Lawmakers Discuss Legislation to Help Patients Avoid Unexpected Out-of-Network Charges

By Michael Aron
Chief Political Correspondent

A patient goes into a hospital for surgery.

The hospital is in-network and that bill is covered.

But the surgeon is out of network and charges $28,700 for his services.

The insurance company pays the doctor $3,100, leaving the patient with a bill for nearly $26,000.

A Senate committee today tackled legislation designed to help the patient.

It would require a 30-day advance notice to the patient of whether the hospital and scheduled doctors are in-network or out.

Instead of balance-billing the patient for unpaid out-of-network charges, the bill would require insurers and providers to enter arbitration to resolve billing disputes.

An earlier provision that would have capped out-of-network charges at 2.5 times the median cost of a procedure was dropped at the urging of doctors and hospitals.

Sen. Joseph Vitale has been working on the bill for several years and says it will help consumers.

“So if it is that they go to a hospital that is in their network and the surgeon is in their network for a procedure that is scheduled, but the anesthesiologist, the radiologist, any other surgeon who may scrub in as an assistant is not in their network, they can’t control that and they shouldn’t be getting a bill. That should be negotiated between the hospital and the insurance company, let them figure that out. Patients will be protected in this bill from egregious over-billing,” he said.

In cases of emergency or urgent care, the patient’s responsibility would be whatever the in-network rate is.

The insurance industry seems more kindly disposed to the bill than the health care providers.

“We’re supportive of the direction this legislation is going in. We have to do something in New Jersey to address these concerns for consumers. The surprise billing when you walk into a hospital and are treated by someone you don’t even know, it’s simply not fair,” said NJ Association of Health Plans President Wardell Sanders.

The Medical Society of New Jersey fears doctors will be the big losers and argues that insurance networks are getting smaller than Department of Banking and Insurance rules require.

“Particularly with the new types of plans out there. The new high-deductible plans, the narrow networks, the tier networks, there are more and more types of plans proliferating. And DOBI requires every plan has network adequacy, not just every product, not just every company. So we really want to start enforcing those network adequacy rules because then we would make sure that doctors are getting fair contracts and fair payment” said Medical Society of NJ COO and Senior Manager of Legislative Affairs Mishael Azam.

Today’s session was for discussion only. The sponsors admit they don’t have the votes to get the bill out of committee. Doctors and hospitals are powerful lobbying forces in Trenton, and legislators of both parties are reluctant to pick a fight with them.