Transparency in healthcare costs is becoming a major issue, with recent surveys revealing a vast disparity in charges for similar procedures throughout the state.
A bill introduced in the Legislature seeks to shed light on this problem by requiring the state to develop a database of medical, pharmacy, and dental insurance claims; healthcare utilization; and safety and medical outcomes.
The 2010 Affordable Care Act authorizes the federal government to foot the bill for developing the database, but states must indicate their intentions to do so by June 17.
While many healthcare advocates are in favor of the bill, it has met with resistance from some industry stakeholders.
The New Jersey All-Payer Claims Database Act (A-3603/S-2508), would require the Department of Banking and Insurance to collect the requisite data. It also would establish an arbitration process to resolve disputes between providers and insurers and would limit the amount that doctors outside a patient’s insurance network who work at an in-network hospital could be paid.
For many healthcare advocates, the bill is a good idea whose time has come. They argue that it would allow healthcare policymakers and providers to analyze the data and craft strategies to improve healthcare quality.
But some major healthcare stakeholders disagree. Their concern with various provisions of the bill is that they would allegedly increase costs without improving outcomes.
Bill sponsor Assemblyman Troy Singleton (D-Burlington) said collecting the data across the state would allow businesses to compare their health plans to those of their peers; consumers to have more information in making healthcare decisions; providers to design and target quality-focused healthcare initiatives; and legislators to learn from communities that provide cost-effective care.
“Comprehensive data about the quality and cost of healthcare allows all of us as policymakers to monitor the efforts to reduce healthcare costs and improve both care, quality, and population data,” Singleton said.
New Jersey Health Care Quality Institute chief of staff Jeff Brown said the database would help consumers sort out healthcare costs. He pointed to the recently released report by the federal government about how much hospitals charge Medicare for services. It revealed that New Jersey hospitals have some of the highest charges in the country
“We can’t contain healthcare costs without better information, if we don’t know how much services actually cost, or who’s doing a good job because we can’t see inside the healthcare system sufficiently,” Brown said.
Medical Society of New Jersey CEO Lawrence Downs said he supports the concept behind the database, but is concerned about how the data would be collected and what it would be used for. The society is the largest professional group for doctors in the state.
Downs said providers already have to deal with more than 800 reporting measures from the federal Centers for Medicare & Medicaid Services. He also believes that a state database should only use information from insurers and other payers, not information from providers. Downs also opposed a provision that would set a maximum amount that providers could charge for services, but wouldn’t object to settling disputes with payers through mediation as long as the charges weren’t limited.
With information from a database, “a lot of these disputes could be resolved very quickly,” Downs said. He praised the nonprofit FAIR Health database, which includes a large amount of claims data, although it isn’t as comprehensive as the database that would be created under the bill.
New Jersey Association of Health Plans President Wardell Sanders expressed concern that requests to insurers to provide information for all-payer claims databases in other states have presented challenges.
“I think there is an increasing frustration with the databases because of the costs,” Sanders said, noting that the bill would apply a fee to insurers to maintain the database.
While the doctors are concerned that the bill would limit the amount that they could charge for out-of-network services, Sanders said payers have a very different issue. He said insurers are worried that the maximum charge amounts would be too low since providers already bill too much to patients when the providers aren’t in their insurance networks.
Singleton said it was important that the bill include both the new database and an arbitration system that would allow payers and providers to resolve disputes.