New Jersey passes law fighting surprise medical billing: 8 things to know

New Jersey Democrat Gov. Phil Murphy signed legislation May 31 to combat surprise out-of-network medical expenses.

Here are eight things to know about the legislation:

1. The legislation, Assembly Bill No. 2039, addresses New Jersey's healthcare delivery system in terms of out-of-network billing and arbitration, as well as disclosure and transparency, according to the governor.

2. Under the bill, healthcare facilities and professionals are required to tell non-emergency patients up front whether the provider is in their insurance network. Healthcare facilities and professionals also are required to provide these patients with an estimate of fees when requested, among other requirements. 

3. The legislation also changes provider billing practices for "emergency or urgent" out-of-network care. It specifically sets limits on how much a provider may charge in excess of a deductible, copayment or coinsurance amount the patient would pay within their insurance network, according to the governor.

4. Additionally, the legislation provides a path to resolve out-of-network billing disputes through arbitration. An arbitrator would ultimately decide disagreements between insurers and providers regarding reimbursement for care rendered.

5. Mr. Murphy praised the legislation: "We're closing the loophole and reining in excessive out-of-network costs to prevent residents from receiving that 'big surprise' in their mailbox. At the same time, we're making healthcare more affordable by ensuring these costs are not transferred to consumers through increased health premiums."

6. Supporters of the bill, including advocates for patients, senior citizens, labor unions and businesses, said they are also pleased with the law, hailing it as the strongest such law in the U.S., NJ Spotlight reports.

7. But some physicians, especially specialists, have expressed concerns about the legislation, saying it will negatively affect their negotiating power with insurers, patient care and their revenue, according to the Spotlight. 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."

8. New Jersey's governor signed the bill nearly two months after lawmakers passed surprise billing legislation. It becomes effective 90 days after enactment.

Read the full Spotlight report here.


More articles on healthcare finance:

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Cleveland Clinic looks to rein in costs as Q1 operating income dips 22%
Pennsylvania hospital accused of overbilling state by $9M

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