3 Becker Farm Rd., Suite 105, Roseland, NJ 07068
t. (973) 736.4600 x345  |  f. (973) 325.7467
d. (973) 243.7933
c. (973) 979.1150