Implementation of the Federal No Surprises Act

PHIL MURPHY

Governor

SHEILA OLIVER

Lt. Governor

State of New Jersey

DEPARTMENT OF BANKING AND INSURANCE

OFFICE OF THE COMMISSIONER

PO BOX 325

TRENTON, NJ 08625-0325

TEL (609) 292-7272

MARLENE CARIDE

Commissioner

Visit us on the Web at dobi.nj.gov

New Jersey is an Equal Opportunity Employer • Printed on Recycled Paper and Recyclable

BULLETIN NO. 21-14

TO:

ALL INSURANCE COMPANIES AUTHORIZED TO ISSUE HEALTH

BENEFITS PLANS, HEALTH MAINTENANCE ORGANIZATIONS,

HEALTH

SERVICE

CORPORATIONS,

HOSPITAL

SERVICE

CORPORATIONS, MEDICAL SERVICE CORPORATIONS, MULTIPLE

EMPLOYER WELFARE ARRANGEMENTS, THE STATE HEALTH

BENEFITS PROGRAM,

THE

SCHOOL

EMPLOYEES’

HEALTH

BENEFITS PROGRAM, ENTITIES PROVIDING HEALTH BENEFITS

PLANS, AND OTHER INTERESTED PARTIES

FROM:

MARLENE CARIDE, COMMISSIONER

RE:

IMPLEMENTATION OF THE FEDERAL NO SURPRISES ACT

The Out-Of-Network Consumer Protection, Transparency, Cost Containment, and

Accountability Act, P.L. 2018, c. 32 (codified at N.J.S.A. 26:2SS-1 to -20), (“NJ Act”), was

enacted on June 1, 2018, and became effective on August 30, 2018. More recently, on December

27, 2020, the No Surprises Act (“Federal Act”), as part of the Consolidated Appropriations Act

(“CAA”) of 2021 (P.L. 116-260)1, was enacted. The Federal Act takes effect on January 1, 2022

and applies to health plans issued or renewed on or after January 1, 2022.

Both the NJ Act and the Federal Act establish, among other things, consumer protections

from surprise bills for inadvertent and emergency out-of-network health care services. On

November 20, 2018, the Department of Banking and Insurance (“Department”) issued Bulletin 18-

142 to provide guidance with respect to the NJ Act. The Department now issues this bulletin to

update Bulletin 18-14 in light of the Federal Act

he Federal Act establish, among other things, consumer protections

from surprise bills for inadvertent and emergency out-of-network health care services. On

November 20, 2018, the Department of Banking and Insurance (“Department”) issued Bulletin 18-

142 to provide guidance with respect to the NJ Act. The Department now issues this bulletin to

update Bulletin 18-14 in light of the Federal Act.

In general, while the Federal Act sets a minimum standard that applies to all health plans,

including self-funded plans, federal employee plans, and “grandfathered” plans, states’ laws

remain operative so long as they do not prevent the application of the federal law.3 Therefore, to

the extent that the NJ Act applies, the Department will continue to enforce the NJ Act consistent

with the guidance in Bulletin 18-14 as it relates to plans and circumstances subject to the NJ Act.

1 See CAA, 2021, Pub. L. No. 116-260, 134 Stat. 1182 (2020) (enacting several new laws,

including the No Surprises Act at div. BB, tit. I, 134 Stat. at 2757-2890).

2 See the following link: https://www.state.nj.us/dobi/bulletins/blt18_14.pdf

3 See 42 U.S.C. 300gg-23(a)(1); 86 Fed. Reg. at 36,886.

LC NSA Bulletin/bulletins

2

With respect to federally regulated plans, the federal Departments of Health and Human Services,

Labor, and Treasury (collectively referred to as “the federal Departments”) will enforce the

provisions of the Federal Act. Federally regulated plans include self-funded plans that have not

opted into applicable portions of the NJ Act. Additionally, the federal Departments will enforce

provisions of the Federal Act with respect to particular services that are not governed by the NJ

Act, such as air ambulances4, and with respect to services rendered outside New Jersey.

• Claims Processing and Arbitration: The NJ Act creates an arbitration process pursuant

to N.J.S.A. 26:2SS-10

opted into applicable portions of the NJ Act. Additionally, the federal Departments will enforce

provisions of the Federal Act with respect to particular services that are not governed by the NJ

Act, such as air ambulances4, and with respect to services rendered outside New Jersey.

• Claims Processing and Arbitration: The NJ Act creates an arbitration process pursuant

to N.J.S.A. 26:2SS-10. The Federal Act created a separate Independent Dispute Resolution

(“IDR”) process that takes effect January 1, 2022 and applies to nearly all private employer

plans and individual insurance. Federal rules related to the IDR process, released on

September 30, 2021, establish the federal IDR process that out-of-network providers,

including facilities and providers of air ambulance services, plans, and issuers in the group

and individual markets may use to determine the out-of-network rate for applicable items

or services after an unsuccessful open negotiation.

However, the federal guidance permits the application of the New Jersey law as it relates

to state-regulated plans and self-funded plans that opt-in to the state arbitration process. Therefore,

the arbitration process established in the NJ Act will continue to apply to disputes relating to state-

regulated plans and self-funded plans that opt-in to the NJ Act. The State arbitration process under

the NJ Act will continue as provided in Bulletin 18-14, while the federal IDR process will now

apply to disputes relating to self-funded plans that did not opt in and in circumstances where the

NJ Act does not apply.

Thus, a self-funded plan may continue to opt to be subject to the claims processing and

arbitration provisions, as provided in Bulletin 18-14. A self-funded plan that previously opted into

the New Jersey arbitration by filing an ID card with the Department may opt out of the NJ Act

arbitration if it wishes to be subject to the federal IDR established under the Federal Act

ct does not apply.

Thus, a self-funded plan may continue to opt to be subject to the claims processing and

arbitration provisions, as provided in Bulletin 18-14. A self-funded plan that previously opted into

the New Jersey arbitration by filing an ID card with the Department may opt out of the NJ Act

arbitration if it wishes to be subject to the federal IDR established under the Federal Act. If a self-

funded plan wishes to opt-out of the NJ arbitration, notification should be sent to the Department

at least two weeks in advance of such an opt-out taking effect. This informational filing should

be submitted to the Department at the following email address: lifehealth@dobi.nj.gov

In short, with respect to out-of-network payment disputes between entities regulated under

the NJ Act, such disputes continue to be subject to the state arbitration process. Any disputes

between entities not regulated under the NJ Act, i.e. between a provider and a self-funded plan that

has not opted-in to the NJ Arbitration provisions, and to services not covered by the NJ Act, i.e.

air ambulance and services rendered out-of-state, may follow the federal IDR process.

• Out-of-Network Billing: The NJ Act prohibits providers from billing covered persons for

inadvertent and/or involuntary out-of-network services for any amount above the amount

resulting from the application of network level cost-sharing to the allowed charge/amount.

See N.J.S.A. 26:2SS-7 to -9

ct, i.e.

air ambulance and services rendered out-of-state, may follow the federal IDR process.

• Out-of-Network Billing: The NJ Act prohibits providers from billing covered persons for

inadvertent and/or involuntary out-of-network services for any amount above the amount

resulting from the application of network level cost-sharing to the allowed charge/amount.

See N.J.S.A. 26:2SS-7 to -9. The Department advises that to the extent that the balance

billing protections contained in the Federal Law extend beyond the state law balance billing

prohibitions, the Department will be referring complaints or balance billing prohibitions to

the federal Departments or relevant state regulatory agencies as appropriate.5

• ID cards: The Federal Act requires that insurance cards issued to enrollees must have the

following information: the applicable deductibles and out-of-pocket maximum limitations,

as well as a telephone number and website address for individuals to use in seeking

4 See 86 Fed. Reg. at 36,885.

5 See 86 Fed. Reg. at 36,877.

LC NSA Bulletin/bulletins

3

assistance.6 N.J.A.C. 11:22-8.3 contains certain similar requirements, but will be amended

to conform with the requirements in the Federal Act, including adding maximum out-of-

pocket maximums and appropriate telephone and website address information. In the

meantime, carriers should implement these requirements in good faith at the next

opportunity to update Identification Cards. The requirements contained in Bulletin 18-14

regarding self-funded opt-in information on the identification card remain operative.

• Broker commissions: The Federal Act7 requires carriers offering individual health

insurance coverage to disclose to enrollees prior to plan selection the amount of any direct

or indirect compensation that the plan will pay to the agent or broker associated with that

enrollment. This disclosure must also be included on any documentation confirming the

enrollment

on card remain operative.

• Broker commissions: The Federal Act7 requires carriers offering individual health

insurance coverage to disclose to enrollees prior to plan selection the amount of any direct

or indirect compensation that the plan will pay to the agent or broker associated with that

enrollment. This disclosure must also be included on any documentation confirming the

enrollment. Issuers must also annually report this information to the Secretary of HHS.

Such a requirement must be included in documentation to consumers as soon as possible

after January 1, 2022. Each individual market carrier shall submit prior to sending to

consumer a specimen of this disclosure document to the Department at the following email

address: lifehealth@dobi.nj.gov

On August 20, 2021, the federal Departments released Frequently Asked Questions that

advised deferred enforcement for certain provisions of the Federal Act.8 Specifically, deferred

enforcement for a comparison tool for price and quality information was delayed until plan year

2023.9 Additional requirements related to an advance Explanation of Benefits were delayed until

regulations can be adopted.10 As outlined in Bulletin 18-14, the NJ Act also requires certain

disclosure and transparency requirements for managed care plans. Specifically, carriers are

required to: maintain up-to-date website postings of network providers; provide clear and detailed

information regarding how voluntary out-of-network services are covered for plans that feature

out-of-network coverage; provide examples of out-of-network costs; provide treatment specific

information as to estimated costs when requested by a covered person; and maintain a telephone

hotline to address questions. See N.J.S.A. 26:2SS-6. The Department will continue to enforce the

state laws’ counterparts to the Federal Act until the federal provisions take effect.

Except as identified above, Bulletin 18-14 remains in effect for applicable regulated entities

in New Jersey

pecific

information as to estimated costs when requested by a covered person; and maintain a telephone

hotline to address questions. See N.J.S.A. 26:2SS-6. The Department will continue to enforce the

state laws’ counterparts to the Federal Act until the federal provisions take effect.

Except as identified above, Bulletin 18-14 remains in effect for applicable regulated entities

in New Jersey. To the extent Bulletin 18-14 is less inclusive or does not apply, the Federal Act

will govern.

The Department anticipates proposing any necessary regulations to implement the above

in the near future. Interested parties may access the Department’s website at

http://www.nj.gov/dobi/legsregs.htm to determine whether those regulations have been proposed.

12/30/21

Date

Marlene Caride

Commissioner

6 See PHS Act 2799A-1(e).

7 See PHS Act 2746.

8 See the following link: https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-

activities/resource-center/faqs/aca-part-49.pdf

9 See PHS Act 2799A-4.

10 See PHS Act 2799A-1(f).

Appeal and Arbitration Processes Grid

Process Name

Issues that can be

Resolved

Who can Initiate

Who Decides

Citations

Independent Health

Care Appeals Program

(established by Health

Care Quality Act)

IHCAP

Medical Necessity of

services, including

whether a service is

experimental,

investigational,

cosmetic, and dental

rather than medical,

whether an in-plan

exception is warranted,

and whether services are

required on an

emergency or urgent

basis

Covered person, or

provider acting with

consent of the covered

person

Independent Utilization

Review Organizations

under contract with the

Commissioner,

MAXIMUS as of 1/1/22

N.J.S.A. 26:2S-11 and

12,

N.J.A.C. 11:24-8.7 and

N.J.A.C

osmetic, and dental

rather than medical,

whether an in-plan

exception is warranted,

and whether services are

required on an

emergency or urgent

basis

Covered person, or

provider acting with

consent of the covered

person

Independent Utilization

Review Organizations

under contract with the

Commissioner,

MAXIMUS as of 1/1/22

N.J.S.A. 26:2S-11 and

12,

N.J.A.C. 11:24-8.7 and

N.J.A.C. 11:24A-3.6

Program for

Independent Claims

Payment Arbitration

(established by Health

Claims Authorization,

Processing and Payment

Act)

PICPA

What is the appropriate

payment for a covered

service rendered by a

provider, excludes

disputes that can be

submitted to the IHCAP

and OON Arbitration

Network providers - any

type of covered service,

Out-of-network

providers – services that

do not qualify as

inadvertent or

emergency or urgent

Nationally recognized

independent arbitration

organization under

contract with the

Commissioner,

currently MAXIMUS

N.J.S.A. 17:48-8.4e(2),

N.J.S.A. 17:48A-

7.12e(2), N.J.S.A.

17:48E-10.1e(2),

N.J.S.A. 17B:26-

9.1e(2), N.J.S.A.

17B:27-44.2e(2),

N.J.S.A. 26:2J-8.1e(2),

N.J.S.A. 17:48F-

13.1e(2) and N.J.A.C.

11:22-1.13

Out-of-Network

Inadvertent and

Emergent/Urgent

Arbitration (established

by Out-of-network

Consumer Protection,

Transparency, Cost

Containment and

Accountability Act)

OON Arbitration

Whether the final offer

of the carrier or the final

offer of the out-of-

network provider is the

appropriate

reimbursement for

inadvertent or

emergency or urgent

services rendered by the

out-of-network provider

where the person is

covered by an insured

plan, MEWA,

SHBP/SEHBP or by a

self-funded plan that

opts to participate in the

binding OON

Arbitration process,

Or

What is a reasonable

payment for inadvertent,

emergency or urgent

(involuntary) services

rendered by the out-of-

network provider when

the person is covered by

a self-funded plan that

does not opt to

participate in the

binding OON

Arbitration proc

by an insured

plan, MEWA,

SHBP/SEHBP or by a

self-funded plan that

opts to participate in the

binding OON

Arbitration process,

Or

What is a reasonable

payment for inadvertent,

emergency or urgent

(involuntary) services

rendered by the out-of-

network provider when

the person is covered by

a self-funded plan that

does not opt to

participate in the

binding OON

Arbitration process

Out-of-network

providers and carriers

for insured plans,

MEWAs,

SHBP/SEHBP, out-of-

network providers and

plan administrators for

self-funded plans that

opt in to OON

Arbitration, and covered

persons and out-of-

network providers for

self-funded plans that

do not opt in to OON

Arbitration

Entity with experience

in health care pricing

arbitration and using

American Arbitration

Association certified

arbitrations that is under

contract with the

Department,

MAXIMUS

N.J.S.A. 26:2SS-10

Federal Independent

Dispute Resolution

(IDR) Established under

the federal No Surprises

Act

Determining the out-of-

network rate that

federally-regulated

plans (that have not

opted into the

arbitration process in

under the Out-of-

network Consumer

Protection,

Transparency, Cost

Containment and

Accountability Act) are

required to pay

providers for claims

subject to surprise

billing protections under

PHS Act section

2799A-1 subsection

(a)(1) or (b)(1),

regarding coverage of

emergency services and

coverage of non-

emergency services

performed by

nonparticipating

providers at certain

participating facilities.

Out-of-network

providers and federally-

regulated plans that

have not opted into the

OON arbitration under

the Out-of-network

Consumer Protection,

Transparency, Cost

Containment and

Accountability Act.

Independent Dispute

Resolution (IDR)

entities selected by the

federal Department of

Health and Human

Services (HHS), the

Department of Labor

(DOL), and the

Department of the

Treasury (collectively,

the Departments)

ally-

regulated plans that

have not opted into the

OON arbitration under

the Out-of-network

Consumer Protection,

Transparency, Cost

Containment and

Accountability Act.

Independent Dispute

Resolution (IDR)

entities selected by the

federal Department of

Health and Human

Services (HHS), the

Department of Labor

(DOL), and the

Department of the

Treasury (collectively,

the Departments).

Section 2799A-1(c)(6)

of the Public Health

Service Act (PHS Act),

as amended by Title I

(No Surprises Act) and

Title II (Transparency)

of Division BB of the

Consolidated

Appropriations Act,

2021.