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Advocates Want Legislative Leaders to Curb Surprise Medical Bills

The goal: protect patients from unexpected fees charged by out-of-network doctors and hospitals, while also saving the state money

assemblyman craig coughlin
Assemblyman Craig Coughlin (D-Middlesex), a strong backer of bill to curtail surprise medical bills

Legislative leaders are facing growing pressure to advance a proposal designed to cut costly medical bills issued to patients treated by healthcare providers who are not part of their insurance network, a practice that opponents said adds up to $1 billion each year to costs in New Jersey.

Patient advocates joined labor leaders, business representatives, and legislative allies in Trenton on Thursday to convince those who control the Assembly and Senate that it was time to post the bill for a vote and offer their support. As drafted, the proposal would make New Jersey the fifth state to adopt such protections, and it would constitute the strongest law of its kind nationwide, they said.

But this push — the latest in a campaign that has dragged on for more than eight years -- did not appear to spark immediate action. Assembly Speaker Vincent Prieto (D-Hudson) said work on the bill continues, and Senate President Steve Sweeney (D-Gloucester) did not respond to several requests for comment.

A diverse coalition of advocates, now united as NJ For Health Care, has long battled to address the issue of “surprise” out-of-network medical bills, which they said cost some 168,000 Garden State residents an extra $400 million each year. The group supports a proposal that would require providers to be clear about their participation in a patient’s insurance network; it would also protect the patient from excessive charges if treated by an out-of-network doctor in an emergency or other involuntary situation.

The broad-based support for the measure “is a demonstration of the ground swell of support coalescing behind the out-of-network bill,” said Assemblyman Craig Coughlin (D-Middlesex), one of the lead sponsors at Thursday’s event, who was joined by Assemblyman Gary Schaer (D-Bergen) and Assemblyman Troy Singleton (D-Camden).

Coughlin said it was “imperative for the legislature to act” and said he looked forward to continuing discussions with leadership to advance a plan to benefit residents and employers.

“It’s really time that they need to commit to moving this bill now,” added Maura Collinsgru, the healthcare program director for NJ Citizen Action, which is leading the coalition; the group also wrote to legislative leaders in August, requesting they take action. “It’s the best bill and there’s been extensive input.”

Collinsgru said the measure’s strength comes in part from a clause that allows self-funded insurance plans governed by federal regulations to opt to be included, in addition to those offered by insurance companies. This extends the protection to roughly two-thirds of New Jersey residents covered by public sector or union plans or by a hospital or other large employer policy. The change could save the State Health Benefit Plan alone as much as $140 million, advocates estimate.

Another benefit is the way the bill is designed to shield consumers from collection agencies while the dispute process plays out, Collinsgru said. Currently, patients can be harassed for months by calls that lead to medical debt and even catastrophes like foreclosure. “This offers protections from beginning to end,” she said.

Introduced in January, the measure (A1952/S1285)] was approved by one Assembly panel in June and awaits a hearing in the appropriations committee. The Senate version has yet to have a hearing, although one sponsor, Sen. Joseph Vitale (D-Middlesex), held meetings on the topic last summer and said he hopes it will move soon.

“The Legislature must get this bill over the finish line, and fast,” said Chuck Bell, program manager for Consumers Union, which has worked on the issue nationwide. “After all the hearings and negotiations lawmakers have undertaken regarding surprise bills, it’s grossly unfair to ask consumers to wait another year to get the issue resolved.”

But Prieto said lawmakers aren’t ready to close the book on the process. “This remains a continuing dialog and I look forward to continued work with (the sponsors) on this important issue,” he said Thursday.

While the measure has the support of an array of stakeholders — the New Jersey Business & Industry Association, AARP, and public and private unions — and has picked up well over a dozen cosponsors in the Assembly, not all stakeholders are in favor. Provider groups, hospitals in particular, remain concerned over the arbitration process outlined in the bill, which they say favors insurance companies.

Kerry McKean-Kelly, who handles communications for the New Jersey Hospital Association, said a task force NJHA convened on this topic has met regularly since the spring. The group has been talking with lawmakers and other stakeholders, seeking common ground, but she said the parties remain at odds on how payment disputes can be resolved.

As drafted, the measure would require providers and insurance companies who had exhausted other routes to resolving an out-of-network dispute to enter into binding arbitration, overseen by an outside arbitrator. The patient would not be involved. The final award would be determined within a set payment range, between 90 percent and 200 percent of the reimbursement provided by Medicare.

But providers said Medicare’s rates fail to cover their full costs and building a payment system on this foundation will only lead to further losses. “We agree that something needs to be done to protect patients from surprise medical bills,” McKean-Kelly said. “But the arbitration issue is so troublesome for providers that we have to stand firm.”

The Association of Health Plans New Jersey, which represents insurance carriers in the state, has said that while the bill is not perfect, it will support the measure.

Late last month, Horizon Blue Cross Blue Shield — the state’s largest insurance provider — was hit with a $76 million lawsuit for allegedly not paying claims to CarePoint Health, which operates three hospitals in Hudson County that left the BCBS network after a long-running dispute over reimbursements. Observers have suggested CarePoint’s actions underscore the need for out-of-network reform.

NJHA, however, favors a partial solution that would shield patients against out-of-network charges for emergency care and from hospital-based doctors, a design McKean-Kelly said would still provide the most extensive protection in the nation.

Collinsgru, on the other hand, said this approach would still leave patients vulnerable to surprise bills from out-of-network doctors who are not linked to hospital facilities. “It also leaves it up to consumers to navigate the system, which isn’t fair,” she said. “We need all providers playing by the same rules.”

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