Payment disputes, binding arbitration
10. a. If attempts to negotiate reimbursement for services provided by an out-of-network
health care provider, pursuant to subsection c. of section 9 of this act, do not result in a
resolution of the payment dispute, and the difference between the carrier’s and the provider’s
final offers is not less than $1,000, the carrier or out-of-network health care provider may
initiate binding arbitration to determine payment for the services.
b. The binding arbitration shall adhere to the following requirements:
(1) The party requesting arbitration shall notify the other party that arbitration has been
initiated and state its final offer before arbitration, which in the case of the carrier shall be the
amount paid pursuant to subsection c. of section 9 of this act. In response to this notice, the
out-of-network provider shall inform the carrier of its final offer before the arbitration occurs;
(2) Arbitration shall be initiated by filing a request with the department;
(3) The department shall contract, through the request for proposal process, every three
years, with one or more entities that have experience in health care pricing arbitration. The
department may initially utilize the entity engaged under the “Health Claims Authorization,
Processing, and Payment Act,” P.L.2005, c.352 (C.17B:30-48 et seq.), for arbitration under
this act; however, after a period of one year from the effective date of this act, the selection of
the arbitration entity shall be through the Request for Proposal process. Claims that are subject
to arbitration pursuant to the provisions of this act, which previously would be subject to
arbitration pursuant to the “Health Claims Authorization, Processing, and Payment Act,” shall
instead be subject to this act;
(4) The arbitration shall consist of a review of the written submissions by both parties, which
shall include the final offer for the payment by the carrier for the out-of-network health care
provider’s fee made pursuant to subsection c. of section 9 of this act and the final offer by the
out-of-network provider for the fee the provider will accept as payment from the carrier; and
(5) The arbitrator’s decision shall be one of the two amounts submitted by the parties as
their final offers and shall be binding on both parties. The decision of the arbitrator shall
include detailed written findings and shall be issued within 30 days after the request is filed
with the department. The detailed written findings shall be an analysis of the decision
including, but not limited to, information concerning any databases, previous awards, or other
documentation or arguments that contributed to the arbitrator’s decision. The arbitrator’s
expenses and fees shall be split equally among the parties except in situations in which the
arbitrator determines that the payment made by the carrier was not made in good faith, in which
case the carrier shall be responsible for all of the arbitrator’s expenses and fees. Each party
shall be responsible for its own costs and fees, including legal fees if any.
c. (1) The amount awarded by the arbitrator that is in excess of any payment already made
pursuant to subsection c. of section 9 of this act shall be paid within 20 days of the arbitrator’s
decision as provided in subsection b. of this section.
(2) The interest charges for overdue payments, pursuant to P.L.1999, c.154 (C.17B:30-23
et al.), shall not apply during the pendency of a decision under subsection b. of this section
and any interest required to be paid a provider pursuant to P.L.1999, c.154 (C.17B:30-
23 et al.) shall not accrue until after 20 days following an arbitrator’s decision as provided in
subsection b. of this section, but in no circumstances longer than 150 days from the date that
the out-of-network provider billed the carrier for services rendered, unless both parties agree
to a longer period of time.
d. This section shall apply only if the covered person complies with any applicable
preauthorization or review requirements of the health benefits plan regarding the determination
of medical necessity to access in-network inpatient or outpatient benefits.
e. This section shall not apply to a covered person who knowingly, voluntarily, and
specifically selected an out-of-network provider for health care services.
f. In the event an entity providing or administering a self-funded health benefits plan
elects to be subject to the provisions of section 9 of this act, as provided in subsection d. of
that section, the provisions of this section shall apply to a self-funded plan in the same manner
as the provisions of this section apply to a carrier. If a self-funded plan does not elect to be
subject to the provision of section 9 of this act, a member of that plan may initiate binding
arbitration as provided in section 11 of this act.
3. This act shall take effect on the 90th day next following the date of enactment, except
that the Commissioner of Banking and Insurance may take such anticipatory administrative
action in advance thereof as shall be necessary for the implementation of this act.
Approved July 29, 2022.