Coalition blasts out-of-network health care cost study 'Caps protect insurers, not patients'

Beth Fitzgerald//March 31, 2015//

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As Trenton works on a bill regulating the high medical bills that can result when patients get care outside their insurance company network, a coalition of health care providers came out Tuesday in opposition to putting caps on out-of-network medical payments.The NJ Access to Care Coalition, a group of physicians, hospitals and other health care providers, criticized a study of the impact of out-of-network medical charges that was commissioned by the state’s largest health insurer, Horizon Blue Cross Blue Shield of New Jersey.

The study, conducted by Avalere Health, concluded that New Jerseyans could see lower monthly premiums if the state’s current out-of-network regulations were changed. Current state law requires that, when consumers receive emergency care from out-of-network hospitals and doctors, they can’t be charged more than they would pay if they were in-network.

“New Jersey state law protects patients who, by no choice of their own, are seen by an out-of-network provider in an emergency situation,” said Betsy Ryan, chief executive of the New Jersey Hospital Association. “Imposing rate setting measures on health care providers does nothing to improve access to care for patients; caps protect insurers, not patients. Instead of capping payments to providers, the health insurance industry should be focused on bringing more providers into their networks and providing better access to care for their members. Rate setting is a vestige of the past.”

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A group of legislators led by Assemblyman Craig Coughlin (D-Woodbridge) and Sen. Joseph Vitale (D-Woodbridge) has been meeting for weeks with health care stakeholders, and has said they expect to introduce a bill addressing out-of-network medical bills within the next few weeks.

Horizon spokesman Tom Vincz said: “Horizon and the vast majority of physicians have a common goal to ensure New Jersey residents receive the best possible health care at a reasonable cost. When an out-of-network doctor can charge excessive amounts such as $12,500 for a stress test, $10,000 for a consultation of less than an hour or $650 to draw blood, it is not hard to understand why New Jersey consumers are paying such high health insurance premiums. Horizon members alone pay more than $1 billion a year in out-of-network costs.”

Vincz added: “The out-of-network cost issue is a consumer protection issue. New Jersey residents will continue to pay higher health care costs unless common sense changes are made.”

The coalition contended that some health care providers have been “squeezed out” of insurance networks because they were unable to agree on in-network reimbursement rates.

“Physicians’ and hospitals’ only recourse to negotiate adequate payment rates is to have the ability to walk away from the table and go out of network with the insurer,” the coalition said in a statement.

Neil Eicher, vice president of government relations for the New Jersey Hospital Association, said the coalition is opposed to out-of-network rate caps but is working with legislators to arrive at a compromise.

“We want to be part of the solution, which should be a shared response by providers and insurers,” he said. He said that, in general, “We think if you make the in-network situation better for (health care) providers it gets rid of the out- of-network problem.”

He said providers are seeking “better reimbursements and a better in-network experience.”

Lawrence Downs, chief executive of the Medical Society of New Jersey, said the inability to come to terms with insurers forces a number of doctors to remain out of network. He contended that Horizon has “the ability to contract with all physicians and hospitals in the state, but they choose not to.”

Dr. Jon Lustgarten, a neurosurgeon who testified on behalf of the New Jersey Neurosurgical Society before the Assembly Financial Institutions and Insurance Committee last October, said: “It’s certainly our perspective that we have an in-network problem, not an out-of-network problem. If financial pressures become too great, neurosurgeons will choose not to practice.”

Vincz of Horizon said: “More than 85 percent of physicians, and a majority of acute care hospitals, are in the Horizon networks — the state’s largest networks. So this is not an issue of access. This is an issue of excessive charges by those doctors who choose to go out-of-network to increase their profits.”

The NJ Access to Care Coalition members include: