The dispute pits a powerhouse hospital system against one of the region’s largest purchasers of health care. Northwell has 23 hospitals, 750 outpatient facilities, and more than 70,000 employees, which it says makes it the largest private employer in New York state. The 32BJ Health Fund controls more than $1 billion in annual health spending on behalf of 200,000 members -- unionized property workers like doormen, janitors, and superintendents.

Excellent Care
Lissade, who went to Northwell’s hospital in Forest Hills, Queens, said he had no idea that some of the doctors who saw him didn’t take his health plan. “I didn’t really think about how much it was going to cost,” he said. His care was excellent, he said.

In Washington, health-care industry groups have lobbied lawmakers over how to resolve disputed bills. Insurers prefer a policy to set a benchmark rate that would limit how much out-of-network physicians can collect. Doctors and hospitals favor private arbitration to settle billing disagreements.

The proposal emerging from Congress would set a minimum benchmark payment at the median in-network reimbursement rate – so insurers would pay out-of-network doctors at least as much as they typically pay physicians in their network. If either side disputes that price, they could ask an arbitrator to help reach an agreement.

“No one wants to be told how much they can get paid by the government,” said Gary Claxton, senior vice president at the Kaiser Family Foundation, a health research group. But he said high prices have driven health-care spending in the U.S.

The 32BJ Health Fund is getting more aggressive about steering members away from what it considers higher-cost or lower-quality care. About 12% of the total it paid to physicians practicing at Northwell facilities, or $4.2 million, went to out-of-network providers over three years between 2016 to 2018.

At other local hospital systems, the percentage of out-of-network payments ranged from 3% to 10%, according to data the fund shared with Bloomberg News. The plan paid at least twice as much to out-of-network doctors at Northwell than at any other system.

High Rates
“That raised a question for us as to whether there has been, implicitly or explictly, a business decision by Northwell to allow doctors to be out-of-network and to bill at really high rates,” Rothstein said.

Northwell insists the answer is no. Outside doctors that have admitting privileges at Northwell bill the health plan separately and aren’t authorized to use Northwell’s name on their bills, Aviles said.

“Legally we can’t tell another corporation what to do and how much to bill,” Aviles said.