Bill discouraging out-of-network doctor fees goes to full Assembly vote

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A bill that would bar consumers from getting hit with surprise, out-of-network bills when they undergo a procedure at a hospital advanced to the floor of the state Assembly today for a full vote sometime in coming weeks.The bill, A-2039, requires hospitals to disclose to patients which out-of-network providers will be charging them before the patient undergoes treatment or surgery. The bill also allows for a state-regulated, binding arbitration process between patients and out-of-network providers to settle costs for an out-of-network bill.

The state Assembly’s Financial Institutions and Insurance Committee voted along party lines to move the bill to the floor for a full vote on the Democrats-backed legislation. Its companion bill in the state Senate, S.485, has been delayed in the state Senate’s Commerce Committee.

The issue of out-of-network transparency has long been the center of debate in New Jersey. Last year, the state Assembly tried to push through a similar bill, A-1952, but that bill never made it past the state Senate for a full vote.

Fee transparency and the right to arbitrate surprise bills from out-of-network doctors have long been advocated by Horizon Blue Cross and Blue Shield of New Jersey and the New Jersey Business & Industry Association.

In a written statement today, NJBIA Vice President Mary Beaumont said: “This bill strikes a fair balance between providing reasonable compensation to facility-based providers while protecting consumers from unexpected, nonnegotiable bills that drive health insurance premiums higher.”

Beaumont testified in favor of the bill before the Committee.

“This legislation is necessary not only for employers, employees and all consumers but also for the state of New Jersey to realize savings in the public employee health benefits plans,” Beaumont said.

Groups such as the New Jersey Society of Anesthesiologists have long said that such a bill, if passed, would allow doctor fees to be dictated by insurance companies and the state, and would drive specialists out of New Jersey.

John Fanburg, a partner and chair of the health care practice at law firm Brach Eichler, said in an interview that creating such an arbitration practice could ultimately drive up health care costs for everyone.

“If a baseball-style arbitration process is introduced to decide what the payer should be paying, that puts the provider in a difficult position and, over time, lead a de facto fee schedule for out-of-network providers,” Fanburg said. “The market has already evolved to the point where the out-of-network benefits are capped for many insurance policies. Many payers have already gone to a percentage of Medicare to pay for the out-of-network charges.”