S504

An Act concerning health care network inclusion, supplementing P.L.1997, c.192 (C.26:2S-1 et seq.), and making an appropriation.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. This act shall be known and may be cited as the “Fair Access to Health Care Networks Act.”

2. The Legislature finds and declares that:

a. Many New Jersey-licensed health care facilities and provider entities regulated by the State are unjustly excluded from participation in health insurance networks.

b. Exclusion from networks severely limits patient choice and access to local, community-based care at various entities, including ambulatory surgical centers, adult medical daycare facilities, diagnostic labs, imaging centers, and physician-owned practices.

c. Insurance companies often contract with large hospital systems at significantly higher rates, while ignoring smaller, cost-effective providers that offer comparable or superior quality of care.

d. Patients are increasingly enrolled in managed care and Medicare Advantage plans, which limit access to out-of-network care, further harming licensed providers and diminishing consumer choice.

e. To promote equity, access, and competition in the health care system, all State-licensed health care facilities and provider entities should have the legal right to participate in health insurance networks on non-discriminatory terms.

3. As used in this act, “carrier” means an insurance company, health service corporation, hospital service corporation, medical service corporation, or health maintenance organization authorized to issue health benefits plans in this State, and shall include the State Health Benefits Program, and the School Employees' Health Benefits Program.

4. a. A carrier shall accept into its provider network any health care facility or provider entity licensed or otherwise regulated by the State and in good standing upon application by the facility or provider entity.

b. This shall include, but not be limited to, the following facilities and provider entities:

(1) adult medical day care centers;

(2) ambulatory care centers;

(3) ambulatory surgical centers;

(4) diagnostic and blood laboratories;

(5) imaging centers;

(6) nursing homes and skilled nursing facilities;

(7) private practice offices of health care professionals authorized to open private practices; and

(8) any other health care facility or provider entity licensed or otherwise regulated by the State.

c. (1) A carrier shall have 90 days to:

(a) respond to an application submitted by a health care facility or provider entity for inclusion in its provider network; and

(b) upon approval of the application, complete credentialing for the facility or entity to be considered part of the network of the carrier.

(2) Failure to complete the process as provided in paragraph (1) of this subsection shall result in automatic provisional network inclusion of the health care facility or provider entity until the carrier renders a decision on the submitted application.

5. a. A carrier shall reimburse all health care facilities and provider entities in the network of the carrier at a rate no less than 200 percent of the applicable Medicare reimbursement rate for equivalent services rendered, unless the facility or entity agrees to a different rate.

b. A carrier shall disclose all reimbursement rates in writing upon the issuance of a credential to participate in the network of a carrier and shall be updated annually.

6. a. An individual covered by a health benefits plan offered by a carrier authorized to provide insurance in the State shall have the right to receive in-network benefits at any health care facility or provider entity licensed or otherwise regulated by the State that is willing to accept the reimbursement rate as offered by the carrier.

b. A carrier shall not exclude a health care facility or provider entity based on ownership structure, size, or affiliation status with a hospital system.

7. a. The Department of Banking and Insurance shall oversee compliance with this act.

b. A carrier found in violation of the provisions of this act shall be subject to a civil penalty of up to $25,000 per violation, and may be subject to additional sanctions, including suspension or revocation of any license or other credential issued by the State. The penalty shall be collected by the commissioner in the name of the State in a summary proceeding in accordance with the “Penalty Enforcement Law of 1999,” P.L.1999, c.274 (C.2A:58-10 et seq.).

c. A health care facility or provider entity shall have the right to appeal any exclusion decision or rate-setting through an expedited hearing process before an administrative law judge.

8. There is appropriated from the General Fund the sum of $2,000,000 to the Department of Banking and Insurance to administer and enforce the provisions of this act.

9. This act shall take effect immediately and shall apply to all carrier network contracts or agreements entered into or renewed on or after January 1, 2026.

STATEMENT

This bill requires a carrier authorized to operate in this State to accept into its provider network any health care facility or provider entity licensed or otherwise regulated by the State and in good standing upon application by the facility or provider entity. “Carrier” is defined in the bill to mean an insurance company, health service corporation, hospital service corporation, medical service corporation, or health maintenance organization authorized to issue health benefits plans in this State, and is to include the State Health Benefits Program, and the School Employees' Health Benefits Program. The health care facilities and provider entities captured in the bill include, but are not limited to: 1) adult medical day care centers; 2) ambulatory care centers; and 3) private practice offices of health care professionals authorized to open private practices.

The bill establishes an application process by which a carrier is to follow to review the eligibility of a health care facility or provider entity. Additionally, under the bill, it is required that all health care facilities and provider entities in the network of a carrier be reimbursed at a rate no less than 200 percent of the applicable Medicare reimbursement rate for equivalent services rendered, unless the facility or entity agrees to a different rate. The reimbursement rates are to be disclosed in writing upon the issuance of a credential to participate in the network of a carrier and are to be updated annually.

Moreover, the bill stipulates that an individual covered by a health benefits plan offered by a carrier authorized to provide insurance in New Jersey is to have the right to receive in-network benefits at any health care facility or provider entity licensed or otherwise regulated by the State that is willing to accept the reimbursement rate as offered by the carrier. A carrier is prohibited in the bill from excluding a health care facility or provider entity based on ownership structure, size, or affiliation status with a hospital system.

The Department of Banking and Insurance is to oversee compliance with the provisions of the bill and is to be appropriated from the General Fund the sum of $2,000,000 to administer and enforce the provisions. A carrier found in violation of the bill is to be subject to a civil penalty of up to $25,000 per violation, and may be subject to additional sanctions, including suspension or revocation of any license or other credential issued by the State. A health care facility or provider entity is granted the right to appeal any exclusion decision or rate-setting through an expedited hearing process before an administrative law judge.

In New Jersey, many health care facilities and provider entities face exclusion from health insurance carrier networks. The bill intends to broaden access to health care services for patients, widen streams of revenue available for providers, and prevent hospitalization as the only option for certain patients.