After nearly a decade of debate, New Jersey lawmakers are sprinting to the finish line with a plan — already endorsed by the governor — to curb the impact of “surprise” medical bills, after amending the legislation to secure support from the hospital industry.
Two powerful Senate committees voted last Thursday to approve the revised version of the controversial proposal to increase transparency about healthcare billing and rein in emergency and other unexpected charges from providers who are not part of a patient’s insurance network. While hospitals are now on board, many physicians still oppose the bill, which they claim will drive them out of state, or out of business, harming patients in the process.
The legislation, spearheaded by Assembly Speaker Craig Coughlin and Senate health committee chairman Joe Vitale (both D-Middlesex), cleared initial hurdles in the Assembly last month and is now poised for a final vote later this week, when both legislative houses are scheduled to vote for the last time this month. Democratic Gov. Phil Murphy is expected to sign the measure, which he singled out for support in his budget address in March.
“Ten years is a long time. We, I believe, have finally come to the place where the majority of those who have had opinion about this legislation, in one form or another … are now in agreement,” Vitale, who has led much of the detailed discussion over the years, said Thursday before the start of several hours of testimony.
Similar legislation in dozens of states
“There are those who are still in disagreement. But the vast majority of those who have been involved with this process are in agreement,” he said, adding that New Jersey needed this critical patient protection, versions of which have been adopted in dozens of other states.
The proposal has strong support from patient advocates, labor, business leaders, municipal officials, and others who stress that these unexpected medical bills cause stress and economic hardship for some 168,000 Garden State residents each year and add roughly $1 billion to insurance costs; insurance companies, forced to cover much of these costs, also back the reforms. The problem also adds as much as $800 million to taxpayer’s tab to insure state workers, supporters of the reform note.
Many physicians, however, insist the legislation will only harm patient care. While they support changes to require greater disclosure from providers and insurance companies about what network coverage entails, doctors — emergency and other specialists in particular — fear the changes will reduce their already limited leverage with insurance companies, drive down reimbursement rates, and leave them little choice but to close their practices or relocate to less regulated states.
Doctors at risk
Independent physicians are particularly at risk, noted Dr. Savros Christoudias, a second-generation surgeon in Bergen County and an officer in the Doctor Patient Alliance, a nonprofit focused on improving care. Small practices — which are already less profitable than larger ones — don’t have the market strength to negotiate higher reimbursement rates or a legal team to regularly contest claims, he said, and the proposed bill would only exacerbate this problem.
These and other challenges — like the struggle to recruit new physicians — have led to a shrinking pool of local doctors, said Christoudias; Bergen County now has half the surgeons it did when he was young, but more than twice the population. He has also applied for a medical license in New York State and is searching for office space in Rockland County.
“We’re stretched thin in what was once a strong army of capable surgeons readily available to rescue a patient in free fall. Were down to a shadow of (our) former self,” said Christoudias, who is in practice with his wife and employs about a dozen staff. “And now I might have to leave my father’s legacy behind.”
When it comes to out-of-network reform, hospital officials have taken a more nuanced view. While supporting most elements of the Coughlin/Vitale bill, the New Jersey Hospital Association lobbied to change language that they said would have skewed too low the payments reached through an arbitration process and strung out negotiations over disputed claims. They also wanted more disclosure from insurance companies about their claims practice.
The amendments to the bill (S-485) approved last week, address many of these concerns. For one thing, they require insurers to make public information about claims denials and “downcoding,” in which treatment is reclassified to reduce reimbursements.
For another, the changes shorten the timelines for insurance companies to contest claims and for an arbitrator — an outside expert hired by the state to resolve disputes between providers and payers — to issue a final decision. And they eliminate a range of hotly debated conditions (like average costs, physician training and experience, and patient characteristics) the arbitrators were to consider, instead requiring them to select from the two final offers: the providers charge or the insurance company’s proposed reimbursement.
Long-running policy debate
NJHA president and CEO Cathy Bennett, the former state health commissioner, said the amendment “brings to the finish line” what was one of “Trenton’s longest-running policy debates,” and thanked Coughlin, Vitale, and Senate President Steven Sweeney, (D-Gloucester).
For hospitals — which spend some $15 million annually contesting medical bills, two-thirds of which end up in their favor — she said the goal has always been to balance consumer protection with a level playing field for provider negotiations with insurance companies, something the amendment achieves.
“In the end, it was that shared commitment to the healthcare consumer that has brought us to a point where New Jersey is poised to enact a sound compromise bill that puts patients first and protects them from surprise medical bills,” Bennett told NJ Spotlight.
Patient advocates agreed. Catherine Hunt, an activist from Central Jersey, said thousands of members from local chapters of the grassroots group Indivisible have pledged support for the bill and are eager to see Murphy sign it “as soon as possible” this year.
New Jersey Citizen Action’s Dena Mottola Jaborska noted that state law already protects patients from out-of-network charges in emergency situations. But the legislation would extend this benefit to individuals who select in-network hospitals or physicians for non-emergency care, but still end up with out-of-network treatments — from an on-call specialist or outside medical lab — without their knowledge of the coverage gap. A 2016 study by a pair of Yale University economists suggests this impacts at least one in five patients.
It would also allow federally regulated insurance —- which cover more than half the state’s residents — to follow the same guidelines, if they wanted, Mottola Jaborska said.
“We’re picking up a lot of important protections with this legislation,” she added. “If we don’t put a check on surprise medical bills people will continue to get victimized by these charges and our costs will continue to get driven up.”