New Jersey

SUMMARY

In the 2018 legislative session, New Jersey passed the Out-of-network Consumer Protection, Transparency, Cost Containment and Accountability Act (A 2039/S 485), which protects patients from surprise out-of-network medical bills. Among other mandates, providers would have to tell their patients before scheduling an appointment whether the provider is in or out of the person’s insurance network, as well as disclose all the financial liability the patient is likely to have for the given procedure.The measure also puts robust reporting and transparency requirements on carriers.

The state also introduced a number of bills aimed at increasing insurance and prescription cost transparency in the current session, with more likely to come.

 

LEGISLATION/REGULATION

New Jersey’s current regular legislative session runs from 1/9/2018 – 1/14/2020.

 

Recent Legislative Developments

Healthcare Transparency

2018 A 443  INSURANCE NETWORK TRANSPARENCY: Requires health care provider participating in carrier network to give notice to covered person of provider’s referral to out-of-network provider.   Active – Referred to Financial Institutions and Insurance Committee on 1/9/18.  
A 1920  DISCLOSING HEALTHCARE COSTS TO CONSUMERS: Health care facilities shall disclose to a covered person in writing or through an internet website the health benefits plans in which the health care facility is a participating provider prior to the provision of non-emergency services, and verbally or in writing, at the time of an appointment. ActiveReferred to Assembly Financial Institutions and Insurance Committee 1/9/2018.  
A 2214 PROHIBITS PHARAMCY BENEFIT MANAGERS FROM COLLECTING COPAYMENTS IN EXCESS OF CERTAIN AMOUNTS “CLAWBACKS”; REQUIRES CERTAIN LANGUAGE PROHIBITNG “GAG CLAUSES” IN CONTRACTS WITH PHARMACISTS: Prohibits a pharmacy benefits manager, in connection with any contract or arrangement with a private health insurer, prescription benefit plan, or the State Health Benefits Program or School Employees’ Health Benefits Program, from charging a covered person a copayment for a prescription drug benefit in an amount that exceeds the cost of the prescription drug that the pharmacy would charge to persons who do not purchase the drug through their health insurance coverage.  The bill also requires a pharmacy benefits manager to include in any contract between the pharmacy benefits manager and a pharmacy, language that permits the pharmacy to disclose to a covered person lower cost prescription drug options, including those that are available to the covered person if the covered person purchases the prescription drug without using health insurance coverage. ActiveReferred to Assembly Financial Institutions and Insurance Committee on 2/1/18.
A 3845 ENSURING TRANSPARENCY IN PRIOR AUTHORIZATION ACT: Requires a utilization review entity to make certain disclosures regarding its prior authorization requirements and restrictions, on its website and in writing, including certain statistics concerning approvals and denials, as set forth in the bill. Active – Referred to Health and Senior Services Committee on 4/12/16.
S 791 CERTAIN DISCLOSURES REGARDING HEALTHCARE COSTS: Requires healthcare facilities to disclose to a covered person in writing or through an internet website the health benefits plans in which the health care facility is a participating provider prior to the provision of non-emergency services, and verbally or in writing, at the time of an appointment. The bill also codifies a current Department of Banking and Insurance regulation, N.J.A.C.11:22-5.8, which protects patients from bills in excess of their in-network cost-sharing responsibility in certain out-of-network hospital situations.   Active – Passed second reading in Senate Commerce Committee.
A 2039/ S 485 OUT OF NETWORK CONSUMER PROTECTION, TRANSPARENCY, COST CONTAINMENT AND ACCOUNTABILITY ACT: a health care facility is required to:(1)   disclose whether the health care facility is in-network or out-of-network with respect to the covered person’s health benefits plan; and (2)   advise the covered person to check with the physician arranging the facility services to determine whether or not that physician is in-network or out-of-network with respect to the covered person’s health benefits plan and provide information about how to determine the health plans participated in by any physician reasonably anticipated to provider services. Passed – on 4/12/18.
A 583/ S 983 PRESCRIPTION DRUG REVIEW COMMISSION: The commission shall develop a list of critical prescription drugs made available in New Jersey for which there is a substantial public interest in understanding the development of pricing for the drugs. For each prescription drug that the commission places on the critical prescription drug list, the commission shall require the manufacturer to report the total cost of production, approximate cost of production per dose, and research and development costs of the drug.   Active – Referred to Assembly Health and Senior Services Committee 1/9/2018.  

 

Healthcare Cost

2018 AB 4676S 3185 PRESCRIPTION DRUG PATIENT PROTECTION ACT: PBMs are prohibited from requiring prior authorization for any prescription, unless there is an alternative drug that has a lower cost and is of equal quality and efficacy to the prescribed drug; if there is such an alternative drug, then that alternative drug would also not be subject to prior authorization.  Every PBM looking to provide pharmacy benefit management services in New Jersey must meet certain application requirements. In addition to providing basic ownership and contact information, the Division of Banking and Insurance (DOBI) will require PBMs to submit the following information in order to get a Certificate of Authority (C of A) before they are able to provide PBM services.   Active –Passed both Senate and House. Awaiting Governor’s Signature 1/19/18.
S 1590 PROHIBITS EXCESSIVE INCREASES IN PRICES CHARGED FOR ESSENTIAL OFF-PATIENT AND GENERIC PRESCRIPTION DRUGS AND BIOLOGICAL PRODUCTS: manufacturers and wholesale distributors may not engage in price gouging in the sale of an essential off-patent or generic drug or biological product.The Director of the Division of Consumer Affairs in the Department of Law and Public Safety may notify the Attorney General of any increase in the price of an essential off-patent or generic drug or biological product. The Attorney General may not commence an action seeking a court order for any relief, other than an order compelling submission of required statements or records, unless the Attorney General has provided the manufacturer or wholesale distributor the opportunity to meet with the Attorney General to provide a justification for the price increase. ActiveReferred to Senate Health, Human Services, and Senior Citizens Committee on 2/5/18.
S 1117 PROHIBITS USE OF MANUFACTURE COUPONS FOR CERTAIN PRESCRIPTION DRUG AND PRESCRIPTION BIOLOGICAL PRODUCTS: A manufacturer of a prescription drug product or prescription biological product shall be prohibited from offering any discount, rebate, product voucher, or other reduction in an individual’s out-of-pocket expenses, including a co-payment or deductible, for any prescription drug or biological product if a lower cost brand name or nonbrand name product is available that is designated by the United States Food and Drug Administration as therapeutically equivalent to, or interchangeable with, the manufacturer’s product. Active – Referred to Senate Health, Human Services, and Senior Citizens Committee on 1/25/18.
S 728/ A 3717 PROHIBITS PHARAMCY BENEFIT MANAGERS FROM MAKING CERTAIN RETROACTIVE REDUCTIONS IN CLAIM PAYMENTS TO PHARMACIES:  After the date of receipt of a clean claim for payment made by a pharmacy, a pharmacy benefits manager shall not retroactively reduce payment on the claim, either directly or indirectly, through aggregated effective rate or otherwise, except if the claim is found not to be clean during the course of a routine audit performed pursuant to an agreement between the pharmacy benefits manager and the pharmacy.  Nothing in the bill prohibits any retroactive increase in payment to a pharmacy pursuant to a written agreement between the pharmacy benefits manager and the pharmacy. Active– Referred to Senate Commerce Committee on 1/9/18.
S 977 PROHIBITS EXCESSIVE CHARGES FOR DRUGS DEVELOPED BY PUBLICALLY FUNDED RESEARCH: If a drug, biologic, or other health care technology approved by the federal Food and Drug Administration was developed, partially or entirely, through research and development that is directly or indirectly supported by the federal or State government, it shall be unlawful for any person to sell, offer to sell, or advertise for sale the drug, biologic, or technology to any purchaser in this State at a unit price that is greater than the benchmark unit price established pursuant to subsection b. of this section, or that constitutes discriminatory pricing as set forth in subsection c. of this section. Active– Referred to Health, Human Services, and Senior Citizens Committee on 1/16/18.
2017 AR 184 URGES FDA TO EXPEDITE APPROVAL PROCESS FOR GEENTo expedite access to generic drugs, for the next 47 reauthorization of the Generic Drug User Fee Act (GDUFA), the FDA should consider additional steps to improve ANDA review efficiency, so that the current backlog of pending applications and 2 the average time required to review generic drug applications can 3 be reduced. Active -Introduced on 10/26/17.

 

Healthcare Markets

2018 AB 605  PROHIBITS SALE OR LEASE OF ACCESS TO CERTAIN HEALTHCARE PROVIDER NETWORKS: This bill prohibits granting access to physician discounts under a provider network contract, in order to prevent the improper selling or leasing of these contractual discounts, under what is commonly known as a “silent PPO (preferred provider organization)” arrangement.  Active – Referred to Financial Institutions and Insurance Committee on 1/9/18. 
S 1877 NEW JERSEY INSURANCE MARKET PRESERVATION ACT: Requires that every resident taxpayer of the State obtain health insurance coverage that qualifies as minimum essential coverage under the bill.  If the taxpayer does not obtain coverage, the bill imposes a State shared responsibility tax equal to a taxpayer’s federal penalty under the ACA prior to the repeal of that provision. Active – Passed 2nd reading in Senate Commerce Committee.

 

Key Statutes

We compile state statutes relate to healthcare price and competition, including healthcare transparency, markets, and costs. For a complete listing of all health related statutes visit the State Health Practice Database for Research.

 

Transparency in Healthcare

  • J. Admin. Code § 8:31B-4.1 requires that every hospital submit a uniform report on costs, revenue and statistical information. Annual acute care hospital cost reports, containing revenue data for all payers for each acute care hospital, are available to the public.

 

  • J. Stat. Ann. § 26:2H-5 authorizes the commissioner of health to conduct inspections of healthcare facilities. The commissioner is directed to establish a uniform statewide reporting system for health care facility utilization and costs.

 

  • J. Stat. Ann. § 26:2H-18.55 in setting out the duties of the commissioner of health, the commissioner is directed to “[s]tudy and, if feasible, establish hospital cost and outcome reports to provide assistance to consumers of health care in this State in making prudent health care choices.”

 

Healthcare Contracting

  • J. Admin. Code. § 11:24C-4.3 prohibits most favored nation clauses, or clauses having a similar effect, in an agreement between an insurance carrier and a participating provider. A most favored nations clause is an agreement between a payer (such as an insurance company) and a provider that typically requires a provider to give the payer the lowest rate that it gave to any other comparable payer, which can be anticompetitive by encouraging oligopolistic pricing by large payers and increasing barriers for new entrants. Agreements between a participating provider and a carrier are not subject to the prior approval of the Commissioner.

 

Healthcare Markets

 

  • J. Stat. Ann. § 30:4D-8.1 establishes a Medicaid ACO Demonstration Project with the goal of increasing access to care and increasing efficiency and cost reductions through improved coordination and information sharing. Such activities will be exempt from state antitrust laws to the extent necessary to facilitate the project.

 

  • J. Admin. Code. § 8:33:4-9 prohibits health care providers from acquiring, replacing, or adding to their facilities and equipment, except in specified circumstances, without the prior approval of the Department of Health through the state’s Certificate of Need process. A Certificate of Need regime aims to reduce healthcare overheard by reducing unnecessary or duplicative services, but can be anticompetitive by increasing regulatory barriers for new entrants.

 

 

LITIAGATION/ENFORCEMENT

  • None identified.

 

KEY RESOURCES 

New Jersey Legislature

New Jersey Office of the Attorney General

New Jersey Department of Banking & Insurance

NJ Hospital Price Compare

New Jersey Prescription Drug Retail Price Registry