Rule change could ease insurance burden for parents

NJ vote would allow Medicaid patients to be treated at specialty hospitals out of state
Credit: (Michael Perez/AP Images for Siemens)
File photo: Patients and parents at Children’s Hospital of Philadelphia; access to Children’s Hospital and other out-of-state facilities could become much easier for thousands of New Jersey children with complex care needs covered by Medicaid.

Deb Acerno’s five-year-old daughter has a long history with Children’s Hospital of Philadelphia, where she was born with more than two dozen complex medical issues and spent the first 18 months of her life.

While Acerno’s family lives in South Jersey, they return 10 or more times a month to see the same Children’s Hospital clinicians who have long treated young Adeline, even though the facility is not in her Medicaid network and the process requires reams of regular paperwork.

But this routine could soon be simplified for Acerno’s family and thousands of other New Jersey families with children whose complex care needs are covered by Medicaid. After weeks of negotiations behind the scenes, state lawmakers passed a bill Thursday that changes how the public insurance program in New Jersey defines “network adequacy” for pediatric primary and speciality care. The change would likely force Medicaid policies — which are issued by a handful of private insurance companies — to include more out-of-state facilities in their plans.

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“Specialized care can’t be delayed or easily replicated,” said Tom Baffuto, executive director of the Arc of New Jersey, one of a number of children’s advocates who testified in favor of the proposal at a legislative hearing earlier this month. He said the proposed change would “help eliminate barriers to care for some of the state’s most vulnerable children.”

Children with complex health needs

The bill, championed by Assemblyman Dan Benson (D-Mercer) and Sen. Loretta Weinberg (D-Bergen), was approved with amendments by the Assembly Human Services Committee two weeks ago following passionate pleas of support from parents of children with complex health needs. Committee Chair, Assemblywoman Joann Downey (D-Monmouth), said 700 other people had indicated their support on paper. The measure, approved by the Senate unanimously in March, was further amended before final passage in the Assembly Thursday by a vote of 71-0, with three abstentions.

Advocates for individuals with disabilities said these families have long struggled to find proper and accessible care for children with complex medical needs under the state’s Medicaid system, especially in rural areas. Under the current system, Medicaid insurance plans must cover appropriate care — even if not in state or within their network — but the process is guided by individual agreements tailored to the patient. The legislation that passed Thursday would essentially allow all children under the plan to have access to a number of out-of-state providers even if proper care exists closer to home without any special paperwork.

Not everyone is in favor of the proposed change. The New Jersey Association of Health Plans, which represents the five insurance companies that offer Medicaid plans, said the current system works. And allowing open access for all children, regardless of medical complexity to out-of-state specialty hospitals like the Children’s Hospital of Philadelphia, where some procedures are priced higher than at similar sites, will raise the cost of the taxpayer-funded insurance program, according to the association.

NJAHP President and CEO Ward Sanders told the Assembly committee the state already has some of the strongest network adequacy requirements in the nation and compliance is regularly reviewed by regulators. A survey by the association of 2019 data showed that two of the five Medicaid plans available in New Jersey funded nearly 60,0000 visits by almost 14,000 patients to out-of-state facilities that year combined, the vast majority of which were in Pennsylvania.

What critics say

In addition, Sanders said passing the legislation as is, without any price control mechanism, will drive up the cost of the Medicaid coverage for the state, which contracts with the insurance companies to provide the publicly funded plans. If insurance companies are forced to include certain providers, those clinicians have significant power to negotiate higher prices, he said.

“There are economic forces behind this and that is our concern and is why we think taxpayers will be on the hook for a whole lot more for the Medicaid program if this bill was enacted,” Sanders told the committee. Nonpartisan legislative staff members in the Office of Legislative Services have been unable to determine the expense involved with the proposal, but Sanders said someone eventually will, and “we believe (it) will be quite substantial.”

The legislation (S-3000), first introduced in the fall, would require the state Department of Human Services, which oversees Medicaid, to amend its next contracts with the insurance companies so that pediatric specialists are more easily accessible for the majority of patients. Currently, the law requires plans to have a specialist within 45 miles or 60 minutes of travel time for all families.

Under the bill, pediatric specialists would need to be available within 15 miles or 30 minutes for those in urban counties, and 40 miles or 60 minutes for those in more rural areas. It sets a special metric for pediatric oncologists and specialists who treat behavioral and developmental issues of 10 miles or 20 minutes in urban areas, and 30 miles or 45 minutes for those in rural counties.

The measure also creates a grievance process for families frustrated with their insurance plans, a common occurrence according to parents who testified before the Assembly Human Services Committee. And it allows insurance providers to seek a waiver if they are unable to meet the new requirements and calls on them to report out-of-state visits to lawmakers each year.

One pediatrician’s perspective

Dr. Alan Weller, a pediatrician in New Brunswick, said time and distance requirements for insurance plans are not perfect tools, but objective standards are important. He would also like to see things like wait times, hours of operation and new patient acceptance rates included in adequacy metrics. “Remember, having an insurance card does not equate to having access to care,” he said.

Weller said he also wants Medicaid to raise reimbursements for physicians, which he said would enable the program to recruit more providers. There is no requirement that physicians accept Medicaid and New Jersey’s reimbursement rates remain relatively low. “We really believe that network adequacy also entails making sure we have the ability to provide all services to all children within the state of New Jersey,” Weller said.

But for Atlantic County resident Liz Parlett Butcher, a mother of four children — including two with special needs — ensuring treatment at the Children’s Hospital of Philadelphia is fully covered is most important. Butcher said whenever she takes her special-needs children to a hospital nearby, clinicians quickly determine it is beyond their abilities and tell her to take them to CHOP, which delays access to care.

Parents are “fried beyond fried” negotiating the insurance process, she said, a situation that is even more challenging for those with language or cultural barriers.

“Our children should not have to wait for care. It’s time that can’t be recovered,” Butcher said.

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