Sponsored by:
Assemblyman ROY FREIMAN
District 16 (Hunterdon, Mercer, Middlesex and Somerset)
SYNOPSIS
Establishes arbitration and notification process for health insurance carriers and provider networks when dispute arises over maintaining providers as in-network.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning certain arbitration agreements and supplementing P.L.1997, c.192 (C.26:2S-1 et seq.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. If a carrier and provider that is in the carrier’s network of providers attempt to negotiate a network contract where the terms regarding pricing and reimbursement are in dispute and negotiations do not result in a resolution, the carrier or provider may initiate binding arbitration to determine the terms of the provisions of the contract regarding pricing and reimbursement.
b. The binding arbitration shall adhere to the following requirements:
(1) The party requesting arbitration shall notify the other party that arbitration has been initiated and state its final offer before arbitration. In response to this notice, the other party shall inform the party initiating the arbitration of its final offer before the arbitration occurs;
(2) Arbitration shall be initiated by filing a request with the department;
(3) The department shall contract, through the request for proposal process, every three years, with one or more entities that have experience in health care pricing arbitration;
(4) The arbitration shall consist of a review of the written submissions by both parties, which shall include the final offer for the pricing and reimbursement by the carrier for the provider network and the final offer by the provider network for the pricing and reimbursement that will be accepted from the carrier; and
(5) The arbitrator's decision shall be one of the two offers submitted by the parties as their final offers and shall be binding on both parties. The decision of the arbitrator shall include detailed written findings and shall be issued within 30 days after the request is filed with the department. The detailed written findings shall be an analysis of the decision including, but not limited to, information concerning any databases, previous awards, or other documentation or arguments that contributed to the arbitrator's decision. The arbitrator's expenses and fees shall be split equally among the parties except in situations in which the arbitrator determines that the payment made by the carrier was not made in good faith, in which case the carrier shall be responsible for all of the arbitrator's expenses and fees. Each party shall be responsible for its own costs and fees, including legal fees if any.
2. a. If a dispute remains between a carrier and provider in the carrier’s network of providers and arbitration pursuant to section 1 of this act is not initiated at least 60 days prior to the expiration of the contract between the carrier and provider, arbitration shall automatically be initiated.
b. Thirty days prior to open enrollment of the current plan year in which there is a dispute between a carrier and a provider, notice that the provider in the dispute will be out-of-network as of the commencement of the next plan year shall be issued, in a form and manner as determined by the Commissioner of Banking and Insurance, to the insured of the carrier.
c. Reimbursement for health care services offered by the provider shall continue without alteration by the carrier until the first day of the next plan year.
3. This act shall take effect immediately.
STATEMENT
This bill establishes a binding arbitration process for when carriers and providers that are in the carrier’s network of providers are in dispute. Specifically, when carriers and provider are in dispute over pricing and reimbursement and negotiations to resolve the dispute have failed, the bill allows either party to initiate binding arbitration to determine the terms of the provisions of the contract regarding pricing and reimbursement. Among the items the bill stipulates with regards to the arbitration is 1) that the arbitration be initiated by filing a request with the Department of Banking and Insurance; 2) the party requesting arbitration is to notify the other party that arbitration has been initiated and state its final offer before arbitration and in response, the other party is to inform the party initiating the arbitration of its final offer; and 3) the arbitrator's decision is to be one of the two amounts submitted by the parties as their final offers and is to be binding on both parties.
Under the bill, if a dispute remains 60 days prior to the expiration of a contract between a carrier and provider and arbitration is not initiated, arbitration shall automatically be initiated. Reimbursement for health care services offered by the provider in the dispute are to continue without alteration until the first day of the next plan year. Thirty days prior to open enrollment of the current plan year in which there is a dispute between a carrier and a provider, notice that the provider in the dispute will be out-of-network as of the commencement of the next plan year is to be sent to the insured of the carrier.