Out-of-network bill continues to spark controversy, with health care players lining up on both sides of issue

Opponents of the out-of-network bill that will be heard by the state Senate Budget and Appropriations Committee on Monday are hosting a news conference prior to the hearing to highlight their opposition to the current version of the health care measure.

Several New Jersey health professional groups have come together to form the Access to Care Coalition, which aims to address inconsistencies within the state’s consumer health plan coverage and call for more transparency.

The speakers lined up for the coalition discussion Monday include the lead researcher for a recent study by the California-based RAND Corp. that supports the group’s stance on the out-of-network issue.

Specifically, the opponents of the bill take issue with the method being used to help cap surprise bill costs. The legislation currently uses Medicare as a baseline, which the Medical Society of New Jersey has previously said is a moving target.

The RAND study, led by Soeren Mattke, was commissioned by CarePoint Health and released just before Thanksgiving. It shows that capping at 250 percent of Medicare could negatively affect the financial stability of hospitals in the state.

But some experts say the study is too focused on the facilities, like hospitals, and less on the actual cost of care.

“It focuses exclusively on the impact of the bill on the hospitals, but forgets that the bill is intended to protect consumers,” said Linda Schwimmer, CEO and president of the Health Care Quality Institute. “It states that the savings will go back to commercial revenue, but really that means that it goes back to consumers in the form of lower out-of-pocket costs and premiums, employers and taxpayers.”

“(The study) assumes that operating expenses are held constant and indicates that would likely change; however, it does not discuss the true cost of the services. Based on one of the tables, I inferred that status quo means that OON rate is (greater than) 650 percent of Medicare rates. Why would the cost be so much higher? Today, ACOs are finding that there are a number of significant opportunities to remove inefficiencies,” she said.

In addition, the report assumes 80 percent of out-of-network claims in hospitals are unintended.

“That is higher than anything I have seen in other analyses. Especially because almost all of the hospitals in New Jersey are in-network with almost all of the (health insurance) plans,” Schwimmer said. “The main OON issue the ‘-ologists’ within hospitals.”

Experts have said many out-of-network bills come from interactions with out-of-network doctors, typically a group identified by the suffix of their titles: “-ologist.”

Most recently, Horizon Blue Cross Blue Shield of New Jersey said in court filings it has brought anesthesiologists, one of the typical offenders, in the state in-network — which means reimbursement rates acceptable to those doctors were negotiated.

But there are still other groups that have not reached agreements with the insurers to be in-network.

Schwimmer said another problem with the RAND study is “they admit that they are making lots of assumptions to get to their overall conclusion that this bill will be bad for hospitals — such as that they don’t really know how the negotiating between hospitals and payers will go post-enact (of the out-of-network legislation).”

“My big takeaway from the RAND report is that they took what is an issue for small percentage of hospitals in New Jersey and made it into a larger issue by taking many questionable leaps, and then concluded that the bill will harm more hospitals,” she said.

“Legislators and the governor should help New Jersey residents by passing a law to stop this nefarious practice and require binding arbitration to set the bills at a fair market rate.”

Larry Downs, CEO of MSNJ, agrees with that solution.

While acknowledging the RAND report focuses on hospitals, Downs said the results are translatable to doctors as well.

Downs said what has been lost in the debate over the bill is the transparency of costs. 

"We don't want it to be one-sided," he said. "The doctor is going to tell you what he's going to charge, but you have no idea what your insurance company is going to pay. You need both pieces of information."

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