NJDPA urges Gov. Christie to restore medical benefits for small employer health plans

The New Jersey Doctor-Patient Alliance is urging Gov. Christie to restore the medical benefits eliminated when the Small Employer Health (SEH) Benefits Program Board voted to repeal regulations that protected patients’ rights to choose their doctor.

The SEH, which operates under the Department of Banking and Insurance, voted on Sept. 21, 2016 to repeal NJAC 11:20-24.5 and NJAC 11:21-7.13. The decision, which took effect on Jan 1, has allowed insurance carriers to limit out-of-network (OON) medical reimbursements to only 110 percent of the Medicare rate.

“Unfortunately, in the New Jersey Small Employer Health insurance market, choice to purchase a plan with meaningful out-of-network benefits no longer exists, and therefore many New Jersey citizens have lost their access to quality medical care,” said Dr. Peter DeNoble, the president of the New Jersey Doctor-Patient Alliance, a non-profit organization dedicated to bringing transparency to the insurance marketplace, preventing surprise medical bills, and halting the exodus of medical expertise from New Jersey.

What makes matters worse is that subscribers who receive their health benefits from a New Jersey small business were not adequately notified about the slashing of their benefits on Jan. 1.

Most subscribers are currently unaware of their new policy limitations,” DeNoble said. “We believe this is a ticking time-bomb of surprise bills waiting to happen to an unwitting group of New Jersey’s small business owners and employees.”

DeNoble said the Medicare fee schedule is not a sustainable reimbursement rate for the “non-Medicare” patient.

“In general, small medical practices accept Medicare patients as a part of a more diverse payer mix, including private insurance carriers,” DeNoble said. “When we see and treat Medicare patients, we are usually providing this care at a substantial discount, and in many cases an overall loss to our bottom line.”

DeNoble said doctors readily accept Medicare discounts as a social contract to provide care for our elderly and disabled. 

“Allowing private insurers to bottom out their reimbursements to Medicare rates may prompt more providers to withdraw from Medicare participation or leave medical practice in New Jersey altogether,” DeNoble said.

Plans regulated by the SEH also have a high co-insurance plan, meaning the insurance company will only be responsible for paying 60 percent of that 110 percent of Medicare rate, and that is only if the bill ever exceeds a $5,000 deductible. 

“This ‘OON benefit’ is now meaningless, and the floodgates have now opened onto hundreds of thousands of unsuspecting New Jersey small business owners and employees who will likely end up receiving large surprise medical balance bills,” DeNoble said. “This is the very thing we have been working so hard to eliminate in this State.”

DeNoble said when the issue of the OON allowed rate was discussed at the Sept 21 SEH Board meeting, it was readily anticipated that after such a rule change, premiums for these plans would decrease. 

“A decrease in premiums has always been the major selling point for limiting OON benefits,” DeNoble said. “Not only has this not been the case, but premiums for these same stripped-down policies have instead risen by around 10 percent across the board in 2017.”

The NJDPA is in favor of using FAIR Health as a benchmark for the OON allowed rate, as it is widely accepted and utilized for this very purpose in many other states around the country.

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