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Controversial Insurance Bill Advances Even as Doctors Give Dire Warnings

Legislation to address ‘surprise’ out-of-network medical bills progresses in Assembly, hits snag in Senate as physicians crank up opposition

seniors paying bills

Physicians are ramping up their opposition to the Legislature’s effort to address out-of-network health insurance charges, as they claim the effort would reduce access to treatment and actually end up harming patient care.

The legislation, designed to increase the transparency of medical billing and slow the rising cost of care, cleared an Assembly panel on Monday in a vote split along party lines. But lack of support for the bill also led the Senate to cancel a committee meeting during which it was scheduled for discussion; Sen. Joseph Vitale (D-Middlesex), the primary architect, said those who continue to oppose the bill are being “greedy” and not focused on consumer concerns.

State Sen. Joseph F. Vitale (D-Middlesex) is the primary architect of the legislation.

The issue has been debated for nearly a decade and the latest proposal to reduce the impact of inadvertent out-of-network bills — or charges assessed during an emergency by providers who are not part of the patient’s insurance network — has the support of business groups, labor leaders, consumer advocates, insurance providers, and the state’s hospital association, with some amendments.

But physicians, particularly emergency surgeons and other specialists, continue to oppose the legislation, as drafted. While they support aspects of the bill that would force insurance companies and healthcare providers to better disclose details about the coverage network, some doctors don’t like the final mechanism to resolve billing disputes, which calls for an independent arbitrator to chose between a final offer from each party.

Why doctors don't like it

If enacted, doctors warn the proposal would reduce their leverage in negotiating with insurance companies and depress payments for all providers, regardless of their network participation. This in turn would force some specialists out of work or out of state; emergency physicians are particularly at risk, providers said, because they can’t offset their costs with a full schedule of office visits, since these would interfere with their ability to be on call for urgent cases day or night.

“I can’t be seeing 60 kids in the office in order to earn a living at these rates and be available when the hospital calls about your kid with the boomerang arm,” said Dr. Lawrence Stankovits, a Monmouth County based pediatric orthopedic surgeon — one of only 20 statewide — who serves six hospitals in three counties, and no longer participates in insurance networks. “I don’t want to be threatening, that we would leave the state, but the reality is if this passes our practice will not function. Six hospitals that are covered will not be covered.”

The intense debate over out-of-network rates is not new; the issue has become one of the most heavily lobbied topics in recent years, according to spending reports, and while providers support greater transparency, they have continued to oppose legislation that addresses the underlying charges. Consumer advocates have said some 168,000 state residents receive “surprise” medical bills annually, adding hundreds of millions of dollars to their costs, and at least $1 billion to the price of premiums.

Supporters of the Democratic-backed legislation began the year encouraged by the new political landscape; Assemblyman Craig Coughlin (D-Middlesex), a lead sponsor, was picked as the speaker — giving him huge power over what bills to advance — and Gov. Phil Murphy, a Democrat who has prioritized out-of-network reform, replaced former Republican Gov. Chris Christie in January.

The Assembly Financial Institutions and Insurance Committee held the first of three hearings on the bill in January; on Monday, the final meeting on this topic, it approved the measure along party lines, with Democrats in favor and Republicans opposed or abstaining.

Vitale stands firm

“This bill is bad policy. It’s analogous to taking a speck of dust out of your eye with a sledgehammer,” said Assemblyman Robert Auth (R-Passaic), one of the most vocal critics. If adopted, he predicted it would bring about a “devastation of the (surgeon’s) industry.”

Assemblyman Jon Bramnick (R-Union), a trial lawyer and frequent insurance critic, agreed. “We will start to lose the best and the brightest that are now in New Jersey. They will go to other states,” he suggested.

When it was clear the bill did not have enough support to also clear the Senate Commerce Committee — which was scheduled to take testimony on the bill Monday afternoon, about an hour after the Assembly panel concluded — Vitale, the lead senate sponsor and chair of the health committee, urged that it be pulled from the agenda. Lawmakers instead chose to cancel the meeting, which had little else on the agenda.

Vitale said he would continue to work with his Senate colleagues to help them understand the benefits of the bill, which has been amended multiple times over the year. Despite pleas from physicians for a different dispute-resolution mechanism, the senator said the so-called “baseball style” arbitration now included will remain.

“Someone has to step up and lead and be responsible, and that’s what we’ve done,” Vitale said, recounting how he and his colleagues — including Sens. Loretta Weinberg (D-Bergen) and Teresa Ruiz, (D-Essex), and Assemblymen Gary Schaer (D-Bergen) and Troy Singleton (D-Burlington) — have held dozens of hours of meetings with stakeholders to hash out details of the bill. “Many of those who are left (not supporting the bill) are just being greedy and don’t care about consumers,” Vitale said.

‘It will destroy me’

The 26-page bill (A2039) is focused on emergency out-of-network charges only — not bills that patients receive because they choose to see a certain physician that are not part of their coverage plan. While New Jersey law prevents patients from being held responsible for these costs, over and above what they would pay in-network, non-network physicians are still allowed to bill insurance companies for the full cost and these charges get passed on to all consumers, advocates argue.

But doctors insisted the legislation doesn’t take into account the current reality, in which insurance companies routinely deny or delay payment — a situation that becomes especially challenging for physicians who are not part of a network and who said they are forced to negotiate most payments. (The insurance industry has denied widespread abuse.) It will also destroy their ability to provide free or discounted care, which some said they can now afford to do, thanks to the reimbursements they can recover from other procedures.

“The way this bill sits now, it will destroy that. It will destroy me. It will destroy these patients,” warned Dr. David Dupree, a pediatric orthopedic surgeon based in Ocean County, who said he is frequently called in to the emergency room in the middle of the night. “I would have to pack up and leave the state. That’s real. That’s not a scare tactic,” he said.

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