There are some new rules in healthcare coming, and for once, that is good news for business. The recently enacted out-of-network healthcare reform law addresses the problem of surprise bills for medical services that are beyond the ability of many consumers to pay and have contributed to the rising cost of health insurance.
It is a problem that had been vexing New Jersey for years, and now, thanks to some tenacious work by committed legislators, we have a solution.
The “Out-of-Network Consumer Protection, Transparency, Cost Containment and Accountability Act,” which Gov. Phil Murphy signed into law June 1, will make hospital costs and billing more transparent, protect consumers who get hit with medical bills in the tens of thousands of dollars, and provide an arbitration process to work out disputed charges between healthcare providers and insurance companies.
The problem is a serious one. A Kaiser Family Foundation survey finds that among insured non-elderly adults struggling with medical bill problems, charges from out-of-network providers were a contributing factor about one-third of the time.
The practice is also unfair to consumers. Nearly seven in 10 individuals with unaffordable out-of-network medical bills did not know the healthcare provider was outside their plan’s network at the time they received care.
Surprise medical bills come from two sources. One is emergency room care; in a medical emergency there’s no time to find out whether an ER doctor accepts the same health plan as the hospital, or whether the hospital is part of your health plan’s network.
The other is scheduled procedures where, even if the patient has verified that the providers are in network, they can still get hit with a bill from radiologists, pathologists and others whom the patient may never even meet. These doctors may have a contract with the hospital, but that does not mean they accept the same insurance as the hospital.
Finding a solution has been difficult. While no one likes surprise medical bills, businesses have a vested interest in maintaining the integrity of healthcare networks. A blanket ban on balance billing would have disrupted the healthcare system and likely led to steep increases in costs.
The law’s sponsors, Senator Joseph Vitale and Assembly Speaker Craig Coughlin, did a masterful job of balancing the two interests.
The new law ensures consumers receive advance notice if a provider is out-of-network. This includes disclosures by providers and facilities about network status, potential financial responsibility, description of the services and an estimate of the cost.
Hospitals and doctors who care for someone during a health emergency would not be permitted to bill the patient more than his or her deductible, co-payment or coinsurance amount – regardless of whether the providers are part of the patient’s insurer’s network. Instead, out-of-network providers would have to negotiate a settlement with the patient’s insurance company or, if necessary, submit to binding arbitration.
NJBIA has long understood that the cost of healthcare is the biggest concern of its member companies. There could be no hope of bringing healthcare costs under control unless the problem of out-of-network billing and its cost to consumers and their employers is addressed. No, the law will not make healthcare suddenly affordable for small business owners, but it does bring us one step closer to a solution.
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