The landmark out-of-network reform bill introduced Thursday by several top Democratic lawmakers sent health care providers and insurers into immediate spin mode, with each side pleading its case on the controversial issue.
But, if you talk to the lawmakers, consumers were their top priority.
The bill’s sponsors hope it will bring transparency to New Jersey’s current out-of-network fee structure and soften the financial blow dealt to insured patients receiving urgent or emergency care at an out-of-network facility.
“First and foremost, that’s what we sought to achieve,” Assemblyman Craig Coughlin (D-Woodbridge) said.
Assemblyman Troy Singleton (D-Mount Laurel) said ensuring access to quality care has long been a legislative priority. This bill, he said, “is an extension of that effort.”
“We’ve all seen or heard of horror stories from folks who’ve gotten these surprise bills when they’ve gotten medical procedures,” he said. “That can have a detrimental effect to anyone’s bottom line.”
Coughlin and Singleton introduced the bill Thursday alongside state Sen. Joe Vitale (D-Woodbridge) and Assemblyman Gary Schaer (D-Passaic).
“I think it is a momentous day in New Jersey’s history,” Schaer said.
Under the bill, health care facilities would be prohibited from billing the patient for urgent or emergency out-of-network care in excess of any of the deductibles, copayments or coinsurance amounts that they would normally charge for in-network care.
The bill also would restrict health care facilities from billing the out-of-network patient’s insurance carrier in excess of the maximum payment for a given urgent or emergency service.
That maximum payment, which would range from 75 percent to 250 percent of the median paid in-network cost for a particular service, would be set by an established health care price index, to be maintained by an organization of the Department of Banking and Insurance’s choosing.
The selected organization would be responsible for gathering and analyzing the health care data needed to form the health care price index, which will also be electronically published and made public.
The bill also would force insurance companies to update their websites at least every 20 days with lists of all in-network providers.
Making the data available will limit those unwanted surprises, Singleton said.
“There are some providers who use the out-of-network structure as part of their business model,” Singleton said. “What we’re trying to do is create some structure to this system.”
If reimbursement for out-of-network costs cannot be agreed upon within a 30-day period following the initial billing, both the insurance carrier and the facility have the option of entering into a binding arbitration process.
“There needed to be a way to resolve these issues,” Coughlin said of the arbitration process.
Singleton noted that, in Illinois, where a similar measure is on the books, there has yet to be a significant number of arbitration cases.
Transparency is another major component of the bill.
The lawmakers said that, all too often, they hear anecdotes from their constituents about “surprise bills” after receiving out-of-network care.
The bill would cover situations in which a patient at an in-network hospital for a nonemergency procedure receives care from an out-of-network provider based at that hospital.
“It is completely unreasonable and horribly unsafe to expect a patient lying on a hospital bed waiting to go into surgery to ask the anesthesiologist assigned to their care if they accept their insurance,” Vitale said.
The bill would stipulate that at least 30 days prior to a medical procedure, health care facilities would be responsible for offering patients a written disclosure form regarding the in-network or out-of-network status of the services to be performed.
The disclosure would have to include a thorough and clear description of the procedure as well as an estimate of all associated costs. In addition to that, patients must also be advised to further consult with their insurance carriers.
Schaer noted that nothing in the measure would preclude patients from seeking out-of-network care if they choose to do so, as long as they knowingly understand the financial ramifications of doing so.
“They will be responsible for the additional prices,” he said.
Of course, some blowback is expected.
Already, CarePoint Health CEO Dennis Kelly has spoken out on the proposed measure, advocating instead for an alternative system in which equivalent reimbursement rates would be issued for all patient encounters.
Kelly added that CarePoint facilities, in addition to other urban hospitals, may be forced to close, as out-of-network payments help sustain the care they offer.
Vitale said that, while he understands some of those points, he questions why facilities haven’t been charging the going rate for a “stitch and a Band-Aid” to begin with.
“There has to be a matter of fairness here,” Vitale said.
Singleton added that, when all involved parties know what they’re getting into, everyone wins.
“I think predictability in any system is beneficial to everyone,” he said.
While lawmakers did not offer a detailed road map for the bill, they are expected to meet with various stakeholders to discuss it further May 22, which Coughlin said will be “probably a marathon day for us.”
“Beyond that, we don’t have any specifics,” he said.