The bill passed despite attempts by physicians and hospital representatives to convince the Assembly Appropriations Committee the bill was a gift to insurance companies, because they said it set unreasonably low reimbursement limits.
This bill, (A1952) requires medical providers to disclose on their websites their in-network and out-of-network status with insurance companies. It also creates an arbitration process to settle disputes by setting a minimum and maximum range for reimbursements. Arbitration awards could be no less than what Medicare pays, and no more than 2-1/2 times the Medicare rate.
The Medicare rate is 90 cents on the dollar for an average claim, and neurologists, orthopedists and other specialists expect far more than that, New Jersey Hospital Association President and CEO Betsy Ryan said. For specialty care, the costs are much higher than 2-1/2 times the Medicare rate, she said.
"Our leverage (with insurance companies) will be gone," Ryan said. "We will never, ever be about to get more than 250 percent, and the high-end specialists get more than this amount."
Assemblyman Troy Singleton, (D-Burlington), one of the bill's prime sponsors, insisted it was "possible" the reimbursement rate would be sufficient in many instances.
"It is possible I could be six feet tall and blonde, but I am not," Ryan replied, injecting a little levity in otherwise serious testimony.
Larry Downs, executive director of the Medical Society of New Jersey said the bill "creates a perception among physicians New Jersey is an unfriendly place to practice."
Don't be surprised if some of the 9,000 medical practices defect to other states, taking some of the 113,000 jobs they created, he said.
The savings the bill will provide consumers and taxpayers outweighed the objections, supporters said.
Assemblyman Gary Schaer (D-Passaic), also a prime sponsor, read from a state Treasury report that said $900 million has been paid out this year in out-of-network claims for public workers and teachers.
Maura Colinsgru of Citizen Action, a coalition of labor, community and consumer groups fighting for the bill's passage called the reimbursement rates "fair and reasonable to all parties that will result in significant savings."
The committee approved the bill by a 8-0 vote with three abstentions. It now moves to the full 80-member Assembly for a vote.