In New Jersey, health insurers create networks with hospitals and providers that agree to accept set prices. The aim is to offer their members reasonably priced health care.
Members who seek care inside these networks generally pay less out of their own pockets.
But what about members who find themselves in an emergency and the closest hospital is out of their network? To protect these patients, New Jersey requires insurers to pay the bills when their members require emergency care — even if members get that care outside the network.
Yet a small number of hospitals and providers quickly learned to game the system. They realized they could remain out of insurance networks and, during an emergency, charge whatever they want. After all, New Jersey law says insurers have to pay up.
The result has been some exorbitant bills, such as $9,000 for an emergency room visit for a cut finger. Or a $12,500 charge for a pulmonary stress test that typically costs $90.
Patients get hit with huge co-insurance bills and insurers overpay for care, a practice that drives up premiums for all of us. And patients with certain types of insurance plans not regulated by New Jersey can get stuck with the entire bill.
The out-of-network complexities extend beyond emergency care. Patients may have surgery at an in-network hospital with an in-network surgeon and then find the anesthesiologist or the pathologist, for instance, is out of their network. The consumer is hit with hidden charges from providers they did not even know were part of their care.
The result of all this? Higher insurance premiums. Higher property taxes due to higher health care costs for municipal workers. Hidden charges for consumers. And frustration all around.
At the New Jersey Health Care Quality Institute, we've been working to bring together legislators, providers, hospital executives, insurers and consumer groups to find solutions to the out-of-network conundrum. We support solutions that provide transparency.
Let's say a woman is having a baby. She should be able to know who is involved in her delivery and baby care, and who is in and out of network — and what the charges will be. That only seems fair.
We support strong protections for consumers in emergency situations, as well as protections for those who do everything to stay in network and nonetheless get hit by hidden charges they did not expect. And we support an arbitration process to fairly resolve disputes between providers and payers when the two parties cannot come to an agreement.
We also think insurers must be part of the solution. They must create networks that can realistically and reliably provide the care patients need. And they must use quality indicators when selecting the providers who are part of their networks. Otherwise, patients will be forced out of network to obtain quality care. And it should be easy to find out which providers are in network. Online Provider Directories must be up-to-date and accurate.
The Out-of-Network Consumer Protection, Transparency, Cost Containment and Accountability Act addresses many of our concerns and is a good step forward. The bill is quite specific and only protects consumers who end up being cared for by out-of-network providers inadvertently or in an emergency. A consumer, for instance, could still choose an out-of-network provider for surgery, but the bill would not affect the price the out-of-network surgeon charges.
The sponsors of the bill — Assemblymen Craig Coughlin (D-Middlesex), Gary Schaer (D-Passaic) and Troy Singleton (D-Burlington), along with Sen. Joseph F. Vitale (D-Middlesex) — have tried for six years now to fix this problem. Recently they held hearings and stakeholder sessions. Some providers have registered objections to the bill, saying their ability to go out of network gives them some leverage when they negotiate prices with insurers.
At the Quality Institute, we want those with objections to bring concrete suggestions forward and sit down with legislators to find a solution. We cannot continue to delay fixing a problem that harms people in New Jersey every day. It's time to protect our residents from surprise, excessive hospital bills.
This is a wound we must work together to heal. We cannot push the issue aside for another year, let alone another decade. Legislative hearings on out-of-network issues go back to the Corzine administration. Hearings were held again in 2010. And nothing has changed.
Our town governments and businesses, our hospitals and doctors, our consumers and patients all have a stake in creating real solutions. We all want health insurance that provides reasonable fees to providers and clear and understandable coverage for patients.