Bills Call for Written Disclosure of Services Insurance May Not Cover Prior to Medical Procedures, Establishment of Health Care Cost Database
A two-bill consumer protection package sponsored by Assembly Democrats Craig Coughlin, Gary S. Schaer, Troy Singleton, Pamela Lampitt and Grace Spencer intended to eliminate surprise out-of-network health care charges when an individual receives medically-necessary emergency services or inadvertent out-of-network care was advanced by an Assembly panel on Monday.
“Far too many New Jersey families – even those with quality health benefits plans – find themselves fighting over thousands of dollars in out-of-network charges they never even had the opportunity to review, let alone agree to, prior to receiving medical attention,” said Coughlin (D-Middlesex). “This legislation is about putting patients first and defending the consumer’s right to be able to make an informed decision about how to proceed with his or her health care.”
The first bill, the “Out-of-Network Consumer Protection, Transparency, Cost Containment and Accountability Act,” is designed to: increase transparency in pricing for health care services, enhance consumer protections, create an arbitration system to resolve certain health care billing disputes, contain rising costs and measure success with respect to these goals.
The bill (A-4444: Coughlin, Schaer, Singleton, Lampitt, Spencer) would require a health care facility to, prior to scheduling an appointment with a patient and in layman’s terms:
- Disclose whether the facility is in- or out-of-network;
- Advise the patient to check with the doctor arranging the services to determine whether or not the doctor is in- or out-of-network;
- Advise the patient that, if the facility is in-network, the patient only will be financially responsible for the co-pay, deductible or co-insurance as outlined in his or her health benefits plan;
- Advise the patient that, unless he or she knowingly, voluntarily and specifically selected an out-of-network provider for services, he or she will not incur out-of-pocket costs in excess of what would be charged for an in-network procedure;
- Advise the patient that, for services performed at an out-of-network facility, he or she will be held financially responsible for costs in excess of his or her copay, deductible or coinsurance; and
- Advise that the patient contact his or her insurance carrier for further consultation regarding costs.
In the case of medically-necessary services performed at any health care facility on an emergency or urgent basis, the bill would limit charges by out-of-network providers. The legislation also would prohibit providers from billing a patient more than the lowest copay, deductible or coinsurance amount applicable to in-network services pursuant to his or her health benefits plan.
“If they were given the choice between continuing with medical care that ultimately would lead to substantial out-of-pocket costs and considering other options that carry a lower price tag, the vast majority of reasonable New Jersey residents certainly would choose the latter. The problem, at present, is that they don’t have that choice,” said Schaer (D-Bergen/Passaic). “By implementing reforms to numerous aspects of the health care delivery system in New Jersey, increased transparency in out-of-network services chief among them, this legislation will help make health care more affordable for individual consumers and will make the system more efficient overall.””
Under the bill, a health care facility would be required to make publicly available a list of standard charges for the items and services it provides. A facility also would be required to publish the following on its website: the health benefits plans in which it participates; a statement noting that doctors working in the facility may or may not accept the same insurance as the facility and advising the patient to check with the doctor to determine whether he or she will be covered; and a notice advising the patient to contact his or her insurance carrier for further consultation regarding costs.
In addition, the legislation would require a facility to publish online the names, mailing addresses and telephone numbers of physicians working at the facility and hospital-based physician groups with which it has contracted to provide services, including anesthesiology, pathology and radiology. Likewise, a doctor who employs the assistance of a health care provider scheduled to perform anesthesiology, laboratory, pathology, radiology or assistant surgeon services shall supply the patient with the names, practice names, mailing addresses and phone numbers of the providers.
Should the network status of a facility or health care professional change between the time of a patient scheduling an appointment and the time the procedure takes place, the facility or health care professional would be required to notify the patient promptly.
Health care professionals also would be required to disclose the benefits plans in which they participate and the facilities with which they are affiliated, both prior to non-emergency services and at the time of an appointment. If a health care professional does not participate in a patient’s plan, he or she would be required to notify the patient and, upon request, disclose to the patient the estimated amount the patient would pay for out-of-network services.
The bill outlines a binding arbitration process, which an insurance carrier, health care facility or patient may initiate if an insurance carrier and a health care facility cannot agree on a reimbursement rate for out-of-network emergency services within 30 days of billing. Under the legislation, an arbitrator, to be selected by the Department of Banking and Insurance (DOBI), would decide upon one of the parties’ final offers.
The second bill, the “Health Care Consumer Cost Transparency Act,” would establish a Healthcare Price Index (HPI) to serve as a useful, objective, reliable and comprehensive health information index. Similar to all-payer claims databases available in other states, the HPI would be designed to make health care data available to state entities and not-for-profit researchers in an effort to improve health care quality, reduce costs and increase pricing transparency.
The bill (A-952: Singleton, Coughlin, Schaer, Lampitt, Spencer) would require the commissioner of the Department of Banking and Insurance to select an organization to maintain the HPI.
“The Health Care Consumer Cost Transparency Act will provide comprehensive data about the quality and cost of health care and allow state policymakers to monitor efforts to reduce health care costs and improve both care quality and population health,” said Singleton (D-Burlington). “Price transparency in health care is a critical ingredient toward giving consumers more information to improve their health care and lower costs.”
“The Healthcare Price Index will give health care policymakers access to an expansive set of data that can help identify trends and ultimately make quality, affordable health care more accessible,” said Lampitt (D-Camden/Burlington). “Introducing this level of transparency to the health care industry in New Jersey will enable all parties involved to make well-informed decisions.”
“Creating a one-stop authority for reliable and comprehensive health care information will help lower health care costs and increase pricing transparency,” said Spencer (D-Essex). “This legislation is a step New Jersey can take to make smarter policy decisions and limit the hardships on health care consumers.”
In addition to any already existing penalties, the legislation sets a penalty of up to $500,000 per violation for intentionally or knowingly using data in the HPI for commercial advantage, pecuniary gain, personal gain or malicious harm.
The bills were advanced by the Assembly Financial Institutions and Insurance Committee, of which Coughlin is chair and Lampitt is vice-chair.