Summary#
A-5685, titled “Prohibits health insurance carriers from assessing administrative fees or penalties on in-network health care facilities for providing inadvertent out-of-network services,” is an introduced bill that would supplement New Jersey’s P.L. 2018, c. 32. Its stated goal is to stop carriers from charging those fees or penalties when an in-network facility provides inadvertent out-of-network services; the bill is not law, and passage is uncertain.
- A health insurance carrier would be prohibited from assessing an administrative fee or penalty on an in-network health care facility for providing those services to a covered person.
- A violation would count as an unfair trade practice and be subject to penalties under existing state law.
- The bill’s statement describes inadvertent out-of-network services as covered services provided by an out-of-network provider when a covered person uses an in-network facility and in-network services are unavailable there for any reason. It includes lab testing ordered by an in-network provider and performed by an out-of-network lab.
- The bill would take effect 90 days after enactment. It would apply to policies and contracts issued, executed, delivered, or renewed on or after enactment.
What it means for you#
- In-network health care facilities: A carrier could not assess an administrative fee or penalty on your facility for providing the specified services to a covered person.
- Health insurance carriers: You would have to follow that prohibition for policies and contracts covered by the bill. A violation would be subject to unfair-trade-practice penalties.
- Covered people: The bill does not directly change your coverage, what you pay, or how much a provider is reimbursed. It concerns fees or penalties charged by carriers to in-network facilities.
Money#
No cost estimate is available in the supplied material.
- The bill does not set aside public money or specify staffing or enforcement costs.
- Carriers could lose revenue from fees or penalties they would otherwise assess; the amount is unknown.
- The bill makes violations subject to penalties under existing law, but the penalty amounts are not given in the supplied bill text.
What is unclear#
- The bill does not define “administrative fee” or “penalty,” or explain how those terms apply to different carrier charges.
- The parent Act, P.L. 2018, c. 32, was not supplied, so the bill’s full interaction with current law and any definitions or procedures in that Act could not be verified.
- The bill does not describe how violations would be reported or investigated, who would enforce the prohibition, or how a facility could challenge a charge.
- It does not explain how the prohibition would interact with existing contracts or other rules about payment for these services.
Case for#
- The bill appears intended to prevent facilities from facing carrier fees or penalties when covered services are unavailable in-network at the facility and an out-of-network provider supplies them.
- A possible argument for the bill is that a facility should not be penalized for an out-of-network service that occurs in the circumstances described, including when an in-network provider orders a test performed by an out-of-network lab.
- Making a violation an unfair trade practice gives the prohibition a stated legal consequence, rather than leaving it as a goal alone.
Case against#
- One concern is that “administrative fee” and “penalty” are not defined in the bill, leaving unclear which carrier charges are prohibited.
- The bill does not set out a complaint or review process, so facilities and carriers may lack clear guidance on how a disputed charge would be handled.
- It is unclear how the prohibition would affect carrier costs or other contract terms; the bill provides no estimate of those effects.