Insurer, N.J. medical associations seek solution to surprise out-of-network medical bills

The state’s largest health insurance company and organizations representing doctors and hospitals have held private discussions over the summer about legislation to protect consumers from surprise medical bills. They haven’t hammered out a compromise yet over the toughest issue — how to determine how much to pay a provider who isn’t part of an insurance network — but one participant expressed optimism.

“We’ve had conversations with many key stakeholders, including the Medical Society of New Jersey and the New Jersey Hospital Association,” said Robert Marino, chairman and CEO of Horizon Blue Cross Blue Shield of New Jersey, which covers about half of the state’s insured population, “and I’m hopeful based on how those conversations are going that we might be able to find middle ground.”

A law to solve the vexing problem of high out-of-network bills has long eluded legislators. The Democratic sponsors of the most recent effort were frustrated when their proposal stalled in June.

“I would hope that if we, the medical society and the hospital association can find some common middle ground, that the legislative process becomes a little easier,” Marino said. “I’m cautiously optimistic.”

The proposed legislation aims to protect consumers and limit the fees insurers must pay when care is provided by a doctor or hospital that does not participate in an insurer’s network and demands more than the insurer pays.

A Franklin Lakes woman who had an emergency cesarean section at The Valley Hospital in Ridgewood, for example, was billed $1,852 by the anesthesiologist after her insurer, Cigna, had already paid its standard fee for the care. She went to Valley because both the hospital and her obstetrician were in Cigna’s network, but none of the anesthesiologists affiliated with the hospital accepted Cigna. The anesthesiology practice sued the patient for payment in Bergen County Superior Court, and a decision is pending.

Insurer’s tab

Another situation addressed by the legislation is the cost to an insurance company for emergency care at a hospital that is not part of its network. Under state regulations, the patient can be billed no more than he would have paid at an in-network hospital. But the hospital can bill the patient’s insurance company whatever it wants, and charges at some New Jersey hospitals are among the highest in the nation.

Friday was the deadline set by Assemblyman Craig Coughlin, D-Middlesex, chairman of the Assembly committee that oversees insurance, for comments from various interest groups about the draft legislation. Many comments were received, and they will be analyzed over the next week, said a staffer.

Coughlin and the other sponsors — including state Sen. Joseph Vitale, a Woodbridge Democrat and chairman of the Senate Health Committee, and Assemblymen Gary Schaer of Passaic and Troy Singleton of Mount Laurel, both Democrats — are to meet during the week of Aug. 31 to discuss possible revisions in their bill, called “The Out-of-Network Consumer Protection, Transparency, Cost Containment and Accountability Act.”

Last June, after months of hearings and meetings with various interest groups, the proposed law failed to make it out of committee because of strenuous opposition from doctors and hospitals that said its plan to settle disputed bills through binding arbitration would cause them economic harm.

Marino said that an alternate method of resolving fee disputes — different than baseball arbitration, which the bill initially included — might receive the support of all three groups. In baseball arbitration, the arbitrator chooses one side’s final offer to resolve a claim. Marino recommended “balanced” binding arbitration instead, which would be based on the amount similar claims receive from Medicare and other insurance plans, both in-network and out-of-network.

Mediation alternative

The state medical society, however, said it favored non-binding mediation.

“We prefer that claims be referred, and go through some kind of informed mediation by physicians who know the work — and not just have a lawyer and someone who’s not familiar with clinical medicine look at it,” said Lawrence Downs, the society’s CEO.

Downs said the medical society has long had a voluntary resolution process, adding that professional societies want to help identify physicians whose fees are excessive and encourage them to be more reasonable.

When patients face out-of-network bills, Downs said, the responsibility really lies with insurers who do not offer sufficient payments to doctors to persuade them to join their networks.

“The reason we’re having such a problem fixing the out-of-network problem is that we’re not fixing the in-network problem,” he said. “It’s very difficult to address just this issue. That’s why it’s taking so long.”

Doctors believe that state regulations already do enough to protect consumers, Downs said, and that the proposed legislation is aimed more at protecting insurance companies.

A spokeswoman for the hospital association said the association was not yet prepared to comment on the latest version of the legislation.


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