Consumer advocates, insurance companies, hospitals, and physicians believe it is high time for New Jersey to do more to protect patients against surprise bills from out-of-network healthcare providers.
They have good reason to be concerned: Unplanned out-of-network charges have become a growing problem as more and more patients find they owe hundreds if not thousands of dollars for treatments — often specialist care — even when they try to select a provider who is part of their insurance network.
But they remain at odds over whether the state should also try to control the underlying clinical costs and, if so, how to craft a solution that is fair to all involved.
That was the take-away from NJ Spotlight’s Roundtable, “Ending the ‘Surprise’ Factor in Medical Bills,” held Friday at the War Memorial in Trenton. The event — sponsored by Aetna, New Jersey Hospital Association, and AARP (and moderated by the author) — included animated debate over longtime sticking points, but also a shared commitment to keep working toward a comprehensive solution.
“We need to solve this now and move on to bigger issues,” said Linda Schwimmer, president and CEO of the New Jersey Health Care Quality Institute, and a panelist.
Schwimmer and others said stakeholders need to conclude the out-of-network debate so they can work together to address the potential impacts of the repeal of the Affordable Care Act and other seismic policy changes under consideration by the administration of President Donald J. Trump.
Consumer advocates said out-of-network bills now add some $400 million in costs for 168,000 New Jersey residents; the system also adds hundreds of millions to the state’s healthcare bills for its workers. Potential solutions have been under debate for eight years, as bills have evolved from requiring greater network clarity to also addressing physician costs.
“This is the health equivalent of car jacking,” explained Citizen Action’s Maura Collinsgru, who represented consumer concerns on the panel, which she hoped would “tee up legal action” on the bill this year.
Sen. Joe Vitale (D-Middlesex) who has led the effort in the Senate, said the bill (S-1285) may continue to evolve in an effort to ensure it is as balanced as possible to all the parties involved. The measure had several hearings last year and was amended again in December, when the process stalled.
Higher prices drive up costs for everyone involved, from the insurance companies to small businesses to patients themselves, Vitale explained. “The money comes out of someone’s pocket,” he said.
Doctors have said their out-of-network rate is what it takes to cover their costs and make a living; signing an in-network contract with insurance companies requires they take a discount in exchange for a promise of more patients. Many physicians feel insurance companies are offering subpar rates that “disrespect” their training and responsibilities. They also claim they have no leverage in negotiating contracts with insurance companies in today’s market.
Many healthcare providers believe the issue of patient protections should be broken out and addressed with requirements for greater disclosure and transparency by insurance companies and providers, so patients know exactly who is in-network and not. But, when this was discussed at the Spotlight Roundtable, several panelists — including Vitale — felt strongly that patient protections could not be addressed without getting at the underlying issue of cost.
“Price gouging … shouldn’t be a solution” said Evelyn Liebman with AARP. She pointed out that Medicare addressed out-of-network charges nearly 20 years ago and other states — including New York, Illinois, California, and Florida — have passed laws related to out-of-network charges. “Clearly we can do better” in New Jersey, she added.
“Patients need actionable information” on what they can do to avoid these charges, added Schwimmer.
Neil Eicher, vice president of Government Relations and Policy for the Hospital Association, said, “We agree patients should not be the middlemen” in billing disputes.
But Eicher noted that laws approved in other states are narrower than the legislation under consideration here. In fact, while they apply to physicians, they don’t include hospital systems in the regulations. The way hospitals subcontract for certain services makes it challenging to regulate them the same way as physician groups, he said.
Aetna’s director of government affairs, Larry Lewis Jr., said that despite the apparent controversy, the vast majority of hospitals and doctors are in-network with his company — and most others — in New Jersey. The problems are only caused by a handful of “outliers” that charge exceedingly high rates.
Insurance companies — one of the most heavily regulated industries nationwide — have varied responsibilities, Lewis stressed. They must control costs for the business owners, governments, and others who purchase policies while also providing care that meets certain quality benchmarks.
“Our product is only as good as our network” of healthcare providers, Lewis said.