Protection from unfair out-of-network medical bills

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by Dave Mollen/State President/AARP New Jersey

The PBS Newshour tells about a man who was hit with an unexpected $4,500 bill for an emergency room visit. To pay for this surprise out-of-network bill, he had to use money his family had saved to send his daughter to college and sell some property. In another instance, he required heart by-pass surgery and received another unexpected bill for $2,200. He said it was “like being hit by a truck.”

Unfortunately, this man is not alone. According to NJ-based think tank Policy Perspective (NJPP), an estimated 168,000 New Jerseyans receive these unfair bills each year.

Often, when a New Jersey resident is treated at a hospital or other health care facility, he or she is surprised afterward to learn that while the health care facility is in the patient’s insurance company’s network, one or more of the health care professionals who provided care is not in the network. Then, the out-of-network health care provider can levy charges that can amount to five, thirteen or even 27 times the Medicare rate!

On average, each of these patients get billed about $2,400, an unconscionable burden on any family and particularly difficult for those already struggling to keep up with New Jersey’s high cost of living. And the last thing patients struggling to recover need is to be ambushed with a surprise medical bill and thrown into the middle of a dispute between doctors and insurance companies. NJPP says that most of the patients (71%) who receive these bills didn’t know they were coming.

NJPP reports that under current New Jersey law, about 1.4 million New Jersey residents (those covered by NJ Family Care) are protected from having to pay these bills, but even in those instances, insurers must pay them and they end up passing along the costs in the form of higher premiums to all policyholders. In fact, up to about 5 million New Jersey residents and companies pay about $1 billion a year in extra premiums due to these unfair bills! New Jersey’s individual health insurance premiums are the highest of any state and our employer-based premiums are the second highest in the country and unfair out-of-network bills are one key reason!

NJPP tells us that some hospitals game the system by limiting or altogether excluding their participation in health insurance plans, thus enabling them to impose unreasonable and damaging bills on patients and their families. Some of these institutions say that they must do this in order to make up for payments they receive from insurance plans, including Medicare, which they contend provide inadequate reimbursements. However, 82% of New Jersey hospitals accept all applicable insurance plans, so refusing to accept some of them must not be necessary to successfully operate hospitals from a financial point of view!

AARP supports Assembly bill A1952, which holds consumers harmless when they receive emergency care or have a scheduled procedure at an in-network facility, only to find out after the fact that one or more of the health professionals were out-of-network.

This problem affects our whole nation and we in New Jersey need to address it. The Newshour report tells us that four states (Illinois, Florida, New York and Connecticut) have already passed such legislation and New Jersey is one of 28 states currently considering doing so.

Opposition from physician groups and hospitals, as we might expect, is fierce.  AARP strongly urges Speaker Vincent Prieto and Senate President Stephen Sweeney to move this bill forward now.  Surprise medical bills are an expensive and unfair burden for patients and their families who expect their health plans to provide the coverage they have paid for.


Contact Dave Mollen of AARP New Jersey at gro.p1502926669raa@n1502926669ellom1502926669d1502926669.

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