Patients would be shielded from “surprise” medical costs for out-of-network health care treatment under a bill that advanced from an Assembly committee Thursday.
The Appropriations Committee voted 8-0 to forward the bill to the Assembly, with eight Democrats voting yes and the panel’s three Republicans abstaining. The measure, co-sponsored by Assemblyman Gary Schaer, D-Passaic, would require a health care facility to disclose to a consumer whether the facility is in or out of that person’s covered health benefits plan.
Doctors likewise would be required to inform patients which health care plans the physician participates.
The bill also provides that unless the consumer specifically selects an out-of-network doctor to provide services, that person will not incur any out-of-pocket expenses beyond what they normally would have paid under their in-network health benefits plan.
“What this is, first and foremost, is a consumer protection bill,” said Assemblyman Craig Coughlin, D-Middlesex, another prime sponsor. He described cases such as a Bayonne man who was billed $17,000 for five stitches to his hand because the work was done out of network.
“This is a practice we’re trying to stop,” Coughlin added.
The bill drew opposition from hospital officials and physicians, who said they had no problem with the consumer protection part of the bill. But they did oppose another part of the bill that called for dispute resolution through arbitration with awards being capped at up to 250 percent of the amount that Medicare payment rate for that service.
Hospital officials argued that requiring that dispute go to arbitration with caps on the awards will eliminate the leverage they need to negotiate with insurance companies to make up for what Medicare and Medicaid do not cover.
“The New Jersey Hospital Association wants a solution to this problem,” said Betsy Ryan, president and CEO of the association. But she said the arbitration caps pose a problem for hospitals. “The leverage, the balance of power, the fair negotiating that we have with insurance companies will go,” she said.
Lawrence Downs, CEO of the Medical Society of New Jersey, said his group also opposed the dispute resolution part of the bill. “It’s an approach our physicians can’t support.” Downs said. He predicted arbitration caps “would create a perception among physicians that New Jersey is an unfriendly place to practice.” He said a market-based approach to arbitration awards would work better.
But Jack Sullivan, health benefits manager with the Northeast Carpenters Plan, said the Medicaid-based caps would be a better approach. “We’re in favor of having some type of protection for our members,” Sullivan said.
Schaer, who has sponsored several versions of the bill over the last eight years, noted that they passed the Assembly twice before only to stall in the Senate.
“I think it’s an extremely positive step forward but the bill has a long way to go,” Schaer said after the vote. “One is cautiously optimistic. Any movement is good.”