Lawmakers Seek to Protect Consumers From Unexpected Out-of-Network Healthcare Bills

Consumers around the country have complained about out-of-network billing by physicians who are not part of their health plan but took part in their care, often during an emergency. In New Jersey, the phenomenon has now prompted a proposed law to rein in the practice, relying in part on arbitration to settle disputes.

A story appearing Sunday in The Record of Hackensack, N.J., detailed cases in which patients who were mindful of the need to use in-network hospitals did so—but they got stuck with enormous bills anyway, because specialists who were called to handle their unique needs were not in their health plan’s network.

These patients were in the dark about the distinction until the bills arrived. In one case, a new mother was billed $24,000 from an out-of-network neonatologist who treated her baby who wasn’t breathing. The family of a 15-year-old skier injured in upstate New York drove him several hours to Hackensack, N.J., for surgery at an in-network hospital, only to be billed $73,000 by the out-of-network orthopedic surgeon who repaired his shoulder.

Sponsors of the New Jersey legislation, which is now part of the crush of bills to be handled before the state budget deadline of June 30, 2015, seek to do 2 things:

· They want to prevent patients from being billed more than in-network rates if care is provided in an emergency, or by physicians at a hospital that is part of the patient’s insurance plan.

· For other contested matters, lawmakers want to use an arbitration system to settle disputes, rather than use a cap system that was previously discussed.

Democrats behind the arbitration measure say it will promote reasonableness on both sides, since neither will want to risk everything in arbitration.

The concept of paying in-network rates to physicians who treat patients in an emergency isn’t new—it was discussed in a commentary this spring by 2 leading physicians in JAMA Surgery. The authors were writing about the need for the healthcare system to address consumer backlash over bills sent by specialists who consult on cases, sometimes unexpectedly. At times, they noted, patients did not even know these doctors had treated them until they received the bill.

Physician groups, meanwhile, say that they must maintain the ability to bill apart from health plans, because the fees some health plans pay are too low, even below Medicare.

The physicians writing in JAMA Surgery said quality of care is typically not the issue—and the patients who spoke with The Record agreed. But the physicians wrote that sending a patient a giant bill he or she is not expecting breeds feelings of distrust that the healthcare system must work to avoid.

The physicians writing in JAMA Surgery also wrote that bundled payments may offer a long-term solution. With bundled payments, the health plan would pay the hospital a set fee for a procedure, and it would be up to the hospital to settle with all physicians involved in a patient’s care.