N.J. lawmakers tackle those surprise 'out of network' medical bills

TRENTON — Doctors and hospitals would be required to disclose whether their services are not covered by a person's insurance network before treatment occurs under the latest version of a proposed bill aimed at curbing "surprise" bills.

No longer would consumers learn after elective surgery that their anesthesiologist or other physicians were out of network and they will need to pay more, according to the bill obtained by N.J. Advance Media. Hospital officials and physician office administrators would be legally obligated to explain up front who is covered and not covered, and how much more would a person pay for an out-of-network provider, according to the legislation.

"Unless the covered person at the time of the disclosure. . .has knowingly, voluntarily, and specifically selected an out-of-network provider to provide services, the covered person will not incur any out-of-pocket costs in excess of the charges applicable to an in-network procedure," according to the bill.    

The "Out-of-Network Consumer Protection, Transparency, Cost Containment and Accountability Act" is the latest in a long and unsuccessful attempts to rein in a $1 billion problem that drives up premium costs for all policyholders, according to major insurance carriers in New Jersey

Lawmakers have said they intend to pass the so-called "out-of-network" bill before the legislative session ends in January. An Assembly hearing is scheduled on Monday, said Assembly Craig Coughlin, (D-Middlesex), one of the sponsors.

"The bill strikes a balance but in the end it meets the shared goals of protecting consumers form extraordinary billing," said Sen. Joseph Vitale (D-Middlesex), who is also a sponsor.

The last version of the bill hit a snag in the spring. Instead of moving ahead, lawmakers shelved the proposal and started over.

RELATED: N.J. lawmakers eliminate price caps from bill to curb soaring out-of-network insurance costs

This latest version, also sponsored by Assemblymen Gary Schaer (D-Passaic) and Troy Singleton (D-Burlington) retained the old bill's creation of an independent arbitration process to decide billing disputes between insurance companies and health care providers and protect consumers.

At the request of hospital executives and physicians, the arbitration process will require that a peer review panel made up of doctors with expertise in the related speciality study the bill in dispute, Coughlin said. The panel would make a recommendation determining whether the billed amount is fair. The arbitrator must consider the recommendation in reaching a ruling, he said.

No matter will go to arbitration that is less than $1,000, the legislation said.

Coughlin said the bill was rewritten based on the input from insurance companies, hospitals and doctors. "Whether they embrace it or not, we have done everything we can to address (their concerns) and maintain this as a consumer bill," he said.

Binding arbitration assures "no insurer will be stingy and no provider will overcharge," Vitale added. "Anything beyond reason, the party will most likely lose in arbitration."

The bill pertains to elective and non-emergency procedures only. State law says patients and insurance companies can only be charged the in-network rate for emergency care.

Hospitals and physicians would be expected to post on their websites or provide a written copy of which insurance carriers they accept, according to the bill. Prior to scheduling a non-emergency procedure, patients must be told if the professional they intend to use is out-of-network and disclose the estimated cost of services upon request. 

In addition, that physician must provide the name and address of any other specialists who will be involved in their care so the consumer may find out their network status, the bill said.

Insurance company executives have demanded a solution to the out-of-network problem, arguing that a handful of hospitals and specialists refuse who refuse to join a network and charge exorbitant fees for their services. In an op-ed in The Star-Ledger, Horizon CEO Robert Marino said because New Jersey does not regulate what OON hospitals and doctors can charge for their services, the business model of these few drive up premiums for everyone.

New Jersey hospitals – particularly its growing for-profit sector – is known as one of the most expensive in the nation based on out-of-network price list released by the U.S. Centers for Medicare and Medicaid Services. 

Medical providers and hospitals argue insurance companies are at the root of the problem because their reimbursements are so meager.

The Medical Society of New Jersey has criticized earlier attempts by the legislature to address the out-of-network issue, saying it punishes all doctors for the bad practices of the few. 

Mishael Azam, the Medical Society's chief operating officer, said Tuesday she is concerned about the issue particularly in light of Horizon's recent announcement it would offer the OMNIA plans that give consumers a 15 percent discount. Horizon can offer the savings because it has negotiated cheaper rates with half of New Jersey's hospitals.

"Especially now with OMNIA, we see that carriers do not meet network adequacy requirements and offer unfair contracts to physicians (with) poor payment and poor terms," Azam said. "We need to address those in network problems rather than vilifying the small number of doctors who are out of network because of the offensive behavior of carriers." 

[original article]