Proposed NJ legislation could cause hospitals to close, says CarePoint CEO


CarePoint Health CEO Dennis Kelly has proposed an alternative to the out-of-network reform bill several top Democratic lawmakers in New Jersey introduced Thursday.

Under the reform bill, "healthcare facilities would be prohibited from billing the patient for urgent or emergency out-of-network care in excess of any of the deductibles, copayments or coinsurance amounts that they would normally charge for in-network care," according to an NJBIZ report.

Healthcare facilities would also be prohibited from billing the out-of-network patient's insurance company for more than the maximum payment for a given urgent or emergency service, according to the report.

The maximum payment would be set by an established healthcare price index and would be maintained by an organization of the Department of Banking and Insurance's choosing.

"There are some providers who use the out-of-network structure as part of their business model," Assemblyman Troy Singleton (D-Mount Laurel) told NJBIZ. "What we're trying to do is create some structure to the system."

The bill would also force insurance companies to update their websites at least every 20 days with lists of all in-network providers.

CarePoint Health — a system that includes Bayonne (N.J.) Medical Center, Christ Hospital in Jersey City, N.J., and Hoboken (N.J.) University Medical Center — has come out against the proposed bill. "This bill is a massive gift to large insurance companies, and a shot across the bow against the Medicaid population and undocumented citizen population," a CarePoint spokesman said after the legislation was introduced.

CarePoint CEO Dennis Kelly proposed an alternative solution to the out-of-network reform bill earlier this week. His proposal calls for equivalent reimbursement rates for all patient encounters.

"We in New Jersey are seeking to find answers on how can we achieve universal access to quality healthcare at low cost," said Mr. Kelly. "If the legislature believes that rates must be set, it must be done holistically and not for just one segment of reimbursement."

Mr. Kelly emphasized the importance of the issue to his hospitals, which operate in urban settings and all of which went bankrupt before being bought by CarePoint. "By capping out-of-network reimbursement without ensuring a reciprocal increase in payments for Medicaid, uninsured, and in-network, many urban hospitals will not survive and in CarePoint Health's case, our hospitals may be forced to close," said Mr. Kelly.

Under the proposed legislation, community-based urban hospitals' only piece of negotiating leverage with insurers the threat of terminating a contract and forcing them out of network would be gone, according to Mr. Kelly.

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