New Jersey Lawmakers to Take Up Out-of-Network Billing

This week, legislators in New Jersey will discuss a bill that seeks to cap what consumers pay for emergency and involuntary out-of-network services. Lawmakers in one committee of the New Jersey Assembly approved the bill in June, and on Thursday, it will be heard in the Appropriations Committee.

Plenty of attention has been given to the problem of surprise medical bills in New Jersey, which has seen increased competition and merger activity among hospitals, as the market responds to changes brought by the Affordable Care Act in this densely populated state.

The rise of narrow networks, and the phenomenon of patients seeing a single specialist in an emergency who is not part of their network—even after they made the effort to use a hospital that was in-network—have made headlines here. POLITICO New Jersey reported that the bill being discussed this week is the second-most lobbied legislation in the first 6 months of 2016.

As New Jersey takes up the issue, brand new research in The American Journal of Managed Care shows just how difficult and uncommon it is for a typical consumer to challenge an out-of-network bill.

Kelly A. Kyanko, MD, MHS, and Susan H. Busch, PhD, published the results of a nationally representative survey, which found that only 19% of patients negotiated their out-of-network bills, and those that did only had success 56% of the time. When patients did try to negotiate, they were more likely to have success if they worked directly with the provider than with the insurer, Kyanko and Busch found.

In a piece written for The Hill, Kyanko said even with her expertise, it took 9 phone calls and more than 2 hours to negotiate her own improperly charged bill, and most patients give up. “This issue has become more important with the increase in ‘narrow network’ plans that offer low premiums but a limited choice of doctors and hospitals,” she wrote, and is a reason why medical debt is rising.

When New Jersey Assembly members first heard their bill in June, the group New Jersey Policy Perspective said an average of 168,000 people receive an unexpected bill each year, averaging $2500. A coalition called NJ for Health Care, which represents business, labor, and consumer groups, has formed to advocate for passage of the bill, which has a counterpart in the New Jersey Senate.

Lawmakers are acting as New Jersey’s Department of Banking and Insurance is moving aggressively to enforce what rules are available to protect consumers. On September 21, 2016, it fined UnitedHealthcare $300,000 and ordered the insurer to redo claims that had balance-billed patients for out-of-network charges.

However, the department’s order said while regulations protect consumers from paying more than they would pay in-network in an emergency, it doesn’t spell out what insurers must pay providers. And that’s caused some high-profile disputes between some hospitals and insurers, including dueling lawsuits between Horizon Blue Cross Blue Shield of New Jersey, and the CarePoint group.

Attempts to pass a bill at the end of 2015 failed as provider groups said the effort would take away any leverage they had to deal with insurers over what they are paid. A task force has been meeting since that time.

Key components of the bill would:

· Protect consumers from collection agencies while medical bills are being disputed.

· Create an arbitration process to resolve disputes, which would not involve the patient. (The state’s hospital association opposes this provision.)

· Shield patients from out-of-network rates for emergency care from hospital-based doctors. (The hospital association supports this provision.)