Assignment of Benefits Bill Signed into Law
MSNJ has learned that Acting Governor Stephen M. Sweeney signed S114 into law this past Saturday. The law will take effect in 12 months.
Under the new law, when a patient assigns their benefits under a health insurance policy to a healthcare provider, their insurer must honor that request. The insurer may opt to issue a check jointly payable to the healthcare provider and patient, however the check must physically be sent to the provider of services.
This law remedies years of frustration where a provider of medical services who is out of network with a patient’s insurance company would see payments go directly to patient, leaving the provider to collect the fee. The cost to collect would reduce the provider’s income and in some instances the provider would never be paid.
The Medical Society of New Jersey partnered with many medical specialty societies to move this bill through the Legislature. This bill represents two years of advocacy on behalf of physicians.
This bill should take effect IMMEDIATELY – we should not have to wait another twelve months!!!!!
Agreed. The MSNJ objected to the delay in implementation, however the Legislature felt differently.
Lawrence Downs, Esq. General Counsel Medical Society of NJ 2 Princess Road Lawrenceville, NJ 08648 t. 609.896.1766 x 258 f. 609.896.1368 ldowns@msnj.org
Have a closer look at the bill. There is a provision for the insurance company to opt to make the check payable to the provider and the patient as joint payees! So what are we supposed to do, go back and chase the patient for his signature? Im sure the medical community will agree that there are many situations where we have to put patient’s into collection because they don’t forward the check. This hurts their credit and clogs up the courts. It is completely unnecessary. It is also unnecessary bookkeeping for the patient. Remember, they are paying MORE on their premium to have out of network plan provisions.
The bill, which had sailed through the Senate in 2008, stalled in
Assembly committee as policy makers debated the appropriateness of insurers using the “assignment issue” as a tool to encourage network participation. The Assembly eventually settled on a compromise which mandates direct payment while giving insurers the option of requiring
two signatures-the provider’s and the patient’s-on the check. The compromise preserved some difference in payment between participating and out-of-network providers, while assuring that physicians have better control over their billings. At the end of the day, physicians are a lot better off because the bill:
1. Guarantees that insurance payments will be mailed directly to
physicians regardless of their network participation;
2. Eliminates the possibility of patients keeping payments
intended for their physician
3. Assures that physicians are aware of when checks are cut, mailed, and signed by the appropriate party.
The key is that the check can now only be used to pay medical
bills; who would choose to not sign the check and ruin his/her credit?
This is a big win and I’m sure physicians will see its benefits when it goes into effect whether or not the insurance companies actually choose to require the two signatures.