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How New Jersey Assembly Bill 2039 Aims to Curb “Surprise” Out-of-Network Charges

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New Jersey Governor signed Assembly Bill 2039 into law at the beginning of June. The conditions set up by AB 2039 are meant to help reduce surprise out-of-network medical costs that many face due to their insurance policies. The law goes into effect at the end of August 2018.

In-network and out-of-network medical services have long played a role in the selection of medical providers, as well as the cost of care. When a patient receives treatment from a healthcare provider that is outside the patient’s insurance network, the billing process differs.

As the insurance company will cover less for an out-of-network (OON) provider than an in-network provider, the patient will have to pay more of the costs. Sometimes, the gaps between OON and in-network bills can be substantial.

While precautions are in place to prevent excessive costs for necessary and urgent care in emergency situations, voluntary services don’t have the same legal considerations. A patient that received routine healthcare at an OON provider may not realize the difference – leading to surprising amounts when the associated bills come in the mail. In some cases, dealing with such an expense may put them in financial danger.

The purpose of Assembly Bill 2039 is to lower the risk of “surprise” out-of-network charges in the state. The law sets up regulations and laws that require healthcare facilities to inform patients of their network status when a patient is scheduling a non-emergency service.

In such situations, the healthcare provider must give a patient a billing estimate and access to Current Procedural Technology codes upon request. They also must advise the patient to consult with his or her insurance carrier about potential additional costs, along with many other disclosure requirements.

While this does not stop charges from happening if a patient selects an OON provider, it does put patients in a position to make informed decisions. When a patient knows the network status of their healthcare provider and the additional costs associated with it, then he or she can choose facilities suited to their financial needs.

Other requirements of AB 2039 involve facilities keeping an updated list of the health benefit plans they participate in on their websites, as well as information on individual physicians who may not participate in the same benefit plans. When a facility makes changes to a health benefit plan, it must also inform any patients covered by that plan of the update in status.

For New Jersey healthcare providers, the deadline for compliance is near. Facilities should have plans in place to appropriately inform their patients of their network status, as well as for providing potential costs and other requested materials.

All of these regulations are part of the movement towards more billing transparency in the world of medical billing. With the high costs that can come from medical services, it’s no wonder that people want to know their potential costs upfront. Many people hold similar concerns about the transparency of pharmacy and prescription prices.

The Patient Protection and Affordable Care Act also set regulations for transparency, requiring facilities to provide public lists of all standard charges for provided services and items. While the federal government hasn’t taken steps to enforce this regulation, it’s still sparked questions and discussion about how much patients should know about their potential medical costs up-front.

Many in the healthcare industry have considered AB 2039 controversial, citing concerns that the requirements would give insurance companies an unfair advantage when negotiating prices of specialist services. There are also concerns about patient care and revenue for healthcare providers. Discussion of AB 2039 took several years of debate before passing.

Not all physicians and healthcare providers are able to join insurance networks, often due to inadequate reimbursement rates. Situations like this are what motivate many providers to stay out-of-network. Some worry that the new regulations may force these facilities to join networks, adversely affecting the quality of their care.

The law does not require facilities to join a network, only to inform potential patients of their network status. So long as the patient willingly selects an OON healthcare provider over available in-network options, the rest of the care and billing process would proceed as usual.

“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,” said New Jersey Assembly Speaker Craig Coughlin. “This is about transparency, keeping health care affordable and protecting the rights of health care 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.”

Many other states are working to help residents have more informed knowledge of the costs of planned medical procedures. Like New Jersey, Colorado passed a law to encourage medical bill transparency earlier this year. The Colorado law requires providers to give patients public access to prices of the facility’s most common procedures and treatments.

Even if accurate costs may not be possible for an emergency services, there seems to be little reason that patients shouldn’t know the price of a non-emergency procedure in advance. AB 2039 is New Jersey’s step to make such transparency a reality.

“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,” said Governor Murphy on the day of signing the legislation. “At the same time, we’re making health care more affordable by ensuring these costs are not transferred to consumers through increased health premiums.”

With the cost of healthcare and insurance seemingly always on the rise, any acts that can help prevent that increase may become a boon for patients.

While we won’t see the full outcome of AB 2039 until it starts to go into effect, it is a signal of ongoing developments in medical billing. More states may consider similar laws that encourage billing transparency as time goes on, especially as the federal government continues to spur on industry changes.




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