PoliticoNJ: Assembly panel approves 'out-of-network' bill, Senate version pulled

By Katie Jennings

Read this article as it originally appeared on March 6, 2018 in Politico Pro (You must have a Politico Pro account)

TRENTON — A long-debated measure to protect consumers from surprise out-of-network bills advanced along party lines from an Assembly committee on Monday, but was pulled from a hearing in the Senate, where some Democrats remained divided on the heavily lobbied issue.

Assembly Speaker Craig Coughlin (D-Middlesex), prime sponsor of the bill, NJ A 2039 (18R), would not say when he plans to post it for a vote in the lower house.

"I'm delighted this got out of committee. It's a terrific, tremendous consumer protection bill," Coughlin said. "We'll take a look at the calendar, take a look at the agenda and figure out when it's the right time to get it up."

The measure imposes new disclosure requirements for health care facilities and doctors about their insurance network participation and the estimated costs of services. It also imposes new requirements on health insurers about what information they must give to members about their benefits.

politico1200x800.jpgBut the legislation has stalled many times during the past 10 years over the arbitration provision, which determines how hospitals, doctors and insurance companies resolve out-of-network billing disputes.

Hospitals and doctors argue the provision, even though it would only apply to emergency and inadvertent situations, would negatively affect their ability to negotiate rates with insurance companies for in-network situations.

In past years, lawmakers have tried to link advancement of the bill to the annual budget negotiations, saying it could save the state health plans tens of millions of dollars.

Democratic Gov. Phil Murphy made similar claims on the campaign trail, but he has yet to weigh in on the legislation since taking office.

His office did not respond to a request for comment on Monday.

The Christie administration never provided a savings estimate.

Coughlin said he "would hope" to post the bill before the June 30 budget deadline.

The key sticking point has been which metrics the arbitration process should consider.

As the bill is currently written, the arbitrator would consider a range of factors, including the usual charge for comparable services, the complexity of the case, and the average in-network insurance rate, among others.

The arbitrator would pick one of the two final offers, and it would be considered binding.

But many doctors want the amount to be based on the charge-based system known as FAIR Health, which collects data on the amount doctors and hospitals bill for services rather than the negotiated rates that are paid out by insurance companies, which tend to be significantly lower.

"Why has Trenton been unable to resolve this important issue in the past 10 years? After all, our neighbors in New York and Connecticut have already done so?" asked Rajnik Raab, a neurosurgeon who practices at the North Jersey Spine Group. "I think it's time to blame your leadership and the sponsors of this bill. Their stubborn insistence on insurance-driven arbitration is leading all of us down the rabbit hole."

The bill advanced from the Assembly Financial Institutions and Insurance Committee by a vote of 9-3, with one abstention. The nine Democrats on the committee voted in favor. Assembly Republican Leader Jon Bramnick, who subbed into the committee, opposed the bill, along with fellow Republicans Bob Auth and Jay Webber. Assemblywoman BettyLou DeCroce abstained.

"We're working through some issues, but we'll get it out of the Senate," Coughlin said.

State Sen. Nellie Pou (D-Passaic), who chairs the Senate Commerce Committee, said she pulled the bill, NJ S 485 (18R), from a scheduled hearing on Monday at the request of the sponsor, state Sen. Joe Vitale (D-Middlesex).

Vitale said he did not have the votes needed to advance the bill. He would not elaborate.

The bill has had troublemaking it through the committee in the past due to division among Democrats who are concerned about the hospitals in their districts.

State Sen. Joe Cryan (D-Union), who sits on the Commerce Committee, declined to comment. However, his predecessor, former state Sen. Ray Lesniak (D-Union), didn't support the measure because of concerns from his local hospital, Trinitas Regional Medical Center in Elizabeth.

The other Democrat on the committee, Sen. Nicholas Scutari (D-Union), did not respond to a request for comment.

Vitale said Pou was "supportive" and would not comment on Cryan and Scutari.

"We're still working through the details with some of the members," he said.

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