(Editor's Note: This report was updated at 10 a.m. Friday with comments from Scott Evelyn of Cigna.)
NJBIZ asked leaders in various segments of the health care industry for their reaction to the comprehensive out-of-network reform bill introduced Thursday by state legislators.
Their responses, in alphabetical order:
Senior vice president of communications, CarePoint Health
This bill is a massive gift to large insurance companies, and a shot across the bow against the Medicaid population and undocumented citizen population.
Earlier this week, we proposed an alternative form of payment reform in an effort to find a comprehensive solution that will sustain our health care system and provide equitable reimbursement for patients regardless of their insurance status and the neighborhood they live in.
We are concerned at the short time frame in which such comprehensive legislation is being pursued. Not only will this legislation not save any money as being suggested, but will actually cost the taxpayers between $300 million and $500 million.
Director, Rutgers Center for State Health Policy
(The bill) seeks to address the out-of-network pricing problem by placing limits on service charges within a broad range and encouraging providers and health insurers to negotiate within that range. If they can’t come to agreement, then the final decision would be made by arbitration. It seems like a reasonable way to go.
Senior policy analyst, New Jersey Policy Perspective
This bill represents much-needed landmark health policy to reduce excessive waste and surprise billing, which is making critical medical care unaffordable for thousands of struggling New Jerseyans. It promotes fairness and transparency by requiring all relevant parties to give advance notice to consumers of their costs and their rights. It also strengthens current law to avoid out-of-network costs entirely when the consumer did not request the provider.
The bill also smartly requires that the data which is used to determine the final arbitrated cost of out-of-network care be shared publicly to further improve medical care and reduce costs. All New Jerseyans will benefit from these long overdue improvements in the state's health care system.
Chief executive, QualCare
This bill is a good first start. Clearly, the current system is broken and I don’t know if everyone realizes that it really does affect the consumers and the employers and the unions, as well as the taxpayers, who are paying the bills for out-of-network services. So this affects everyone’s cost, not just the individual who goes out of network.
We have to make sure the (health plan) member is held harmless and there is no chance for the provider to balance bill the member. When I go into a hospital, there is no sign posted that says the radiologist, the anesthesiologist, the pathologist don’t participate with QualCare or Horizon or Aetna. There is no way as a patient you would know that. And you go in because your doctor participates and the hospital participates (in your health plan). And then these bills start coming, and you don’t understand why they are coming. You think you followed the rules.
As consumers are starting to pay more and more out of pocket for deductibles and co-insurance, the cost of health care is becoming a significant economic issue for families.
This is about protecting consumers, all consumers, whether they stay in-network or out-of-network. Because the cost of out-of-network health care is spread among everyone.
Chief executive of The Medical Society of New Jersey
This bill will have a dangerous and deleterious effect on health care quality in New Jersey. By requiring physicians to accept network rates when there is, in fact, no contract between the physician and insurer, the bill takes away physicians' ability to negotiate with insurance companies for fair contracts and adequate payment, when they are already at a disadvantage in such negotiations. Both insurers and employers have acknowledged that unacceptably high charges from out-of-network physicians are extremely rare. Yet, this bill punishes all out-of-network physicians by requiring them to be paid as if they participate in all of the numerous plans offered in the state.
Some specialist physicians are out-of-network because insurers fail to provide fair payment and contracts. The good news is this issue is starting to subside since insurers are now beginning to pay specialists more fairly to encourage them to participate in networks. For instance, Horizon has recently announced that 99 percent of the hospital-based specialists who were formerly out-of-network have now joined networks.
The solution to this problem is simple and proven to work — pay physicians fairly and provide fair contract terms, and they will join networks. In addition, as more physicians become employed by hospitals, the out-of-network issue will continue to dissipate. It is encouraging to see both sides working together to address the problem.
This bill creates a baseball arbitration model for claim payment disputes between physicians and insurers. This is an insult. We are talking about complex, lifesaving medical procedures — not baseball. Further, mediation models already exist. For plans regulated by the state, the New Jersey Program for Independent Claims Payment Arbitration provides a venue for dispute resolution. For self-funded plans regulated by the federal government, MSNJ's Claims Assistance Program is an effective way for payers to settle claim disputes with physicians.
In no other industry does the service provider rely on a third party for payment, and then have to fight to receive it. Physicians are at the mercy of insurance companies to raise revenue so they can run their practices when their sole focus should be on providing patient care. To improve quality patient care and reduce costs, insurers must reduce administrative burdens and provide fair payments and contracts to physicians who dedicate their lives to serving the needs of their patients.
President and general manager for New Jersey, Cigna
We agree in principle that out-of-network charges need to be reined in and regulated. The current system is broken and in many cases forces individuals, employers, unions, taxpayers and insurers to pay outrageous amounts of money for these charges. We need to study the proposed bill to determine if it’s exactly the right approach, but clearly legislation is needed to protect everyone who pays for health care in New Jersey.
Spokeswoman for Barnabas Health
Barnabas Health is pleased to see that Sen. (Joseph) Vitale and Assemblyman (Craig) Coughlin have introduced a thoughtful approach to resolve the issue of excessive out-of-network charges by certain health care providers, which negatively impact consumers through unexpected out-of-pocket expenses and inflated insurance premiums. Barnabas Health looks forward to delving into the details of the bill so that we may provide constructive feedback during the legislative process.
Gary S. Horan
Chief executive, Trinitas Regional Medical Center
At first glance, the bill has some merits, and I like the idea of consumer protections, but the bureaucracy needed for the price index system will be burdensome, costly and difficult to monitor.
As it is written right now, the rate offerings appear unfair and provide little leverage for the hospitals in negotiating with insurance companies. I would like to see some assurances from the insurance companies that their pricing will not favor the large hospitals and systems at the expense of the safety net hospitals.
Claudine M. Leone
Director of policy and advocacy, N.J. Academy of Family Physicians
Family physicians and other in-network health care professionals undergo a lengthy process to participate in a health plan's network. In-network physicians are contractually obligated to administer multiple levels of paperwork to ensure that patients’ health insurance covers the medically necessary treatment recommended by physicians.
It is concerning that this legislation puts additional responsibilities on in-network physicians — requiring them to educate and counsel patients on the intricacies of their individual health plan benefits, co-pays, deductibles and other coinsurance obligations. Physicians are here to provide guidance on medical and health care treatment decisions. Consumer benefits communications should fall squarely on the health plan and employers offering the benefits as family physicians and patients alike strive to spend more personal one-on-one time on actual health care.
Health care attorney, Brach Eichler
The proposed legislation goes beyond the so-called issue of "surprise bills" in the hospital setting. If enacted, the bill will touch every patient/health care provider relationship, whether it is with your family doctor or a statewide health system.
The bill would create complicated disclosure and consent requirements, increase compliance burdens on an already overburdened industry and subject health care providers to financial penalties and potential administrative sanctions. The law also calls for a private vendor contracted by the government to create and maintain "data sets" on all New Jersey residents containing all of their health care claim information.
It is our impression that there is an emerging consensus for reform with respect to the so-called "surprise bill" issue; however, the proposed omnibus approach seems like using a sledgehammer where a scalpel would do.
Robert A. Marino
Chief executive, Horizon Blue Cross Blue Shield of New Jersey
Almost all New Jersey health care participants agree that our state's out-of-network laws, while well-intentioned when created, now need to be reformed to protect consumers and employers as we all strive to provide quality care at a reasonable cost. We are encouraged that a bill will be introduced to begin the discussion on managing health care costs, and we look forward to playing an active role in the discussions.
Chief executive, New Jersey Hospital Association
This is an issue of great frustration to health care consumers, and we understand that frustration. It’s a very complex issue, and we agree with the bill’s sponsors that addressing it requires a shared responsibility from hospitals, physicians, insurers and regulators. We all need to make sure the process is understandable and that patients get the information they need.
This bill covers a lot of ground, and we haven’t had time to fully review it and determine its impact on hospitals and their patients. We’re committed to working with policymakers and meeting with the sponsors in stakeholder meetings to achieve a balanced solution to protect patients from unexpected out-of-network medical bills. Two important issues that must be part of the conversation are making sure patients have access to the providers they want and ensuring fair negotiations between providers and insurance companies.
President, New Jersey Association of Health Plans
New Jersey’s current out-of-network regulations have provided an opportunity for a minority of facilities and providers to engage in predatory pricing, have led to surprise billings to consumers, and have added to unnecessary costs for consumers and employers. New Jersey has become a hotbed for out-of-network billing problems. The status quo is neither fair nor sustainable for health care consumers in New Jersey.
NJAHP applauds these legislators for their thoughtful effort to try to protect consumers from price gouging. We are still reviewing the bill and have identified some initial concerns. We look forward to working with the sponsors, other decision-makers and other stakeholders to ensure the legislative solutions are practical and ready to implement as soon as possible.
The bill comes after a wave of consumer complaints and reports about these problems in New Jersey, including the following:
President, Employers Association of New Jersey
This bill represents the most transformative health reform for New Jersey in decades. It is a profound change in how patients with health insurance will get treated and how much they can be charged. It will spark a sharp debate over state government’s role in regulating fees and prices.
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