Three things Governor Christie and the state legislature can do to reduce the expense of state employee health coverage, without compromising the quality of health care provided, include the following:
Amend the Insurance Fraud Prevention Act; N.J.S.A. 17:33A-1 et seq. (“IFPA”) to apply to the State Health Benefits Plan. Do you know that the State’s strongest weapon against fraudulent insurance claims isn’t available to protect the State’s own Health Benefit Plan? Because the Insurance Fraud Prevention Act applies only to insured claims – not those which are self-insured – the State of New Jersey and other large entities that self-insure for health benefits can’t benefit from its provisions. Individuals or entities that cheat the State Health Benefits Plan aren’t subject to the statutory treble damages and attorneys’ fees sanctions that deter these cheaters or at least take away the financial incentive to engage in such conduct.
Require all services in an In-Network Hospital be compensated on an In-Network basis. You may not realize it but even if you go to an In-Network hospital for care – without being informed – some of your care may be provided by consultants who are Out-Of Network providers. The providers may bill at a higher rate for their time than they would if they were In-Network, potentially costing the patient and the State Health Benefits Plan thousands of dollars for care an In-Network consultant, sometimes from the same practice, would have provided for a fraction of the cost. In-Network hospitals and providers benefit from the steering that takes place when a patient / insured chooses a In-Network provider, this steering is accomplished through reduced cost-sharing obligations for patients who chose In-Network providers. When all of the providers are In-Network this arrangement achieves its intended result; quality, cost-controlled care. When Out-Of-Network contractors provide care in an In-Network facility they piggy-back on the In-Network status of the facility without the limitations of In-Network status for themselves. These providers are often not chosen by the patient but are assigned rotationally by the hospital or by referral from another provider and the patient is not informed the provider is Out-Of-Network or what his or her charges will be. Because of the high percentage of reimbursement for Out-of-Network care provided by the State Health Benefits Plan it is an attractive target for those who would exploit this opportunity for their own benefit.
Limit Out-Of-Network benefits to those instances where a genuine need for the expertise of a particular individual provider or facility is necessary. New Jersey has a bountiful supply of talented medical providers and top notch health care facilities throughout the state, and most of them belong to the patient care networks available to enrollees in the State Health Benefits Plan. While no accident or illness is routine when it is your own or that of someone you love, most injuries or illnesses can be treated by the able professionals and facilities in your local care networks. The New Jersey State Health Benefits Plan is among the most generous when it comes to Out-Of-Network Benefits and Out-Of-Network care is a significant aspect of the health care expenses paid. (Stellar providers in bordering states like New York and Pennsylvania are also members of the available patient care networks.)
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