Health Affairs: NJ out-of-network rate cap would impact very few hospitals

A state law capping the rate New Jersey hospitals and physicians can charge for involuntary out-of-network care would not threaten most providers' financial viability, Health Affairs argues in its December issue.

The study concerns a proposed New Jersey bill that aimed to mitigate financially devastating medical bills caused by involuntary out-of-network care by limiting providers' billing rate to between 90 and 250 percent of the corresponding Medicare rate.

The bill was tabled Monday after stirring heated debate among healthcare industry stakeholders this past legislative session.

To understand how the legislation could financially impact providers, Health Affairs' researchers used Health Care Cost Institute's database of 2014 claims information from Aetna, Humana and UnitedHealthcare to examine the distribution of out-of-network inpatient claims in New Jersey, California and Florida.

Here are three report findings.

1. In New Jersey, 33 out of 60 hospitals had no out-of-network inpatient facility claims in 2014. This suggests regulating out-of-network inpatient rates would not financially affect a majority of state hospitals. Overall, about 38.2 percent of total admissions occurred at hospitals with no out-of-network in patient facility claims.

2. In California, 118 out 144 hospitals had no out-of-network inpatient facility claims. About 86.6 percent of total admissions occurred at hospitals that did not have any out-of-network inpatient facility claims.  

3. In Florida, 102 out of 138 hospitals did not have out-of-network inpatient facility claims. About 47.8 percent of total admissions occurred at hospitals that did not have any out-of-network inpatient facility claims.

The findings contest a report published Nov. 23 by Rand Corporation and commissioned by for-profit CarePoint Health in Jersey City, N.J., which claimed regulating out-of-network billing rates could devastate the majority of New Jersey hospitals and physicians.

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