The nearly eight-year campaign to rein in “surprise” medical bills in New Jersey — and better control escalating healthcare costs — will likely continue into 2017, as advocates for healthcare providers, payers, and patients have failed so far to reach consensus on how best to resolve out-of-network insurance disputes.
After a weekend of last-minute negotiations, Garden State lawmakers were prepared to vote Monday on an amendment that would have secured support from hospital leaders and possibly other healthcare providers. These stakeholders had vehemently opposed another version of the plan that would have capped their payments at a percentage of Medicare in an effort to stabilize the system and protect patients from unforeseen expenses.
But word of those changes prompted a new round of questions for others involved, including insurance companies, and the bill’s sponsor, Sen. Joseph Vitale, (D-Middlesex), asked Democratic leaders to postpone the bill’s hearing in the Senate Budget Committee. The committee currently has no other meetings scheduled this year.
Despite the delay, Vitale and others said they remain hopeful the issue will be resolved. “I remain confident that efforts of working to build consensus will result in the strongest consumer protection out-of-network bill in the country,” Vitale, the longtime Senate health committee chairman, said.
The measure would make New Jersey one of a handful of states, including California and New York, to have regulated out-of-network charges, and it has prompted significant attention from powerful healthcare industries and their lobbyists this year and a
flurry of research from stakeholders seeking to shore up their arguments. Monday also brought a fiery press conference in which Republican leaders joined physicians to place most of the blame on insurance companies.
Charges from doctors and hospitals that are outside of a patient’s insurance network have become a growing concern; advocates for reform in New Jersey said 168,000 New Jersey patients now pay an extra $400 million a year in unexpected bills for unplanned, but non-emergency, out-of-network care. The rising costs behind these charges also added $1 billion to Garden State premium costs, they note, driving up costs for both public and private employers.
But patients aren’t the only group impacted by the current situation, in which costs are determined by a largely hidden matrix of government regulations, physician contracts, and insurance agreements, among other elements. Insurance companies have complained they are at the whim of healthcare providers, who can raise costs as they see fit; they seek a system that involves better cost controls. On the other hand, doctors and hospitals have argued that insurers have the upper hand in how they craft their coverage networks and establishing rates; these providers prefer a solution that reflects market rates for medical treatments.
The rancor is illustrated by a lawsuit filed in September by Carepoint Health, a Hudson County hospital chain that has remained out-of-network with a number of insurance carriers, seeking to recover an alleged $76 million in unpaid claims from Horizon Blue Cross Blue Shield.
Led by the New Jersey Association for Health Plans, insurers had pledged to support an Assembly version of the reform bill (A-1285), championed by Assemblyman Craig Coughlin (D-Middlesex), that looked to federal Medicare rates to establish a payment scale for any out-of-network disputes. Re-introduced in January, the Assembly bill was approved by a committee in October, while discussions continued in the Senate.
The reliance on Medicare to establish out-of-network rates prompted significant concern from healthcare providers, who noted that the federal insurance program for seniors already pays less than the full cost of any treatment. It is also a rapidly evolving program that should not be used as a base for reform, they said.
But members of the New Jersey Hospital Association had agreed to support the concept developed in recent weeks, and finalized during weekend negotiations, which would have relied instead on a more market-based approach, observers said. This compromise involved a three-part test — based in part on a model used in the federal Affordable Care Act — to establish an interim payment, with the final cost to be determined by baseball-style arbitration, in which both parties submit a price and an arbitrator picks one.
“We’ve had good and productive discussions with the sponsors on amendments, and we hope that this momentum will continue with other stakeholders, so we can finalize a bill to protect consumers,” added Kerry McKean Kelly, vice-president of communications for the Hospital Association.
Vitale said the discussion “resulted in making great strides with the Hospital Association” but agreed to hold the bill to ensure insurance companies and others can weigh in. “Over the course of this past weekend, we have heard from a number of stakeholders who have long supported the bill, asking that we allow additional time for them to understand the substance of the results and the discussions with the Hospital Association,” he said.
While the Medical Society of New Jersey and other physician groups who have opposed Medicare-based caps are frequently aligned with the hospital industry on the issue, it was not clear Monday if they would also support the potential amendment. MSNJ submitted testimony to the Assembly in October that indicated they would support elements of the solution preferred by the Hospital Association.
But on Monday, the group — joined by a number of Republican legislative leaders — held a press conference to underscore their opposition to the Assembly version and target insurance companies for driving up costs and forcing medical professionals to set up practices in other states.
“This legislation — don’t be fooled — is an attempt to bring all these doctors under the control of insurance companies,” GOP Assembly Leader Jon Bramnick said. “The only way this system stays a great system is we allow doctors independence. And this does just the opposite.”
For consumer advocates, the bottom line is protecting patients and holding down costs over time. Maura Collinsgru, who leads the NJ For Health Care coalition for New Jersey Citizen Action, said her members can support either mechanism for resolving disputes as long as the method is fair and balances the interests of providers and payers, if the core patient protections are kept in tact.
Both versions of the bill seek to increase transparency around health plans and physician network status and would protect patients from being balance-billed, or invoiced for any costs left over after the insurance company settles with healthcare providers. While current state law prohibits insurance plans from balance billing patients, these consumers can still receive charges from providers. The measure would not apply to so-called self-funded plans, like those held by many large companies or the federal government, which aren’t regulated by state insurance law, but these employers could choose to opt in and benefit from the potential savings.
“There is a consensus this is a problem that has to be fixed and it has to be fixed now,” Collinsgru said. “We need to end this problem.”