A5376 1R

An Act concerning transparency and affordability in health care¹[,] and¹ supplementing Title 26 of the Revised Statutes¹[, and making an appropriation]¹.

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

1. As used in this act:

“Commission” means the Health Care Cost Containment and Price

Transparency Commission.

“Department” means the Department of Health.

“Health care entity” means a payer or provider.

"Hospital" means an acute care general hospital licensed pursuant to P.L.1971, c.136 (C.26:2H-1 et seq.).

“Office” means the Office of Health Care Affordability and Transparency.

"Payer" means a “health benefits plan,” “benefits payer,” or a “third-party administrator” as these terms are defined in section 1 of P.L.2001, c.267 (C.17B:27B-1); a publicly funded health care program, including Medicaid, Medicare, the State Health Benefits Program, and the School Employee Health Benefits Program; or any other public or private entity, other than an individual, that pays or reimburses the cost for the provision of health care.

“Provider” means any person, facility, or entity that is licensed, certified, registered, or otherwise authorized by law to provide health care in the ordinary course of business or practice of a profession.

2. a. There is established the Office of Health Care Affordability and Transparency in the Department of Health. The purpose of the office shall be to: provide support, staffing, infrastructure, and expertise to the Health Care Cost Containment and Price Transparency Commission, established pursuant to section 3 of this act, and comprehensively address health care cost growth while establishing data analytics and public reporting mechanisms to ensure healthcare affordability, informed policymaking, and access for future generations.

b. The office shall have an executive director appointed by the Governor.

c. The office shall establish guidelines for health care entities to submit necessary data for the yearly evaluation of total health care expenditures, their incremental growth, pricing information, pricing incremental growth, the formulation of the healthcare cost growth benchmark and hospital price benchmark, and for publishing relevant data publicly. Health care entities shall adhere to the submission schedules established by the office.

d. The office shall collect hospital pricing data for the State Health Benefits Plan, in particular the in-network and out-of-network allowed amounts per service, for each hospital facility located in New Jersey identified by name and hospital system affiliation, based on the following service categories:

(1) inpatient hospital;

(2) outpatient hospital;

(3) emergency room services; and

(4) physician services provided:

(a) during an inpatient hospital admission; and

(b) as part of an outpatient visit or in connection with the provision of emergency room services, except to the extent the office determines the physician services analysis is not technically feasible and explains the basis for such a determination. Service-level allowed amounts shall be reported using codes used by the hospital for purposes of accounting or billing for the item or service, including, but not limited to, the Current Procedural Terminology code, the Healthcare Common Procedure Coding System code, the Diagnosis Related Group, or the National Drug Code.

e. The office shall prioritize existing data sources, such as data collected by the Drug Affordability Council, the State Health Benefits Program and School Employee Health Benefits Program, the Departments of Health and Human Services, and any other source may come into existence, including a Statewide All Payer Claims Database, to avoid redundant data acquisition processes.

f. The office shall be authorized to conduct and publish studies and implement programs with the goal of reducing the rate of growth in per capita total health care spending, promoting an affordable pricing environment that maintains access to high quality care, and lowering consumer spending on premiums and out-of-pocket costs.

3. a. There is established the Health Care Cost Containment and Price Transparency Commission in, but not of, the Department of Health. The purpose of the commission shall be to: monitor, analyze, and contain health care prices by identifying drivers of health care cost growth including hospital price growth; establishing and adopting a health care cost growth benchmark and a hospital price growth benchmark; identifying health care entities that exceed the benchmark or benchmarks; and addressing increases in excess of the benchmark or benchmarks through public transparency, opportunities for remediation, and other progressive enforcement actions that include civil penalties.

b. The commission shall consist of 18 members as follows: two individuals appointed by the Governor; the Commissioner of Health or the commissioner’s designee; one individual appointed by the Speaker of the General Assembly; one individual appointed by the Senate President; one individual representing the interests of local government health care purchasers, nominated by the New Jersey League of Municipalities; one individual representing the interests of local government, nominated by New Jersey Association of Counties; two individuals representing the interests of the public sector, nominated by the Coalition of Affordable Hospitals; two individuals representing the interests of the private sector, nominated by the Coalition of Affordable Hospitals; three consumer advocates, nominated by the New Jersey for Health Care Coalition; one individual representing the interests of small businesses, nominated by the New Jersey Business and Industry Association; the State Comptroller, or the State Comptroller’s designee, as a non-voting member; and two representatives from the Office of Health Care Affordability and Transparency, as non-voting members.

c. Members of the commission shall serve five-year terms, with initial appointments varying to allow for staggered terms.

d. A vacancy in the term of a member of the commission shall be filled for the remainder of the term in the same manner as the original appointment.

e. Members of the commission shall be diverse and possess expertise in a subject area of health care.

f. No member shall take any official action on any matter in which the person has a direct or indirect personal financial interest.

g. The commission shall select a chair, convene at least quarterly, and hold at least one annual public meeting.

(1) The commission may compel testimony at the public meeting from healthcare entities whose costs or prices exceed either benchmark.

(2) The commission shall provide an opportunity for public input at the annual public meeting.

h. The commission shall establish goals of reducing the rate of growth in per capita total health care spending, promoting an affordable pricing environment that maintains access to high quality care, and lowering consumer spending on premiums and out-of-pocket costs.

i. Each member of the commission shall receive paid time off from monies appropriated pursuant to section 5 of this act to participate in commission activities, and shall be reimbursed for traveling and other expenses necessarily incurred in the performance of official duties.

j. (1) The commission shall set a cost growth benchmark for health care entities, based on the Healthcare Affordability, Responsibility, and Transparency program, as well as a hospital price growth benchmark for each hospital, using their total facility plus physician price as a percent of Medicare as a baseline.

(2) The commission shall request that the office procure from health care entities the requisite data to evaluate total health care expenditures and health care prices, as well as their incremental growth.

(3) The commission shall review various cost drivers with a specific focus on the role of price growth in healthcare affordability.

(4) (a) The commission shall require health care entities that substantially or consistently charge or receive more for health care services than the benchmarks established by the commission, to submit to the commission a performance improvement plan. The commission shall work in consultation with the office to set guidelines for a performance improvement plan’s creation, content, and enforcement.

(b) The commission shall impose progressive enforcement actions including civil penalties on health care entities that either fail to respond to the commission’s request to submit a corrective action plan or comply with the requirements of a corrective action plan. The commission shall work in consultation with the office to establish criteria for the imposition of civil penalties. Civil penalties shall be collected in a summary proceeding brought in the name of the State in a court of competent jurisdiction pursuant to the "Penalty Enforcement Law of 1999," P.L.1999, c.274 (C.2A:58-10 et seq.).

(5) The commission shall prepare and submit to the Governor and, to the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), an annual report containing the latest available data on total health care expenditures, the current status of compliance by each health care entity with the benchmarks, hospital pricing information for the State Health Benefits plan as described in section 2 of this act, and policy recommendations to lower health care costs. This report shall be made available publicly by the commission on an Internet website, hosted by the office or the department.

4. a. The department shall require hospitals to be in compliance with federal hospital price transparency requirements and provide a written warning notice to or request a corrective action plan from any hospital that is not in compliance with these federal requirements.

b. (1) A hospital shall be prohibited from attempting to collect a medical debt from a patient if the hospital is not, at the time of providing medical services to the patient, in compliance with the provisions of this section.

(2) Debt collection attempts prohibited by this section include referring the debt directly or indirectly to a debt collector, collection agency, or to a third-party retained by the health care facility; suing the patient or patient guarantor; enforcing an arbitration or mediation clause in any hospital contract; or causing a report to be made to a consumer reporting agency.

c. A hospital that fails to act in accordance with the provisions of this section shall be liable to a civil penalty of $10 per day per bed in the hospital for each offense. For the purposes of this act, each violation shall constitute a separate offense. The civil penalty shall be collected in a summary proceeding, brought in the name of the State in a court of competent jurisdiction pursuant to the "Penalty Enforcement Law of 1999," P.L.1999, c.274 (C.2A:58-10 et seq.).

d. The department shall prepare and submit to the Governor and to the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), detailing hospitals’ compliance with the federal hospital price transparency requirements, and publish the report on its Internet website.

¹[5. There is appropriated from the General Fund to the Office of Health Care Affordability and Transparency such sums as may be necessary to effectuate the purposes of this act, as shall be determined by the Commissioner of Health, but in no case shall this amount exceed $5,000,000.]¹

¹[6.] 5.¹ The Commissioner of Health shall adopt rules and regulations, in accordance with the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), as are necessary to effectuate the provisions of this act.

¹[7.] 6.¹ This act shall take effect 180 days following the date of enactment.