Read this article as it originally appeared on northjersey.com
One of the most contentious healthcare issues being debated in the Legislature today is “out-of-network” reform. Far too many New Jerseyans have had to deal with surprise — even shocking — medical bills after a surgery or procedure because they were unaware of their insurers’ in-network and out-of-network benefits.
Anyone who has tried to read their insurance policy and decipher exactly what is and isn’t being covered — as well as what is paid to providers – knows that basic transparency is sorely lacking in our healthcare system. Add in the confusion of ever-changing narrow networks and the controversial OMNIA plan, which significantly limits a consumer’s choice of providers, and it becomes even more difficult.
Despite paying expensive monthly premiums, consumers are often left in the dark trying to figure out which their plan covers doctors and facilities, what services their insurer will pay for, and whether they will be left holding the bag.
How can consumers shop for affordable, quality healthcare if the price tag is essentially kept hidden in a black box? New Jersey’s lawmakers are right to call for more transparency in our healthcare system. However, only one of the currently proposed out-of-network reform bills will mandate true transparency, lower costs, and effectively put an end to expensive surprise medical bills.
Senate Budget Chairman Paul Sarlo, D-Wood Ridge, has sponsored legislation with Sen. Gerald Cardinale, R-Cresskill, to shine a light on important information that has been historically kept hidden from New Jersey consumers. S-791 would require health plans to disclose their mysterious out-of-network payment methodology and provide out-of-network price estimates to their members.
The bipartisan bill would also require doctors and hospitals to disclose their insurance affiliations to patients, so consumers can determine their coverage before they receive treatment. Most importantly, S-791 includes important protections to hold consumers harmless from surprise bills at in-network hospitals.
Unfortunately, it seems that lawmakers are headed towards approving another proposal, S-485. This legislation shifts the focus away from greater consumer transparency and gives large insurance companies more power to pick and choose which providers are in or out of network without any oversight, accountability or transparency as to the reasons why.
While well-intentioned, this bill sponsored by Sen. Joe Vitale, D-Woodbridge, and Assembly Speaker Craig Coughlin, D-Woodbridge, would force doctors and hospitals to enter a costly and lengthy arbitration process to resolve any disagreements with insurers over out-of-network rates. And without a current, transparent, independent pricing database (which Sarlo and Cardinale’s bill requires), it will be impossible to determine a fair arbitration rate.
Essentially, this bill strips a provider’s ability to negotiate fair market rates and gives large insurance monopolies even greater leverage in the healthcare marketplace. The result? Consumers could lose access to highly sought-after specialists, such as neurologists, who may move their practices to other states, including New York, which has a more favorable out-of-network law. And consumers will have even less choice in which doctors and hospitals they can visit in their networks, as insurers may force more providers out-of-network.
Health insurance policies are extremely expensive, with many New Jersey consumers being hit with double-digit price hikes by the state’s largest insurer in the past year. If we want to lower the cost of healthcare in New Jersey effectively, we need transparency on both sides of the equation, as provided by the Sarlo/ Cardinale legislation. Consumers deserve to know how they’re spending their healthcare dollars, and that means providing pricing transparency in a publicly accessible format.
The unintended consequences of forcing more physicians and hospitals out-of-network – and possibly out-of-state — will only exacerbate the problems in our healthcare market and limit consumer choice. Instead of giving more power to large insurance monopolies, New Jersey legislators should support Senate bill, S-791. Only through increased transparency can we enable consumers to make informed healthcare decisions and prevent surprise medical bills.
Stavros Christoudias, MD, FACS, is a general surgeon and medical director for the Institute for Wound Healing at Holy Name Medical Center.