New Jersey is the fourth most expensive state for family health coverage. According to the Commonwealth Fund, from 2010 to 2013 family premiums here increased by 7.4 percent every year and the national average was under 5 percent. The hospital with the highest billing rate in the country is Bayonne Medical Center. Some hospitals and doctors in New Jersey charge exorbitant fees for out of network benefits because there’s no cap on how much they can charge. Horizon Blue Cross Blue Shield Chairman and CEO Robert Marino, who also sits on the board of Public Media NJ, operator of NJTV, spoke with NJTV News Anchor Mary Alice Williams about the high out of network costs seen in New Jersey.
According to Marino, the abuse of out of network benefits is driving the high cost of health care in New Jersey.
“Horizon in 2013 spent over $1 billion in professional services for out of network physicians. Clearly this affects the consumers, the rate paying members if you will. It truly is one of the significant drivers of health care costs,” he said.
But for people who go to a hospital in network, is there a bait and switch going on where they’re suddenly out of network? No, according to Marino who says that the actual issue is the regulation related to emergency services.
He gives an example: “If one of Horizon’s members has a medical emergency and winds up in an emergency room of a non-network hospital or is treated by a non-network physician in the emergency situation, payers such as Horizon are required by state law to keep the member harmless. What that means is the member — because of the emergency situation — is responsible for nothing more than what would have been their in-network deductible or co-insurance.”
Marino also says that the out of network regulations are presenting business opportunities for a certain small number of physicians and providers who recognize that the payer is obligated to pay charges — regardless of what they may be.
“That really is the issue that Horizon is focused on. A small number of physicians and providers that have seen this regulation as an opportunity really to drive revenues and to increase bottom line profits. Truly at the end of the day it becomes a consumer issue because it’s reflected in the premiums that New Jersey consumers pay for health insurance,” Marino said.
Horizon Blue Cross Blue Shield NJ commissioned a report released earlier this month by Avalere that contains recommendations on how to reign in high out of network costs.
“The Avalere report that we commissioned outlined several recommendations that range from a very simple efficient cap on out of network charges that out of network providers would be able to bill to different forms of mediation and/or arbitration. What Horizon is advocating for is a simple, realistic, reasonable solution that somehow contains the cost of out of network charges,” Marino said.
State Sen. Joseph Vitale told NJBIZ that work is progressing on an out of network bill and that “We will likely have it completed within a month or so.” He is also working alongside Assemblymen Craig J. Coughlin, Gary Schaer and Troy Singleton.
When asked if he’s optimistic about out of network reform, Marino said, “I think there’s a heightened sense of urgency in New Jersey that this is one of the drivers of health care costs. It is an abuse by a very, very small number of physicians and providers. Let me say for the record that Horizon recognizes a provider’s right to go out of network and Horizon recognizes a member’s right to seek care from an out of network provider. The vast majority of professionals and facilities that we work with are very dedicated to patient care. It’s just a very small number of physicians and providers that have seen this loophole and have decided to use this as a business model.”