6 I Fall 2018 www.anjc.info date care Q&A Legislative Update Legal Ease rship Director’s UPDATE Legal Q&A By Jeffrey Randolph ANJC Legal Counsel As you are aware, on June 1, New Jersey Governor Phil Murphy signed into law bills S.485/ A.2039 more commonly known as the “Out-of- Network Law” which took effect on August 30. The new law targeted “surprise bills” patients may receive when they treat at an in-network hospital emergency department that has out-of-network healthcare providers such as anesthesiologists or radiologists. Though hospitals were the primary target of the law, the law also affects outpatient healthcare providers such as chiropractic physicians. This author has previously written an article on the enhanced disclosures required by the Out-of-Network Law. This article will now focus on the new negotiation and arbitration process set up under the law for “inadvertent” or “involuntary” out-of-network charges to patients. The Out-of-Network Law prohibits balance billing patients for “inadvertent” or “involuntary” out-of-network claims above and beyond what the patient responsibility would be for in-network services. If a carrier deems a claim “inadvertent” or “involuntary” on the patient’s part (i.e. the required disclosures were not made to the patient under the law), a new negotiation and arbitration process was implemented by the new law. If a carrier receives a claim for “inadvertent” or “involuntary” out-of-network treatment, the claim is processed as follows. The carrier has 20 days to determine if charge is excessive and they are obligated to remit payment to the healthcare provider for what it determines is not excessive (known as the “allowed amount”). If the provider does not accept the allowed amount, they must notify the carrier of their “intent to reject” the payment within seven days of receipt of the Explanation of Benefit (“EOB”) form via certified mail, email or online submission. This begins a 30-day time period to negotiate with the carrier. If the provider and the carrier negotiate and agree upon an increased allowed amount in this 30-day period, the carrier must pay the agreed upon allowed amount within 30 days of settlement. In addition, the carrier must issue a final EOB with the settled allowed amount to both the provider and the patient showing the initial allowed amount, negotiated allowed amount, and the patient’s cost sharing obligations under both scenarios. If a negotiated settlement cannot be reached with the carrier, within seven days of the expiration of the 30-day negotiation period, the carrier must issue a “Pre-Arbitration EOB” to both the provider and patient detailing: 1) no negotiated settlement was achieved in the 30-day period; 2) the initial allowed amount and cost sharing of the patient; 3) the final offer by the carrier and final cost sharing of the patient; and 4) the additional amount proposed to be paid by the carrier’s final offer and patient’s cost sharing responsibility; and 5) notice that the patients’ cost sharing will not increase even if arbitration is pursued. Arbitration can thereafter be pursued by the parties for any out-of-network claims for dates of service after August 30, 2018. The carrier, provider, or patient can initiate arbitration within 30 days of the final offer from the carrier if certain criteria are met. A claim, to be eligible for arbitration, must meet all of the following: 1) the claim concerns a fully-funded plan or a self-funded plan that has opted into the program; 2) the difference between the carrier’s final offer and provider’s final demand is $1,000 or higher; 3) all preauthorization and notice requirements were complied with; 4) no issues of medical necessity, experimental or investigational coverage, or other non-fee related issues need to be addressed; 5) a patient consent and authorization for release of medical records is included with the arbitration demand; and 6) no more than 30 days has passed since the carrier’s final offer. The following process for arbitration will occur (“Baseball Arbitration”) under the new law: 1) the decision will be issued within 30 days of receipt of complete arbitration demand by Maximus by an AAA certified arbitrator; 2) the decision must accept the final offer of either the carrier or provider as the amount awarded (the arbitrator cannot “split the baby” and issue their own determination); 3) the decision will split the costs of arbitration between the carrier and provider unless the arbitrator decides the carrier did not act in good faith; 4) no attorney’s fee or cost shifting is permitted as in PIP arbitrations; 5) the decision is binding on all parties with very limited appeal rights; 6) the carrier must pay the awarded amount within 20 days of decision or pay 12 percent interest per annum for a maximum of 150 days; and 7) the carrier must notify the patient of the arbitration decision via a final EOB. This is a summary of the new negotiation and arbitration process under the new Out-of-Network Law for “inadvertent” or “involuntary” out of network claims. As the new process has not begun yet and the above summary is based only upon a New Jersey Department of Banking Advisory, specifics of the program may change as time passes and the ANJC will keep members updated of any changes to the program. The Negotation & Arbitration Process under the New OUT-OF-NETWORK LAW