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Lawmakers Aim To End Surprise, Out-Of-Network Medical Costs

NJ.com — Tuesday, November 24, 2015

By Susan K. Livio | NJ Advance Media for NJ.com

TRENTON — A state Assembly committee Monday approved legislation that would prevent consumers in New Jersey from getting surprise out-of-network medical bills that can saddle them with huge bills.

The measure would require hospitals and doctors to disclose whether they are part of a person's insurance network before treatment occurs.

The bill was praised by consumer advocates and picked apart by insurance and hospital executives and doctors during a 4-1/2-hour hearing tinged with sarcasm and humor. The Assembly Financial Institutions and Insurance Committee approved the bill 8-0 with three abstentions. It heads to the full Assembly for a vote.

"This bill is about protecting consumers," said Assemblman Craig Coughlin (D-Middlesex) the committee chair who co-wrote the bill. "It wasn't easy but in the end, consumers in the state of New Jersey should be happy."

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

"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.

Maura Collinsgru of NJ Citizen Action praised the bill for looking out for consumers who are "dealing with the stress of being ill."

"It's just enough for consumers to pick their provider and in-network facility. If they have to drill down 10 layers" to find out the out-of-network information "they are not going to be able to do it. Let's give them a break."

Chuck Bell of Consumers Union, the organization that publishes Consumer Reports, called it "One of the best bills in the country of this type."

"One-third of Americans in last two years have gotten a surprise bill," Bell said. Most people "caught in the middle" simply pay or go on a payment plan. "We implore you to act. Please don't wait another year to give them the relief they deserve," Bell said.

The bill (A4444) requires hospitals and health care facilities to:

The bill also requires doctors to:

The bill also creates a binding arbitration process that will allow consumers, medical providers and insurance companies to seek an independent ruling on acceptable payments.

This provision drew the most criticism.

"Though dispute resolution can be useful for the few truly egregious charges...it is meant to scare physicians into charging essentially in-network rates, even though they have no contract," said Mishael Azam, chief operating officer for the Medical Society of New Jersey.

Tim Martin, also representing the Medical Society also suggested the problem the committee was addressing "doesn't happen a whole lot."

A visibly annoyed Assemblywoman Pamela Lampitt (D-Camden) cut him off. "Don't minimize it to say it happens a few times. It's severe enough to draw the attention of a lot of people."

Coughlin later added: "So there is no problem? Thanks for clearing that up."

The Medical Society representatives also pointed out that the bill could have little effect on self-funded, federally regulated insurance plans who are not bound by state law, representing 70 percent of New Jersey residents.

The sponsors replied they've already heard from some self-insured companies that want to participate in the arbitration process because they have been socked by exorbitant out-of-network bills.

The committee also approved a companion bill, (A952) that would create a healthcare price index containing billing claims data to "to serve as a source for useful, objective...health information designed to make health care data available to the state and researchers "to improve price transparency." The bill does not describe how much the database would cost.

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