Revised out-of-network legislation going before Assembly panel on Monday

An Assembly committee is set to review a new version of legislation about surprise health care bills Monday.

A report released Thursday ahead of the committee hearing answers one of the most frequently asked questions about surprise out-of-network bills in New Jersey: What exactly do these bills cost the state?

That answer is about $420 million. About 168,000 New Jerseyans receive out-of-network medical bills each year, at an average of $2,500 per consumer.

The information came from a joint statement by New Jersey Policy Perspective and the New Jersey for Health Care Coalition.

For 18 months, stakeholders labored over the out-of-network bill, but it has seen no action since last November, according to Maura Collinsgru, health care program director at New Jersey Citizen Action.

The bill did not get a full vote last year and, although it was reintroduced in January, there has been no action in either Legislative house.

An amended version of the bill, however, is set to be discussed Monday at the Assembly Financial Institutions and Insurance committee.

It includes changes to the much-debated arbitration process in the event of a surprise medical bill.

Ray Castro from New Jersey Policy Perspective analyzed and compiled information in May from some insurance carriers, a Kaiser report and a Consumers Union report to give a broader view of the New Jersey issue, Collinsgru said.

The timing of the report, just days before the hearing of the amendments, was not a coincidence.

“It was released today because the Legislature is expected to consider new legislation soon to address the problem of inappropriate surprise out-of-network billing, and we felt it was important that they and the public know about the major financial impact this Issue has on consumers and businesses in New Jersey,” Castro said.

Amendments to the bill

  • Hospitals ensure physicians are in-network
  • Removes the peer-review component for the arbitration process, and instead requires an arbitrator to decide on a fixed amount within 90 to 200 percent of the Medicare rate.
  • Changes the date the bill would be effective from July 1, 2016, to 90 days from enactment.

The report was able to compare specific examples between Aetna and Medicare.

“The Medicare rate for a 24-hour hospital stay for a fracture cost $6,900, while Aetna was billed over $48,000 for the same service,” according to the report. “In another example, Aetna was billed more than $127,000 for a five-day hospital stay for pneumonia, more than 13 times the Medicare rate of $9,200.”

Chuck Bell, programs director for Consumers Union, said in a statement: “Consumers overwhelmingly want to be taken out of the middle of health plan-provider disputes that cause emotional stress and anxiety, and cost substantial time and money to resolve. We strongly urge legislators to pass this carefully developed, comprehensive legislation now, so consumers don’t have to wait another year or more for these vital new protections to take effect.”

Other points from the report:

  • $956 million per year is paid by 5 million New Jerseyans due to excessive out-of-network bills;
  • The type of insurance plays a role in protections from out-of-network billing;
  • New Jersey’s individual market premiums are the highest in the country — $473 — and more than double the U.S. average of $235 per month;
  • New Jersey employer-based premiums are the second-highest in the country, at $19,143 a year;
  • Fewer small employers are providing insurance due to cost, according to the New Jersey Department of Banking and Insurance.

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