In less than three months, a new law to prevent surprise out-of-network billing charges will take effect in New Jersey, after a decade of debate in the state’s Legislature.

Gov. Phil Murphy (D) signed A-2039, now P.S. 2018, c.32, on June 1, starting a 90-day countdown before the law formally goes into effect.

The law aims to protect consumers against surprise bills for out-of-network services by requiring health-care facilities to provide better information to patients before they undergo medical procedures or receive receive health-care services.

Yet a myriad of questions remain around the law’s provisions on transparency, arbitration, and billing, leaving doctors, hospitals, and insurers in the Garden State on their own to figure out the best way to comply with the new law.

“There is still considerable confusion and misinformation as to what this law really means, and how it impacts our industry,” Jeff Shanton, president of the New Jersey Association of Ambulatory Surgery Centers, wrote in a blog post on the group’s website shortly after Murphy signed the bill.

Hammering out the regulations and guidelines needed to implement the new law will most likely take much longer than 90 days to complete, New Jersey health-care and insurance groups told Bloomberg Law.

“There are a whole range of issues that need to be addressed,” Wardell Sanders, president of the New Jersey Association of Health Plans, the state trade association that represents the major health plans in New Jersey, told Bloomberg Law June 8.

For insurers, some of the unanswered questions are straightforward, such as nailing down the effective dates for new reporting requirements. Others questions are more complex—for example, how will the law apply to a New Jersey insurer when a patient seeks medical treatment out-of-network in another state?

Guidance Needed

Devising new regulations that cover every aspect of the new law will likely take “months and months and months,” Sanders said. In the meantime, stakeholders in New Jersey’s health-care community are “issue-spotting” to identify areas where guidance is needed, he said.

Compliance bulletins and interim guidance will need to come from several different agencies: The Department of Banking and Insurance for insurance carriers and billing questions, the Department of Health for hospitals, and various licensing boards for doctors, therapists, and other medical professionals.

In the meantime, the New Jersey Hospital Association is already putting together checklists for its members to help intake personnel at hospitals make sure they ask the right questions and gather all the information that transparency provisions in the new law prescribe, according to Neil Eicher, the group’s vice president for government relations and policy.

One small example with big consequence: The new law requires that some sort of symbol appears on a patient’s insurance card so that the hospital will immediately know whether the patient’s insurance carrier is covered by the new law, Eicher told Bloomberg Law. Yet until those new cards are rolled out, the hospital still needs to take care of patients. If the right information isn’t collected, will the hospital be fined?

“We’re trying to do the right thing, but that’s an example of an issue that needs to be worked out through the regulatory process,” Eicher said.

Administrative Burden

In terms of transparency, doctors, hospitals, and insurance companies are going to “have to do a better job of explaining” the cost of procedures to patients, Mishael Azam, chief operating officer and legislative affairs manager of the New Jersey Medical Society, told Bloomberg Law June 6. “It’s definitely going to be an administrative burden for all three.”

The law requires, for example, that providers supply an estimate of fees to patients who request it. But explaining the cost of a procedure poses difficulties for doctors, since the end cost to the patient differs depending on how the patient is insured, Azam said.

Given that the new law imposes penalties for failing to be transparent, the society will be looking for more guidance and clarity about how to communicate such information, she said. “We want to make sure when it’s rolled out that it’s done correctly and that people aren’t punished for not giving information that they can’t control.”

The law puts new requirements on out-of-network hospitals or doctors to make sure they’re billing correctly, Mark Manigan, a member of Brach Eichler’s Health Law Practice Group in Roseland, N.J., told Bloomberg Law June 6.

If an out-of-network provider doesn’t properly collect the copay or deductible, they could face penalties or fines. “They’re going to have to be more vigilant in collecting cost-sharing amounts for patients,” he says.

And without clear regulations or guidance on some of the terms in the new law, Manigan says, there could be a “litigation bonanza” over billing.

Arbitration Provision

The new law’s arbitration provision for billing disputes could itself be a source of confusion.

The law’s binding arbitration procedure uses a baseball-style final offer method in which an arbitrator chooses between two proposals submitted by the parties.

It remains unclear whether the new arbitration system will apply to federally regulated insurance programs, the medical society’s Azam said. The New Jersey Medical Society fought against the law’s arbitration provisions for fee disputes, arguing that they were crafted unfairly to drive down doctor pay.

Seventy percent of New Jersey residents are covered by federally regulated insurance programs, such as self-insured plans for unions and large companies. State laws do not cover federally insured plans, although the new law for out-of-network billing allows self-insurers and other federally regulated plans to opt into the state scheme.

Questions remain about what this means for arbitration between providers and federally regulated insurers, Azam told Bloomberg law in an interview June 6. If a patient is covered by a federally regulated insurance program, would their insurer even be eligible to participate in the arbitration program under the new state law?

The end result of the law could be to bring more doctors into networks, Azam said. The law requires that insurance companies regularly self-audit their networks, a process that might reveal gaps that need to be filled, she said. “We have long argued that more doctors need to be brought into the network,” she said. “We have always said this is an in-network problem, not an out-of-network problem.”