Establishes arbitration and notification process for health insurance carriers and provider networks when dispute arises over maintaining providers as in-network.

A1509

ASSEMBLY, No. 1509

STATE OF NEW JERSEY

222nd LEGISLATURE

�

PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION

Sponsored by:

Assemblyman ROY FREIMAN

District 16 (Hunterdon, Mercer, Middlesex and Somerset)

SYNOPSIS

���� Establishes arbitration and notification process for
health insurance carriers and provider networks when dispute arises over
maintaining providers as in-network.

CURRENT VERSION OF TEXT

���� Introduced Pending Technical Review by Legislative
Counsel.

��

An Act
concerning
certain arbitration agreements and
supplementing P.L.1997, c.192 (C.26:2S-1 et seq.).

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1.��� a.� If a carrier and
provider that is in the carrier�s network of providers attempt to negotiate a
network contract where the terms regarding pricing and reimbursement are in
dispute and negotiations do not result in a resolution, the carrier or provider
may initiate binding arbitration to determine the terms of the provisions of
the contract regarding pricing and reimbursement.

���� 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.� In response to this notice, the
other party shall inform the party initiating the arbitration 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;�

���� (4) The arbitration shall
consist of a review of the written submissions by both parties, which shall
include the final offer for the pricing and reimbursement by the carrier for
the provider network and the final offer by the provider network for the pricing
and reimbursement that will be accepted from the carrier; and

���� (5) The arbitrator's decision
shall be one of the two offers 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.

���� 2.��� a.�������� If a dispute
remains between a carrier and provider in the carrier�s network of providers
and arbitration pursuant to section 1 of this act is not initiated at least 60
days prior to the expiration of the contract between the carrier and provider,
arbitration shall automatically be initiated.

���� b.��� Thirty days prior to
open enrollment of the current plan year in which there is a dispute between a
carrier and a provider, notice that the provider in the dispute will be
out-of-network as of the commencement of the next plan year shall be issued, in
a form and manner as determined by the Commissioner of Banking and Insurance,
to the insured of the carrier.

���� c.���� Reimbursement for
health care services offered by the provider shall continue without alteration
by the carrier until the first day of the next plan year.

���� 3.��� This act shall take
effect immediately.

STATEMENT

���� This bill establishes a
binding arbitration process for when carriers and providers that are in the
carrier�s network of providers are in dispute.� Specifically, when carriers and
provider are in dispute over pricing and reimbursement and negotiations to
resolve the dispute have failed, the bill allows either party to initiate
binding arbitration to determine the terms of the provisions of the contract
regarding pricing and reimbursement.� Among the items the bill stipulates with
regards to the arbitration is 1) that the arbitration be initiated by filing a
request with the Department of Banking and Insurance; 2) the party requesting
arbitration is to notify the other party that arbitration has been initiated
and state its final offer before arbitration and in response, the other party
is to inform the party initiating the arbitration of its final offer; and 3)
the arbitrator's decision is to be one of the two amounts submitted by the
parties as their final offers and is to be binding on both parties.�

���� Under the bill, if a dispute
remains 60 days prior to the expiration of a contract between a carrier and
provider and arbitration is not initiated, arbitration shall automatically be
initiated.� Reimbursement for health care services offered by the provider in
the dispute are to continue without alteration until the first day of the next
plan year.� Thirty days prior to open enrollment of the current plan year in
which there is a dispute between a carrier and a provider, notice that the
provider in the dispute will be out-of-network as of the commencement of the
next plan year is to be sent to the insured of the carrier.