New Jersey Rule Would Set Price Limit on Hospital Charges for 2,000 Outpatient Procedures

New auto insurance rules in New Jersey would set a price limit on what hospitals can bill for 2,000 previously unregulated outpatient procedures, according to an report.

According to the Insurance Council of New Jersey, the state limits what freestanding ambulatory surgery centers may charge but does not limit the amount hospitals charge for the same outpatient procedures.

The new auto insurance rules would target business practices at Meadowlands Hospital Medical Center in Secaucus, N.J. According to the report, the new owners of the hospital have been referring auto accident victims from their same-day surgery center to the hospital to take advantage of a fee loophole. Insurance companies say the hospital is billing them as much as 3,000 percent more than its own surgery centers charge for the same treatment.

For example, the state prevents same-day surgery centers from charging more than $3,000 for a knee arthroscopy; Meadowlands charges $90,000. Surgery centers can bill insurance companies up to $3,800 for steroid injections to an accident victim's lower back; the hospital charges $67,715.

New Jersey Banking and Insurance Commissioner Thomas Considine proposed auto insurance rules in Aug. 2011 that would limit hospital charges for 2,000 outpatient procedures. The rule would stall premium increases that have occurred as a result of the loophole in auto insurance regulations, according to the report. Officials at Meadowlands are opposing the changes, with the backing of 10 state legislators who feel the new rules would hurt the financial health of the state's hospital industry.

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