New Jersey Gov. Phil Murphy signed a measure into law aimed at curtailing out-of-network health care costs, which advocates say could climb into tens of thousands of dollars.Murphy signed the bill Friday morning at Woodbridge Community Center, flanked by local Middlesex County officials, including Assembly Speaker Craig Coughlin and Sen. Joe Vitale, both Democrats representing the 19th District.
The bill, Assembly 2039, requires hospitals to disclose to patients which out-of-network providers will be charging them before a patient undergoes treatment or surgery.
With the new law in affect, Murphy said, the state will be able to rein in the “big surprise” bills residents find in their mailboxes after a hospital stay.
“Each year nearly 170,000 New Jerseyans receive medical bills they didn’t expect,” Murphy said. “Bills for services performed, unbeknownst to them, for professionals outside the networks.”
“No one likes to be blindsided. But that’s what’s been happening to residents who did not know they were getting out-of-network medical care until they received a bill in the mail,” Coughlin added.
The new law allows for a state-regulated, binding arbitration process between patients and out-of-network providers to settle costs of an out-of-network bill. The state Senate amended the bill to prevent insurance companies from using pricing benchmarks for services rendered by out-of-network doctors.
Proponents of the law, including state health care trade group Better Choices Better Care and the New Jersey Hospital Association, say it will ultimately lower the cost of health care in the state, and pointed out that exorbitant, out-of-network bills have forced some consumers into bankruptcy.
“The out-of-network bill is eight years in the making, and in the end it addresses our two key priorities: protecting patients from surprise medical bills and ensuring that hospitals and physicians are on a level playing field with insurance companies when it comes to negotiating fair payments for the care they deliver,” said Cathy Bennett, NJHA’s president, in a statement.
“Better Choices, Better Care NJ applauds Gov. Murphy for his action; as the governor stated, moving New Jersey towards greater utilization of value-based care can make us a national leader in health care,” said a spokesperson for the group in statement.
By contrast, physician groups such as the Medical Society of New Jersey and the New Jersey Doctor-Patient Alliance contend the law gives too much pricing power to health insurance companies and could ultimately drive doctors out of the state.
“Lots of physicians want to join insurance networks but can’t because of they’re not offered adequate reimbursement rates,” said John Fanburg, chair of the health care practice at law firm Brach Eichler. “[So] forcing them to is not good for health care in the state.”
He also warned that the bill could prompt independent physicians to retire.