Balance Billing Laws in New Jersey to Protect Patients from Surprise Medical Bills

New Jersey has enacted balance billing laws to protect citizens from surprise medical bills by requiring advance notice when providers are out of network.

New Jersey Gov. Phil Murphy recently signed into law several balance billing laws known collectively as the Out-Of-Network Consumer Protection, Transparency, Cost Containment and Accountability Act. In New Jersey, around 168,000 consumers receive surprise out of network medical bills totaling $420 million every year. The new balance billing laws aim to reduce these unmanageable costs and alleviate some of the health care burden some New Jersey citizens are struggling with.

“Today, we’re closing the loophole and reigning [sic] 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,” Gov. Murphy said in a statement, according to Law360.

Under the new balance billing laws, providers are required to inform nonemergency patients about their in network or out of network status before the patient receives services. Medical providers are now required to have public postings of price charges, and patients must receive a price estimate upon request. The balance billing laws also includes new disclaimer about patient responsibility for paying out of network costs.

For emergency situations, health providers are limited in the amount they can charge in excess of a deductible, copay, or coinsurance amount for in network costs.

The balance billing laws also include new restrictions for insurance companies. Insurers now must provide written notice of network changes as well as detailed information on out of network services. The companies are also required to maintain a telephone hotline for consumer questions.

Patients have a new benefit under the balance billing laws with a newly assigned arbitrator. With this change, consumers will not have to worry about mediating between the doctor’s office and the insurance company.

The New Jersey Business & Industry Association (NJBIA) praised the new balance billing laws for bringing “much needed control” to the cost of health care.

“These costs have risen to an average of almost $22,000 a year for family coverage and threaten the ability of employers to continue to provide quality health benefits to their employees,” states NJBIA President and CEO Michelle Siekerka, speaking to Law360.

Local politicians have also voiced their support of the balance billing laws. The act was sponsored by New Jersey Assembly Speaker Craig Coughlin, state Senator Joseph Vitale, and Assembly Members Gary Schaer and Pamela Lampitt.

“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,” Coughlin told Law360. Vitale also lent his support, saying that the legislation has been years in the making and that “unanticipated health care charges will be a thing of the past”.

Despite vocal support of major political powers, local hospital advocates and physicians opposed the new balance billing laws, particularly the assignment of an arbitrator. These groups claim that the new laws will undermine their negotiating power with insurance companies, driving providers to less regulated states.

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