Out-of-network debate restarts in Assembly

Familiar faces, and some new ones, reintroduced the out-of-network debate in the Legislature on Monday.

The Assembly Financial Institutions and Insurance Committee met for the first time in the new legislative session with its new chair, Assemblyman John McKeon (D-Madison).

In the ongoing debate over crafting policy to prevent consumers from facing costly surprise bills, the same sticking points from previous years emerged, as well as a key limitation: Anything the committee or Legislature does only affects 30 percent of the state’s population. At least 70 percent of the state’s insurance comes from self-funded plans, which are regulated by the U.S. Department of Labor.

There is a two-part problem that needs to be solved, which in previous years has seen either two separate pieces of legislation introduced, or legislation that combines the two issues.

The first is transparency. That is, forcing insurers to pre-adjudicate claims and help patients figure out exactly what their anticipated out-of-pocket expense will be.

The second is to ensure that, if a consumer interacts with a provider that is not in-network with insurers, and therefore does not have a pre-negotiated charge for a service, the consumer can arbitrate the bill and be held harmless.

On the second, proposed legislation calls for some style of arbitration — which experts say already exists in the state — and to allow any self-funded plans that want similar protections the option of opting in, since the plans are regulated federally.

Larry Downs, CEO of the Medical Society of New Jersey, told the committee that a form of arbitration already exists in the state, and is under the purview of the Department of Banking and Insurance.

Downs said the arbitration is regularly monitored by MSNJ, and, as of November 2016, independent claims processing has been capped.

The missing piece of patient protection in the state, Downs said, is transparency.

Without a clearer picture of what costs are anticipated — if all doctors and members of the care team are in-network — patients can avoid most surprise bills, Downs said.

Cathleen Bennett, former Department of Health commissioner and current CEO and president of the New Jersey Hospital Association, also testified at the hearing Monday.

Bennett said that part of the failure to pass legislation in the past has to do with the sticking point of the shift in power.

If the state were to mandate a formula for providers to be paid in out-of-network situations, it takes negotiating power away from the doctors and hospitals if they feel an insurer is low-balling them for the contract.

At any point in time, as has happened in the past with some hospitals and continues to happen for some doctors, the provider can use out-of-network as a last resort if negotiations aren’t going well.

Certain specialists are some of the most egregious out-of-network billers, which is where some of the worst stories of high bills come from.

But, as experts noted Monday, these costly surprise bills have originated from a variety of doctors and health care providers — not just a niche group.

Downs said that transparency legislation should be passed first, since that is a key element that is easy to pass, but is being “held hostage” while the rest of the out-of-network debate continues.

Mary Beaumont, with the New Jersey Business & Industry Association, said health care costs continue to be a major concern for employers, and any legislation that can help curb the increase is supported by the group.