New Jersey lawmakers have made changes to a controversial bill intended to rein in surprisingly high medical bills some patients face if they receive treatment from hospitals or doctors not in their insurer’s network.
But there’s still disagreement among consumer advocates, doctors, hospital administrators and insurance representatives about the legislation and its many requirements.
The bill, known as the Out-of-Network Consumer Protection, Transparency, Cost Containment and Accountability Act was introduced last month by a group of Democratic legislators, including Assemblyman Troy Singleton, D-7th of Palmyra, with the intention of protecting patients and their health plans from alarmingly high out-of-network charges.
Doctors and health care providers who don’t participate in an insurer’s network and won’t accept an insurer’s reimbursement as the full payment, often will bill patients for the remainder of the fee, a practice known as balance billing. In some cases, patients will go to an in-network hospital but can receive a large bill because a specialist, such as a radiologist or anesthesiologist, who assisted in their care was not part of their insurance network.
“There’s been stories almost on a weekly basis in our papers about families who got surprise medical bills and how it’s such a detrimental impact,” Singleton said Monday during a hearing on the measure before the Assembly Financial Institutions and Insurance Committee.
“Everyone who comes before you today, no matter what their stripe — provider, insurer or consumer group — they will tell you this is an issue that needs to be solved,” he said.
Among its many requirements, the bill would mandate physicians and hospitals to give patients no later than 30 days prior to an elective procedure a statement detailing whether the hospital is in-network or out-of-network in respect to the patient’s health benefits plan, as well as a description of the procedure and a reasonable cost estimate.
The bill also would establish a health care price index detailing the various expenses of different medical procedures.
It would mandate that patients who receive emergency medical care from an out-of-network hospital or doctor cannot be billed greater out-of-pocket fees than what those patients would have incurred from an in-network provider. And it creates a binding arbitration process for cases in which an insurance company and health care provider are unable to agree on a reimbursement rate.
The bill originally included a cap on what health care providers could charge insurers based on a health care price database, but that component was dropped in response to opposition from doctors and hospitals, who complained it would impede their ability to negotiate appropriate payment.
“That represents a hugely significant change, and I think it’s representative of the fact that hospitals and physicians testified that was a real impediment to them in being able to negotiate,” committee chair Craig J. Coughlin, D-19th of Woodbridge, said Monday during the hearing. “We think that ought to go a long way towards putting together what we still believe will be a very successful and powerful bill for consumers.”
The hearing was the first public discussion of the bill since it was unveiled by lawmakers May 14. The panel listened to over three hours of testimony but did not hold a vote on releasing the legislation.
Representatives of insurance companies mostly spoke in favor of the measure, particularly the binding arbitration component, which would require insurers and providers to provide their last, best offer for an independent arbitrator to choose.
Ward Sanders, president of the New Jersey Association of Health Plans, and other supporters said the model encourages both sides to negotiate reasonable payments rather than risk arbitration.
“You hope to build it so they don’t come,” he said. “We think it can be an effective model.”
The New Jersey Medical Society, which represents New Jersey doctors, remains critical of the bill, arguing the measure was still “de facto rate setting” and that it fails to address insurers who mislead consumers who pay high premiums for coverage.
“Instead of holding insurance companies accountable for the out-of-network benefit they claimed to have been selling people, paying those premiums for all those months and years — we’re now going to limit what doctors can charge,” said Tim Martin, a lobbyist for the medical society.
Hospital representatives said they supported the bill’s objectives but some of the measure’s disclosure requirements would be burdensome.
“We just want to make sure the burdens on providers don’t become burdensome,” said Christie Carlson-Glazer of the Hospital Alliance of New Jersey.
Chuck Bell, programs director for Consumers Union, a nonprofit group that publishes Consumer Reports, said feedback they’ve received nationally shows that one-third of patients have received a surprise medical bill.
“Consumers have been working very hard to play by the rules and stay within their networks to avoid additional costs. They have every economic incentive to do so, but it’s quite difficult to do that,” Bell said.