Murphy signs out-of-network bill, still the subject of contention

Gov. Phil Murphy signed a bill Friday ending a decade-long battle to address the cost and impact of expensive surprise medical bills for residents in the state.

“Today, we’re closing the loophole and reigning in excessive out-of-network costs to prevent residents from receiving that ‘big surprise’ in their mailbox,” Murphy said. “At the same time, we’re making health care more affordable by ensuring these costs are not transferred to consumers through increased health premiums.”

The bill that finally passed this year was sponsored by Assembly Speaker Craig Coughlin and Sen. Joseph Vitale (both D-Woodbridge).

Vitale said the bill helps patients become better consumers of health care.

“This law empowers the insured as consumers with the right to have the details of in-network and out-of-network services and fees clearly spelled out from the onset of coverage, not once they’re in the emergency room or a hospital bed. Protecting people at their most vulnerable is government at its very best.  Today, we are at our very best and New Jersey has a lot to celebrate,” he said.

Coughlin said the bill puts New Jersey’s families first.

We are making health care more affordable in New Jersey and making the system more efficient,” he said. “This is real cost savings and less stress for New Jersey families when they need help the most. I thank Gov. Murphy for signing this bill and Sen. Vitale for his partnership, along with that of Assemblyman (Gary) Schaer, Sen. (Troy) Singleton and Assemblywoman (Pamela) Lampitt. This bill has been too long in the works, but we finally got it done — and that’s to the benefit of all New Jersey families.”

The new law has been lauded by some, including Joel Cantor with the Rutgers University Center for State Health Policy, and Cathleen Bennett, CEO and president of the New Jersey Hospital Association, as a step in the right direction.

The New Jersey Business & Industry Association also voiced its support for the new law.

“This legislation signed today by Governor Murphy is a fair solution to the difficult long-standing problem of how New Jersey health care providers bill patients for out-of-network medical services,” Michele Siekerka, NJBIA’s CEO and president, said in a statement. “It’s a solution that is fair to health care providers and consumers alike because it strikes a balance between providing reasonable compensation to facility-based providers, while protecting consumers from unexpected, non-negotiable bills that drive health insurance premiums higher. …

“This was an extremely difficult and complicated issue, and NJBIA commends the governor and the bill sponsors who worked hard to address the concerns of all stakeholders. We believe the end result is a good one.”

But the bill has its fair share of critics in the provider world — especially since regulations already exist to address surprise bills.

The new law calls for disclosure and clarity of network status, out-of-network billing procedures, arbitration and provider network audits.

It also increases transparency in pricing for health care services.

All of this is said to help curb costs within the overall health system — and some have said it would help lower premiums for health insurers, since they will have more control over expensive out-of-network doctors.

But that has been rejected by the New Jersey Association of Health Plans and the Center for State Health Policy.

John Fanburg, a health care attorney with Brach Eichler, said the bill was mostly disappointing.

“I believe this is a pro-insurance company bill and does nothing for the consumer that isn’t already in the books,” he said.

That being said, there is at least one benefit.

“I think all providers and patients are happy in terms of the enhanced transparency and information being afforded patients and consumer in New Jersey that the bill does address in a positive way,” he said. “But I think they put additional burdens on an already burdened physician community with regard to their ability to be out of network if they choose because of low or poor reimbursement proposals by payors. And it creates a further unequal negotiating relationship between providers and insurance companies.”

The New Jersey Doctor-Patient Alliance, an independent coalition of providers, echoed the point that the law benefits insurers.

“The NJDPA is extremely disappointed that the governor ignored the voices of patients and doctors and instead sided with big insurance carriers. We had hoped he would have conditionally vetoed this legislation to make it fairer to the patients and small business owners that will be hurt by this law. Nevertheless, we will continue working on legislative remedies to ensure New Jersey’s most talented doctors and medical professionals don’t leave the state,” said Peter DeNoble, president of the alliance.

Another criticism of the bill is that it only affects a small percent of the state’s population, since 75 percent of those covered in New Jersey are part of federally-regulated self-funded plans.

The law does allow these plans to opt into the law, and seek protection against surprise bills through the established arbitration method.

But there has already been a threat of legal action against the state for including this provision.

The bill also requires annual reports on the savings policyholders see as a result of the new law.

But stakeholders are looking forward to working on the specifics with the regulatory body — the Department of Banking and Insurance.

Jeff Shanton, president of the New Jersey Association of Ambulatory and Surgery Centers, said, “While we are disappointed that the governor signed the bill into law, and without any changes, we look forward to working with the administration on its implementation, in order to promote the best interests of the patients we serve.”