You May Soon Be Protected From Those Surprise Out-Of-Network Medical Bills

NJ.com — June 27, 2017

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

TRENTON — A state Senate committee Monday approved a long-awaited bill to protect thousands of New Jersey residents who get socked every year by surprise medical bills from doctors or hospitals they did not know were outside their insurance network.

Opposed by the leading hospital and physician lobbyists, the bill (S1285) would protect patients from "balance-billing," or paying what an insurance company won't. Horizon Blue Cross Blue Shield of New Jersey, the state's largest insurance company, estimated the out-of-network bills amount to $1 billion a year in the state.

The bill also would require doctors and hospitals to disclose their network status to patients before treatment.

State law can only be imposed on New Jersey-regulated insurance plans, such as the State Health Benefits Plan. But the legislation allows federally regulated and self-insured plans — which insures about 70 percent of the state — to voluntarily accept the law's protections, such as arbitration.

"The bill reins-in excessive charges that are driving up health care costs for all New Jerseyans," said Maura Collinsgru of New Jersey Citizen Action, a consumer advocacy organization.

The most controversial aspect of the "Out-of-Network Consumer Protection, Transparency, Cost Containment and Accountability Act" is the "baseball-style" arbitration process it would require. A third-party would decide how much an insurance company must pay by either choosing what the doctor hospital has billed or insurer's "last, best offer."

Neil Eicher of the New Jersey Hospital Association said the organization could not accept the bill's "baseball-style" arbitration model, because it would lose too much negotiating power with insurance companies.

Representatives from physician specialist groups said the bill was illegal because the state does not have the authority to interfere with federally-regulated self-funded insurance plans.

The committee approved the bill by a 7-6 vote. It still needs the support of the full Senate, plus clear repeat the vetting process in the state Assembly.

The committee also voted 13-0 to approve a less controversial and narrower bill sponsored by committee Chairman Paul Sarlo (D-Bergen) that would require doctors and hospitals to disclose their insurance affiliations to their patients before treatment.

Mary Beaumont, lobbyist for the New Jersey Business & Industry Association, urged the committee to reject Sarlo's bill and pass the more compressive fix.

"Transparency by itself is a great idea. But you can't have cost-containment without the other elements of the bill," Beaumont said.

Sarlo defended his bill. "This is not the final solution, but my bill flushes out the bad actors" — the relatively few hospitals and doctors that refuse to accept insurance and charge exorbitant rates.

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