NEW JERSEY - BILLING ISSUES

January 1, 2008

New Jersey state laws and regulations that affect your medical practice

1. May a physician charge for missed appointments?

Yes. The State Board of Medical Examiners (SBME) has ruled that a physician is entitled to payment for situations where a patient has been informed in advance, in writing or by notice by any method whatsoever, of the physician's policy to charge for missed appointments or cancellations.

(Meeting of BME, May 10, 1978)

2. May a physician charge a late fee or interest on any unpaid balances?

There is no general restriction that prohibits physicians from charging late fees and interest on unpaid balances. It is advisable, however, to provide patients with prior notice concerning billing arrangements and procedure.

Note: The physician should be aware of any restrictions on this prohibition imposed by a patient's managed care program.

3. What restrictions on billing apply to physicians?

A. Physicians should be aware that there are two statutory restrictions that affect the ability of physicians to charge such fees:

(1) The SBME prohibits physicians from charging an "excessive fee for services." An excessive fee is defined, by the Board, to be any fee that is "so high as to be manifestly unconscionable or overreaching under the circumstances."

(N.J.A.C. 13:35-6.11(b))

(2) The Commissioner of Insurance also provides a schedule of fees for the reimbursement of physicians and other health care providers that provide services or equipment where payment is made by an automobile insurer under personal injury protection coverage.

(N.J.S.A. 39:6A-4.6)

B. A physician licensed who provides medical services to a beneficiary of the Medicare must prominently display in his office, and include on all billing statements to Medicare beneficiaries, his policy regarding the imposition of any charge in excess of the limiting fee for a service as determined by the United States Secretary of Health and Human Services.

(1) The physician shall prominently display in his office, and inform, in writing, the State Board of Medical Examiners, of any changes in his excess charge policy before the imposition of these changes in accordance with federal regulations.

(N.J.S.A. 45:9-22.12)

Of course, bills must accurately reflect the services provided, the correct CPT codes and any other information to avoid being misleading.

4.Is a physician required to provide a patient with an itemized bill?

New Jersey has no regulation governing the provision of an itemized bill to patients, other than workers' compensation situations. (See below)

The SBME has, however, encouraged a policy of truthful communication to patients of services actually rendered by physicians. It is the Board's position that candid discussions about all aspects of medical services proposed and rendered should be encouraged between physicians and patients, and that such a climate will foster better physician-patient relationships and increased respect by the patient for the professional services received. This policy would suggest that, upon request, a physician provide the patient, the patient's insurer or any administrative agency for any federal or state health program under which the patient is entitled to benefits, with a truthful disclosure or statement of specific services rendered and the actual cost charged.

(Meetings of the BME, Sept. 9 and Oct. 14, 1981)

Related regulations that should also be noted:

A. New Jersey requires that physicians maintain records relating to billings made to patients and third-party carriers for professional services. All treatment records, bills, and claims forms must be maintained for a period of seven (7) years from the date of the most recent entry or, with respect to Patient Records of minor patients, until the statute of limitations for a claim of medical malpractice has expired.

(N.J.A.C. 13:35-6.5)

Note: A patient's managed care program may require physicians to maintain records and/or bills for a longer period than required by the State.

B. Where a physician orders laboratory tests for a patient and the actual work of testing and analysis is done by another, the physician must disclose to the patient the identity of the test performer and the actual cost charged by that laboratory, even where the cost is incorporated in the total bill charged by the physician to the patient.

(N.J.S.A. 45: 1-10)

C. Physicians who render treatment to a patient, whom they know or have reason to believe is seeking a legal claim for workers' compensation or damages in a negligence case, must provide a true, accurate and itemized copy of the bill for the treatment rendered.

(N.J.S.A. 45:9-27.6)

5. May a physician charge for filling out medical insurance forms?

No. Physicians are prohibited from charging for filling out medical insurance forms. A physician may not demand payment of an outstanding bill in order to fill out such a form.

(N.J.S.A. 45:9-22.1)

A physician may, however, charge for the completion of a comprehensive report. A social security claim form requiring extensive information may be deemed a comprehensive report.

(Meetings of BME, August 13, 1986)

6. What information must be included on a bill?

A bill for services must conform to the following requirements:

A. A physician may bill for prescribed professional/technical services (including, for example, laboratory services, radiologic and EKG consultation, fabrication of eyeglasses, orthotics, etc.) ordered by or through the physician, with the patient's consent, provided that the name and address of the provider of the professional/technical services and the cost as billed to the physician, are disclosed to the patient.

(N.J.A.C. 13:35-6.17(c)(5))

B. A bill for services of a physician's employees, which have been rendered by licensed professionals authorized to provide services without medical supervision, must identify the provider of service by name and degree.

(N.J.A.C. 13:35-6.17(c)(4))

C. A physician with a financial interest in a laboratory for the performance of bioanalytic tests may bill only in the name of the physician's medical office and must include in the bill the name and address of such laboratory and the net amount or amounts paid or to be paid to such laboratory for individual tests, combination of tests or test series. (See "Referrals")

(N.J.A.C. 13:35-6.16(i)(1); N.J.S.A. 45:1-11)

D. A physician who performs or prescribes physical therapy to be administered in the physician's office may only bill in the name used by the physician's office. A bill for services of a physician's employees, which are rendered by licensed professionals authorized to provide services without medical supervision, must identify the provider of service by name and degree.

(N.J.A.C. 13:35-6.16(j)(1))

E. A physician may prescribe and/or perform radiologic services on the physician's office premises. Billing shall be done only in the name of the prescriber or office.

(N.J.A.C. 13:35-6.16(k)(1))

F. A physician may prescribe eyeglasses or external contact lenses and may offer to sell the devices. Billing shall be done only in the name of the physician or office. A bill for services of a physician's employees, which were rendered by licensed professionals authorized to provide services without medical supervision, must identify the provider of service by name and degree.

(N.J.A.C. 13:35-6.16(l)(1))

7. What factors which may be considered in determining whether a fee is excessive?

A. The time and effort required;

B. The novelty and difficulty of the procedure or treatment;

C. The skill required to perform the procedure or treatment properly;

D. Any requirements or conditions imposed by the patient or by the circumstances;

E. The nature and length of the professional relationship with the patient;

F. The experience, reputation and ability of the licensee performing the services;

G. The nature and circumstances under which services are provided. Unless services are provided during an emergency or other circumstances where opportunity, custom and practice will preclude discussion prior to the rendition of such services, the licensee shall, in advance of providing services, specify or discuss and agree with the patient, the fee or basis for determination of the fee to be charged.

8. Are there any penalties for excessive billing?

Charging an excessive fee shall constitute professional misconduct subjecting the licensee to disciplinary action by the SMBE.

Copyright Kern Augustine Conroy and Schoppmann, P.C. Used with permission.