NJ Out-of-Network Consumer Protection Act

The “Out-of-Network Consumer Protection, Transparency, Cost Containment, and Accountability Act.” [(Senator Joseph Vitale (D-19), Assemblyman Gary Schaer (D-36), Assemblyman Troy Singleton (D-7), and Assemblyman Graig Coughlin (D-19)] would implement sweeping legislation to reform various aspects of the New Jersey health care delivery system by: increasing transparency in pricing for health care services; enhancing consumer protections; creating an arbitration system to resolve certain health billing disputes; containing rising costs associated with out-of-network healthcare services; and, measuring success accordingly.

The  legislation would enhance employee rights and protections as patients and save an estimated $1.0 billion according to the sponsors. Others, including the New Jersey Association of Counties, (NJAC) are concerned that the measure may initially increase the costs of health benefits plans as the bill would impose an annual surcharge on all plans to fund operation and administrative expenses of a Healthcare Price Index (HPI). In summary, the HPI would: identify and electronically publish the list of median in-network paid commercial claims for the payment range as established under the bill; and, make healthcare data available to the State to improve healthcare quality, reduce healthcare costs, and increase pricing transparency.  Although in general it appears that the bill does directly apply to counties enrolled in the State Health Benefits Plan (Atlantic, Camden, Gloucester, Hudson, Mercer, Ocean, Salem, Sussex, and Warren), the annual surcharge imposed by the legislation would in fact impact all health benefit plans and counties.

Hence several recommendations have been put forth:  1) use an existing federal database on medical care to eliminate the need for a New Jersey specific HPI and corresponding surcharge; or, 2) establish  a New Jersey specific HPI as called for under the bill, but eliminate the surcharge, allocate a one-time State appropriation to establish the Health Price Index Fund, and dedicate monies collected from violations of the Act to the Fund for operation and administrative expenses.  NJAC is further seeking a clarification on whether the surcharge would impact health benefit plan expenses under the looming “Cadillac Tax” for high-cost employer-sponsored health benefits coverage set to begin 2018 at $10,200 for individual coverage and $27,500.000 for all other coverage tiers.