New Jersey technically has no DPC laws at present. None are planned in the current legislative session. In 2015 Senate President Stephen Sweeney (representing the third legislative district) supported DPC and is spoke of sponsoring DPC legislation at some point. Multiple DPC practices are operating in New Jersey, including a pilot (toolkit for employees from March 2019) with state employees involving both R Health and Paladina Health .
According to NJ Rev Stat § 17:48H-1 (2013) discussing Organized Delivery Systems (and related managed care laws) for healthcare services "Financial risk" means “exposure to financial loss that is attributable to the liability of an organized delivery system for the payment of claims or other losses arising from covered benefits for treatment or services other than those performed directly by the person or organized delivery system liable for payment, including a loss sharing arrangement. A payment method wherein a provider accepts reimbursement in the form of a capitation payment for which it undertakes to provide health care services on a prepayment basis shall NOT be considered financial risk.” This appears to carve out a nice exception for DPC practices, though to our knowledge it has not been applied and litigated specifically with this application.
Since no DPC defining “not insurance” laws are in place physicians will want to review the New Jersey insurance laws (Title 17(B) - Justia citation) when planning their DPC practices, more specifically 17B:17-4. Health insurance defined (NJ Rev Stat § 17B:17-4 (2013)) "Health insurance is a contract or agreement whereby an insurer is obligated to pay or allow a benefit of pecuniary value with respect to the bodily injury, disablement, sickness, death by accident or accidental means of a human being, or because of any expense relating thereto, or because of any expense incurred in prevention of sickness, and includes every risk pertaining to any of the enumerated risks. Health insurance does not include workmen's compensation coverages.”
Practices often achieve low and transparent pricing with medications, labs, and radiologic services. All three of these are difficult in New Jersey, making this location one of the toughest in the country to operate a DPC practice.
New Jersey makes it very difficult to conduct any in-office dispensing. NJ Rev Stat § 45:9-22.11 Dispensing of drugs to patient limited; exceptions:
"A physician shall not dispense more than a seven-day supply of drugs or medicines to any patient. The drugs or medicines shall be dispensed at or below the cost the physician has paid for the particular drug or medicine, plus an administrative cost not to exceed 10% of the cost of the drug or medicine." There are many exceptions, and New Jersey physicians should use these exceptions when possible. Unfortunately these exceptions are not likely to help DPC physicians, and considering legal action mirroring the recent state constitutional challenge made in Texas could be a wise move in New Jersey too. For those interest in this Texas litigation, Michael Garrett, MD (a DPC Physician) and Kris Held, MD (an ophthalmologist) have joined up with the Institute for Justice to make an effective state constitutional law argument against the state boards of both medicine and pharmacy. Here is a copy of the complaint that was filed in June 2019.
“The provisions of this section shall not apply to a physician:
a.who dispenses drugs or medicines in a hospital emergency room, a student health center at an institution of higher education, or a publicly subsidized community health center, family planning clinic or prenatal clinic, if the drugs or medicines that are dispensed are directly related to the services provided at the facility;
b.whose practice is situated 10 miles or more from a licensed pharmacy;
c.when he dispenses allergenic extracts and injectables;
d.when he dispenses drugs pursuant to an oncological or AIDS protocol;
e.when he dispenses salves, ointments or drops; or
f.when he dispenses a drug or medicine delivered to the eye through a contact lens.”
“The provisions of this section shall not apply to a licensed chiropractic physician who dispenses food concentrates, food extracts, vitamins, minerals, herbs, enzymes, amino acids, tissue or cell salts, glandular extracts, neutraceuticals, botanicals, homeopathic remedies, and other nutritional supplements.”
Labs: Some DPC practices in New Jersey have been told by national lab chains that the lab must bill the patient rather than allowing the DPC practice to pay the lab fee and seek a similar payment from the patient. The NJ Rev Stat language cited below does indeed demonstrate a requirement that the lab present a bill for payment directly to the patient. Fortunately many of the subsequently discussed exceptions seem to swallow the rule. I would argue that DPC practices could engage in practice level payments with the labs if they take the following steps (either 1 & 2 or #3):
1) Explain that you are a healthcare provider with the goal of promoting public health, and
2) At the time the blood work is submitted to the lab provide the lab with an itemized lab bill that was already presented to the patient (ideally with payment already made by the patient to the DPC practice at the time the specimen was collected) listing the name and address of the lab with net amounts paid, OR
3) Work with an acceptable third party payor that is not antagonistic to the DPC model - such as a medical services corporation or the patient’s employer. These groups can be billed on an itemized basis by the DPC practice and the lab would not need to track down payment from the individual patient.
Agreement by practitioner for payments to laboratory for tests without disclosure to patient, third party payor; prohibited. NJ Rev Stat § 45:1-10 (2013). “It shall be unlawful for any person licensed in the State of New Jersey to practice medicine or surgery, dentistry, osteopathy, podiatric medicine or chiropractic to agree with any clinical, bio-analytical or hospital laboratory, wheresoever located, to make payments to such laboratory for individual tests, combination of tests, or test series for patients unless such person discloses on the bills to patients and third party payors 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.”
Clinical laboratory bills, presentation. NJ Rev Stat § 45:9-42.41a (2013).
”A clinical laboratory shall present or cause to be presented a claim, bill or demand for payment for clinical laboratory services directly to the recipient of the services , except that the claim, bill or demand for payment may be presented to any of the following:
a. An immediate family member of the recipient of the services or other person legally responsible for the debts or care of the recipient of the services;
b. A third party payer including a health insurer, a health, hospital or medical services corporation, a State approved or federally qualified health maintenance organization in which the recipient of the services is enrolled, a governmental agency or its specified agent which provides health care benefits on behalf of the recipient of the services, and an employer of the recipient of the services who is responsible for payment of the services, provided that billing these payers is consistent with the terms of any applicable contract between the payer and the recipient of the services;
c. A hospital or skilled nursing facility in which the recipient of the services is or has been an inpatient or outpatient;
d. A substance abuse program in which the recipient of the services is or has been a participant; and
e. A nonprofit clinic or other health care provider whose purpose is the promotion of public health, from which the recipient of the services has received health care.
Upon the request of the health care provider who requested the clinical laboratory services, a clinical laboratory shall notify the health care provider of the amount of the claim, bill or demand for payment that was presented to the recipient or the recipient's responsible third party pursuant to this section. Notwithstanding the provisions of this section to the contrary, in the case of a clinical laboratory which performs services at the request of another clinical laboratory, the clinical laboratory may present the claim, bill or demand for payment to the requesting clinical laboratory. Notwithstanding the provisions of this section to the contrary, nothing in this section shall affect a contractual agreement between a clinical laboratory and a third party payer regarding presentation of a claim, bill or demand for payment directly to that third party payer.”
Corporate Practice of Medicine - this doctrine is actively enforced in New Jersey. See the New Jersey Supreme Court opinion in Allstate Ins. Co. v. Northfield Med. Ctr., P.C., 2017 BL 148804 (N.J. May 4, 2017).
Bills for treatment subject to claim for workmen's compensation or damages in negligence. NJ Rev Stat § 45:9-27.6 (2013) “Any physician or surgeon who renders treatment which he knows or reasonably should know is or will be related to, or is or will be the basis of, a legal claim for workmen's compensation or damages in negligence shall provide his patient with a true, accurate and itemized copy of the bill for treatment rendered. Such physician or surgeon should certify and attest by his signature on all originals and copies of such bills to the actuality and accuracy of the examinations and treatments rendered and the amounts charged for them.”
Fees for treatment; limitation. NJ Rev Stat § 45:9-27.7 (2013). “In any matter where medical services rendered to a client form any part of the basis of a legal claim for damages or workmen's compensation, a physician shall not contract for, charge, or collect a fee in excess of the following limits:
a. The physician's standard fee for the same medical services which do not form any part of the basis of a legal claim for damages or workmen's compensation; plus
b. The standard or established incremental costs, clerical or otherwise, incurred in rendering medical services which form any part of the basis of a legal claim for damages or workmen's compensation.”
Contingent fees; prohibition. NJ Rev Stat § 45:9-27.8 (2013). “In any matter where medical services rendered to a client form any part of the basis of a legal claim for damages or workmen's compensation, a physician or surgeon shall not contract for, charge, or collect a contingent fee.”
Medical malpractice liability insurance, letter of credit required for physician, regulations. NJ Rev Stat § 45:9-19.17 (2013) “A physician who maintains a professional medical practice in this State and has responsibility for patient care is required to be covered by medical malpractice liability insurance issued by a carrier authorized to write medical malpractice liability insurance policies in this State, in the sum of $1,000,000 per occurrence and $3,000,000 per policy year and unless renewal coverage includes the premium retroactive date, the policy shall provide for extended reporting endorsement coverage for claims made policies, also known as "tail coverage," or, if such liability coverage is not available, by a letter of credit for at least $500,000.”
45:9-22.15. Notice of nonprovision of Medicare services (NJ Rev Stat § 45:9-22.15 (2013))
”If a physician does not provide services to Medicare beneficiaries, he shall prominently display in his office an appropriate notice, and inform, in writing, the State Board of Medical Examiners.” This requirement is rather ironic for DPC physicians. We generally “opt out” of Medicare so that we are ABLE to see Medicare patients under a private contract for covered services. DPC physicians in New Jersey will likely want to send some kind of notification to the State Board of Medical Examiners in each of the two most likely scenarios: 1) They have started a DPC practice, but have not “opted out” of Medicare and thus are not making their DPC clinic available to Medicare patients, or 2) they have “opted out” of Medicare so that they are now free to privately contract with patients for covered services and accept Medicare patients in their practice. There is certainly a technical argument that in scenario #2 you are providing services to Medicare patients and thus no notice is required, but it is unclear how the State Medical Board would treat this example.
45:9-22.26 Licensed physician to provide information concerning the Independent Health Care Appeals Program. NJ Rev Stat § 45:9-22.26 (2013) “A licensed physician shall be required, as prescribed by regulation of the State Board of Medical Examiners, to post, in a conspicuous place in the patients' waiting room within the physician's medical office, a notice, as prescribed pursuant to section 3 of P.L.2011, c.190 (C.26:2S-14.2), which provides information about the operation of the Independent Health Care Appeals Program, established pursuant to section 11 of P.L.1997, c.192 (C.26:2S-11), and how to apply for the program.”