NJ Lawmakers Advance Legislation to Crack Down on Out-of-Network Bills

TRENTON — New Jersey lawmakers voted Monday to advance two controversial bills intended to rein in surprise medical bills some patients will face if they receive treatment from hospitals or doctors not in their insurer's network.

After several hours of discussion and debate, the Assembly Financial Institutions and Insurance Committee voted to advance Assembly Bill 4444 and Bill 952, clearing them for potential floor votes by the full chamber next month

The two bills were written by a group of Democratic lawmakers, including Assemblymen Craig Coughlin, Troy Singleton and Gary Schaer, with the intention of protecting patients and their insurers from alarmingly high out-of-network charges and increasing transparency about health care costs.

Doctors and health care providers who don't participate in an insurer's network and won't accept an insurer's reimbursement as full payment often 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.

"This issue is very real and costly to real people," Coughlin, D-19th of Fords, Middlesex County, said at the onset of the hearing. "Our constituents can't wait any longer. It's time to act, and it's time to act now."

Under Assembly Bill 4444, hospitals and doctors' offices would be required to disclose upfront to patients what their insurance coverage is and how much they will have to pay. It also would prohibit patients from being billed more than the in-network rate unless they "knowingly, voluntarily and specifically selected an out-of-network provider to provide services" and create a binding arbitration process for cases in which an insurance company and health care provider are unable to agree on a reimbursement rate.

In cases of emergency care or inadvertent use of out-of-network physicians or specialists, the consumer would not be billed more than the in-network rate or the "lowest cost share" of their insurance plan.

The latter provision would apply to tiered health plans, such as Horizon Blue Cross Blue Shield of New Jersey's new OMNIA Alliance plans, which reward consumers with discounted premiums and reduced copayments if they use select doctors and hospitals.

None of Burlington County's three acute-care hospitals — Virtua Memorial, Virtua Marlton and Lourdes Medical Center of Burlington County — are among Horizon's preferred list of hospitals, also known as Tier 1 providers.

Assembly Bill 952 also would establish a health care price index detailing the various expenses of different medical procedures.

The bills originally were introduced earlier this year but sparked disagreement among consumer groups, doctors, hospital administrators and insurance representatives.

Singleton, D-7th of Palmyra, said the bills were rewritten to incorporate as much input as possible from the various stakeholders without sacrificing the objective of protecting consumers.

"Our responsibility as sponsors is 100 percent on consumers," he said about the shocking medical bills some consumers face.

The two bills are intended to bring accountability and transparency to the health care market, he said.

Coughlin said the reforms also would reduce New Jersey's health care costs for state employees, potentially saving the government as much as $98 million annually.

Representatives from hospitals and doctors' offices said they still oppose the bills, arguing that they would cripple their bargaining power with insurance companies over reimbursement rates and networks.

"Carriers want to control their costs for their shareholders, not their stakeholders," said Mishael Azam, chief operating officer with the Medical Society of New Jersey.

"To say you can't balance bill at any time, that shifts the burden 100 percent on doctors," added Tim Martin, a lobbyist with the Medical Society. "You'll need to join networks just to protect from unfair prohibition on balanced billing."

And while the legislation was rewritten to include input from a peer review panel made up of doctors into the arbitration proceedings, they continue to take issue with the so-called "baseball-style" arbitration, which would require insurers and providers to provide their last, best offer for insurers to choose.

Ward Sanders, president of the New Jersey Association of Health Plans, said the model encourages both sides to negotiate a reasonable payment.

"The goal is to force folks into the middle," Sanders said. "It brings both parties together, which is what you want."

Maura Collinsgru, program director with consumer group New Jersey Citizen Action, applauded the legislation, arguing that out-of-network billing drives up the costs of insurance across the board.

"Indirectly, out-of-network costs are driving up my premium, your premium and every premium in New Jersey," she said. "(Assembly Bill 4444) is a way to level the playing field and bring down the costs across the board."

Collinsgru also spoke in favor of the health care price index, which she said would make medical billing more open and transparent.

"Transparency is essential, and we have little of it in our system," she said.

Singleton said studies have shown that price transparency can bring down health care costs.

"(The bill) will not only provide consumers with increased cost visibility, but it will assist insurers and medical professionals in developing innovative collaborations that seek opportunities to offer quality care at an affordable price," he said.

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