Price transparency has been a “buzz phrase” for the pharmaceutical industry for the last several years. However, the state of New Jersey is looking to expand the transparency conversation to cover all healthcare costs.
On June 1, 2018, New Jersey Governor Phil Murphy signed Assembly Bill No. 2039 into law, which will require healthcare facilities and providers to give patients information on network status prior to non-urgent care delivery. In addition, organizations and providers will have to provide a disclaimer to patients regarding their patient financial responsibility for additional out-of-network (OON) fees.
The law follows nearly a decade of deliberation in the state and is expected to have wide-ranging impacts, including impacts on health care facilities, individual health care professionals, insurance carriers, and in some instances, self-funded plans. It is not expected to impact the government providers of Medicaid, Medicare, and TRICARE.
Generally, health care facilities and providers are not permitted to bill a covered person for inadvertent, emergency, or urgent OON services above that person’s deductible, copayment, or coinsurance amount applicable to in-network services under his or her health care plan.
However, the new law allows a covered person to elect an OON provider for a health care service, as long as the person “knowingly, voluntarily, and specifically” selects the OON provider with full knowledge that the provider is OON. Additionally, the covered person must have had the opportunity to select an in-network provider but selected the OON provider instead. Providers that regularly deliver services on an OON basis that may be subject to the Law should plan on developing policies and procedures to ensure that the full knowledge standard and the in-network provider opportunity are met prior to the delivery of services.
Health Care Facility Requirements
The law also imposes new disclosure requirements, including the requirement that health care facilities disclose whether the facility is in-network prior to scheduling a non-emergency or elective procedure with a covered person. Facilities must also advise the covered person to (i) ask his or her physician whether the physician is in-network or OON and (ii) contact his or her carrier for further consultation on costs.
Adding to the transparency discussion is the requirement that facilities make available to the public a list of the facility’s standard charges for all items and services provided by the facility, consistent with the Patient Protection and Affordable Care Act (PPACA). However, “standard charges” has not yet been defined and the federal government has not yet enforced this aspect of the ACA.
Additionally, health care facilities are required to post on their websites a list of health benefit plans in which the facility is a participating provider and a statement that individual physicians’ services are not included in the facility’s charges, along with a disclaimer that some physicians may not participate in the same health benefit plans as the facility. Facilities must notify covered persons promptly if the facility’s network status changes with respect to their health benefit plan, though there is no specific plan for how the facility must provide the notice.
Health Professional Requirements
Similar to health care facilities, individual health care professionals are required to disclose the health benefit plans with which he or she participates prior to engaging a covered person in non-emergency services. If a health care professional does not participate in the covered person’s health benefit plan, the health care professional must inform the patient that the professional is OON. In this situation, the professional must provide a covered person with both a billing estimate and the associated Current Procedural Technology (CPT) codes, if requested. A professional must also disclose to a covered person that the covered person has a financial responsibility to pay for services provided by an OON professional.
The new requirements are set to go into effect 90 days after enactment, on or around August 27, 2018. This means all stakeholders should be working on a plan to successfully navigate the new landscape.
Carrier and Self-Funded Plan Requirements
The law requires all carriers to update their websites within 20 days of adding or terminating providers from the carrier’s network, or if a physician’s affiliation with a particular facility changes. Each carrier is also required to provide all covered persons with a clear and understandable description of the plan’s OON health care benefits, including the methodology used to determine the amount allowed for OON services and the amount of reimbursement available; examples of anticipated out-of-pocket costs for frequently billed OON services; written and online information that reasonably permits a covered person to calculate anticipated out-of-pocket, OON costs; information concerning whether a particular provider is in-network; and access to a consumer telephone hotline for questions about network status and out-of-pocket costs.
Carriers must also notify covered persons if the network status of a particular facility or provider changes after the carrier authorizes a health service from that facility or provider, though the law does not specify how timing or method of notice must be done.
Additionally, all carriers must calculate anticipated savings resulting from the reduction in OON claims payments and must pay for an annual audit of its provider network by an independent auditing firm to assess the carrier’s compliance with the law. Those audit results must be submitted to the Health Commissioner, who will in turn display the results on the state’s Department of Health website. If a carrier does not achieve provider network adequacy as defined in the law, it could be subject to penalties.
Reaction and Statements
On the day he signed the legislation into law, Governor Murphy made a statement, “Today, we’re closing the loophole and reigning in excessive out-of-network costs to prevent residents from receiving that ‘big surprise’ in their mailbox. At the same time, we’re making health care more affordable by ensuring these costs are not transferred to consumers through increased health premiums.”
“No one likes to be blindsided. But that’s what’s been happening to residents who did not know they were getting out-of-network medical care until they received a bill in the mail,” said Assembly Speaker Craig Coughlin. “Residents should have the final say over what health care services make the most sense for them financially, and now thanks to this law, they will. This is about transparency, keeping health care affordable and protecting the rights of healthcare consumers. Health care is expensive. Residents have a right to know what they are financially responsible for ahead of time; not afterwards when they have no recourse. This law will help provide that.”
Not everyone is happy with the legislation, however. Some physicians have expressed concerns about the legislation, saying it will negatively affect their negotiating power with insurers, patient care and their revenue. Peter DeNoble, MD, an emergency physician and president of the New Jersey Doctor-Patient Alliance, said: “The law opens up a lot of uncertainty in the healthcare market. That trickles down to an access-to-care problem.”
“Lots of physicians want to join insurance networks but can’t because of they’re not offered adequate reimbursement rates,” said John Fanburg, chair of the health care practice at law firm Brach Eichler. “[So] forcing them to is not good for health care in the state.” He also warned that the bill could prompt independent physicians to retire.