Our view: NJ should finally give patients relief from out-of-network surprises

Press of Atlantic City | March 23, 2018

Everyone knows or should know to make sure their medical caregivers are in a network that accepts their insurance coverage. That means the providers have agreed to accept the insurer’s reimbursements for services and the consumers will pay only their expected co-pays and other out-of-pocket costs.

Choose an out-of-network provider and be prepared to pay the balance of whatever they charge beyond what the insurance allows.

Patient advocates estimate that in New Jersey, about 168,000 people a year receive $420 million in unexpected bills for out-of-network care, an average of $2,500 each. 

But during emergency care or in the midst of a medical procedure, patients can receive out-of-network care they didn’t choose. New Jersey law prohibits charging patients extra for out-of-network treatment following an emergency, so in those cases insurers pay — frequently after a dispute with providers over the amount. That, too, ends up costing consumers in the form of higher rates for insurance.

Horizon Blue Cross Blue Shield estimates that out-of-network bills cost New Jersey residents $1 billion a year. Since the state pays $3.4 billion a year for medical care for current and former public workers, substantial out-of-network costs for them are passed along to taxpayers, about $800 million a year.

Legislators have been trying for nearly a decade to reduce these surprise bills and high costs to everyone for out-of-network care, but couldn’t come up with a reform acceptable to doctors, hospital and insurers. A new effort this year looks like it might succeed. We hope so.

A bill reintroduced this year by fellow Middlesex Democrats Assembly Speaker Craig Coughlin and Sen. Joseph Vitale would give patients better information on provider network status and costs, and set up a system for resolving disputes between out-of-network providers and insurers. The former has broad support, but the latter is hotly disputed since it would determine who has to pay how much.

The bill would give the parties just 30 days to come to an agreement on reimbursement for inadvertent out-of-network care. At that point an arbitrator would review the case, at the shared expense of insurer and provider, and recommend a payment reportedly ranging from 90 percent to 200 percent of the Medicare reimbursement rate for the care.

Some doctors don’t like this because they’re used to getting more than double the Medicare rate. Some insurers don’t like it because many of their in-network agreements reimburse for less than that amount.

That suggests to us that this approach might be about right — displeasing each side a little.

In his budget address last week, Gov. Phil Murphy said Coughlin and Vitale are “at the forefront of the effort … to close the out-of-network loophole, and I commit to getting this done.”

His budget proposal suggests the reform could help the state save $119 million next year on the cost of insurance for its workers.

Achieving this long-sought goal would be a significant accomplishment for the new administration. And the relief for patients would be both immediate and long-term.