New Jersey's 39th Legislative District

Senator Gerald Cardinale

Senator Gerald Cardinale

Cardinale: Hospital-Costs Measure Was Too Complex

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The following editorial by Senator Gerald Cardinale (R-Bergen, Passaic) on medical billing legislation was published by The Record:

Sen. Gerry Cardinale writes in this editorial that proposed legislation intending to reform medical billing is actually overly complex and rife with negative consequences. (Flickr)

The article on Democratic lawmakers’ efforts to protect patients from unexpected high medical bills (“How plans to reform medical bills stalled,” June 14) did little to shed light on the legislative attempt to deal with the very real problem of surprise and often outrageous out-of-network charges that consumers and insurers alike too often encounter. There is no disagreement that this is an important issue that needs to be addressed.

I and others who oppose S-20 believe the bill is unnecessarily complex and will likely create a new cadre of predatory lawyers to arbitrate questioned provider charges. The legislation does nothing to help the individual uninsured consumer who faces these outrageous charges. Instead, it is geared toward helping insurance companies.

70 percent left out

Consumers whose employers provide coverage through self-insured plans that are covered by federal ERISA regulations will be left out in the cold. That’s 70 percent of New Jerseyans with employee benefits.

We originally got into this problem by legislating that emergency room charges by out-of-network providers must be honored by insurers. While the law intended to protect consumers, the law of unintended consequences took its toll and a whole series of other problems arose.

S-20 now presents additional problems, such as requiring arbitration of questioned charges. This may sound good at first, but the truth is that arbitration is costly. Once such a process is mandated, it will not be long before predatory lawyers, often employed by insurers, will begin to question even fair medical bills.

As we heard in testimony before the Senate Commerce Committee, the cost to arbitrate will just add to medical costs and in many cases will give insurers an incentive to dispute all out-of-network charges.

Bureaucracy

This bill creates a medical fee cataloging bureaucracy. It is a monstrous process both costly and fraught with the opportunity for further unintended consequences.

So if S-20 is flawed, what should we do? We could just pass it anyway. That would satisfy some Trenton lobbyists and perhaps some political pundits. That is, until they or others require sophisticated medical care and find it’s not available in New Jersey. This bill’s cost burdens will cause some hospitals to close and many specialists to leave New Jersey.

It will divert funding for research and cures to cover legal costs.

So if S-20 is counterproductive, what should we do? We could do nothing. Or, as I favor, we could take the unique approach of seeking a common-sense, cost-effective solution.

One must take the time to understand the health care marketplace and how past legislation has warped it. Let’s learn from past mistakes and pursue a reasonable, effective solution that does not threaten consumers with unintended consequences. Such an approach is within reach.

Before S-20 was introduced, I suggested that the existing peer review process serve as the main building block of our solution. This existing, inexpensive, streamlined approach would not promote costly litigation. It would not require lawyers, actuaries or a new bureaucracy to maintain an annual database of every claim that is paid in the state.

In addition, those without insurance will be much better off dealing with a peer review process than cumbersome arbitration.

The flaw with this approach cited by the supporters of S-20 is that peer review is not binding. However, this can be remedied by simple legislation to make it binding.

And while residents whose employers provide self-insured benefits cannot be subject to state legislation due to federal preemption under ERISA, we could amend the bill to give them the opportunity to voluntarily use peer review that we have made binding.

Solving the problem

Such an option would solve our problem at minimal cost and with almost no chance for unintended consequences.

At the committee hearing, the sponsor of S-20 asked if I would help him pass his bill. I said I would if he would let me rewrite it. He chuckled. But if he had taken my suggestions, I believe the bill could have the votes to pass and the problem he seeks to correct would be resolved.

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