A New Jersey law passed in 2024 removes a major administrative barrier for small businesses that supply medical equipment to patients.
Most salon and personal care owners in New Jersey have never heard of S4541—the Tom's Friends with ALS Bill of Rights Act. But if your business supplies, rents, or sells durable medical equipment (DME), or if you work closely with DME suppliers, one buried provision in this bill directly affects how you get paid.
Here's what most people don't know: under the new law, insurance companies can no longer require prior authorization before DME suppliers deliver equipment and submit claims for payment.
Before this law, the standard process worked like this: a patient's doctor prescribes equipment—a wheelchair, respiratory device, mobility aid, or other DME. The supplier then had to submit paperwork to the patient's insurance company and wait for approval before delivering the equipment. Insurance companies could delay approval, request additional documentation, or deny the request outright. Only after receiving written authorization could the supplier deliver the equipment and bill the insurer.
For small DME suppliers—many of them are independent businesses—this created real cash flow problems. Equipment might sit in inventory while waiting for authorization. Staff spent hours on the phone with insurers. Patients delayed getting equipment they needed. And there was always the risk of a denial that meant no payment at all.
Section 3(c)(1) of the law explicitly prohibits insurers from enforcing prior authorization requirements for durable medical equipment. This means:
Suppliers can now deliver equipment immediately without waiting for insurance approval. There is no longer a legal requirement to get authorization first.
Billing happens right away. Once equipment is delivered, suppliers can submit their claim to the insurer without prior approval in hand.
The insurer cannot deny payment based on lack of prior authorization. The law affirmatively bars insurers from using prior-auth denial as a reason to refuse a claim.
This doesn't mean insurers will pay every claim—they can still deny claims for other reasons, like medical necessity or coverage limits. But the administrative gatekeeping step is gone.
The law became effective immediately upon enactment. There was no waiting period. If your business supplies DME in New Jersey, this change is already in force.
If you own or operate a DME supply business, rent equipment to patients, or work in personal care and coordinate equipment delivery, this provision simplifies your workflow and reduces administrative burden. It's especially meaningful for small, independent suppliers who lack large billing departments.
Patients also benefit: they get equipment faster, without delays caused by insurance paperwork.
The law was designed to help people with ALS access equipment without bureaucratic delay. But the prior-authorization ban applies to all durable medical equipment, not just ALS-related devices.
For a detailed, business-specific guide to how this law affects DME suppliers and personal care operations in New Jersey, consult your industry association or legal counsel familiar with state insurance regulations.