Good sign over your hospital bed:
"Do NOT come near me if you are NOT on my insurance plan. I forbid it."

Sticker shock at hospital bill? This reform might help | Moran

Updated on June 20, 2017 at 5:23 PM Posted on June 20, 2017 at 5:22 PM

BY TOM MORAN tmoran@starledger.com,
Columnist, The Star-Ledger

Let's be nice, and start by saying that most doctors and hospitals in New Jersey do not enrich themselves by gouging their patients.

But some of them do, and it is an outrage that is driving up health costs in New Jersey by an estimated $1 billion a year. Take no comfort if you are not among those patients getting shocking bills from unscrupulous providers. We all wind up paying for the excess charges, though higher premiums and taxes. In New Jersey, at least, there is no escape.

Now, after years of effort, the Legislature is on the verge of making a fix before the July 1 budget deadline. In the final rush of business in Trenton, this is among the most important items, up there with changes to the school funding formula.

The excess medical bills come from doctors and hospitals that are not in their patient's network of providers. Many of the patients are facing medical emergencies, like a car crash, and have no choice but to seek the nearest treatment. Others pick the right hospital, but are surprised to learn later than the doctors who treated them, often specialists like anesthesiologists, were not in their network.

For slippery doctors and hospitals, operating outside the insurance networks is an invitation to price-gouge, since New Jersey law places no cap on their charges. One hospital charged a pneumonia patient $128,000 for a five-day stay; one charged $49,000 for an overnight in the ER after a broken bone; another charged $59,000 for a two-day stay after kidney stones.

More typical are smaller charges, often from doctors. A pregnant woman who had no idea the anesthesiologist at her regular hospital was not in her insurance network gets zapped for an added few thousand; a quick consult on a broken bone from an ER doctor outside the hospital's network costs a few thousand more.

Those charges add up. And some hospitals, notably the for-profit CarePoint chain in Hudson County, are shamelessly using this method of overbilling as a business model. They often make no deals with any insurer, so all their care is out of network.

"It's not just unfair," says Sen. Joe Vitale, chairman of the health committee. "It's immoral."

This must change. Individual patients are in theory protected from these huge bills, but since insurers must pay them, the costs are spread to all of us in the form of higher premiums. And because state and local governments are among the largest purchasers of insurance, these charges drive up taxes as well.

Gov. Chris Christie has done nothing to fix this, despite pleas from the insurers and patient groups. And reforms proposed in the Legislature have failed, year after year, over objections from doctors and hospitals.

Health care providers say the root problem is that payments from insurers are too low. They note that insurers often provide generous reimbursements to large hospitals, and networks of doctors, but shortchange the smaller operators who lack the same bargaining power.

Now Vitale, along with Assemblyman Craig Coughlin, who is on track to become the next Speaker, has hashed out a system of arbitration that is fair to all sides.

Under their reform, each side would make an offer to the arbitrator, who would be restricted to choose one or the other. That's the style of arbitration used in major league baseball, and the hope is that both sides will have incentive to make a reasonable offer by aiming for a midpoint that might appeal to the arbitrator.

Doctors prefer a different style of arbitration, and some legislators are pressing only for transparency over these charges, in hopes that informed consumers will demand better treatment. That's just not enough.

The reform offered by Vitale and Coughlin follows years of negotiations, and offers the best hope to contain these costs, this year. It's time for the Legislature to stop dawdling and embrace it. It would, without doubt, be a huge improvement over the Wild West system in place today.


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