Menu Close

NJ Assembly Committee Recommends Binding Arbitration for Out-of-Network Payment Disputes

Posted in Hospitals and Institutions, Legislation and Public Policy, Private Insurers, Reimbursement Matters, State Matters

On November 23, the Financial Institutions and Insurance Committee of the New Jersey State Assembly recommended the passage of legislation aimed at increasing pricing transparency for healthcare services and establishing a mechanism to resolve certain out-of-network reimbursement disputes.

Bill number A952, the “New Jersey All-Payer Claims Database Act,” is a companion to bill number A4444, the “Out-of-network Consumer Protection, Transparency, Cost Containment and Accountability Act” (previously discussed here). The new bill intends to establish binding arbitration as the means for resolving payment disputes among insurance carriers and out-of-network healthcare providers in connection with reimbursement for services provided by such out-of-network providers. Under the proposed legislation, out-of-network providers and insurance carriers will be required to submit reimbursement disputes to binding arbitration if negotiations among the parties regarding reimbursement fail.

The proposed legislation will also require the New Jersey Department of Banking and Insurance (DOBI) to publish on its website a list of arbitration decisions rendered during each calendar year. With respect to each arbitration decision, the list will identify the arbitration award amount, whether the prevailing party was an insurance carrier or an out-of-network healthcare provider, and the practice area of the provider involved. DOBI’s list of arbitration decisions will not include any identifying information related to any healthcare provider, insurance carrier or patient involved in any arbitration decision.
The proposed legislation in bill number A952 was first introduced in the State Assembly earlier this year and has faced criticism. Many healthcare providers have argued that binding arbitration favors insurance carriers who will be involved in arbitration proceedings more frequently and, therefore, will be more familiar with the procedures. The next stop for the bill is the full State Assembly and the State Senate for a vote.

Leave a Reply

Your email address will not be published. Required fields are marked *