An arbitration system to resolve payment disputes between insurers and out-of-network providers over surprise medical bills in New Jersey has resulted in payments that are much higher than prevailing in-network rates for the same services, researchers found.

The study, published in the January issue of Health Affairs, found that New Jersey’s final-offer arbitration system “appears likely to increase health care costs relative to other surprise billing solutions and perversely incentivizes providers to inflate their charges over time,” the authors wrote.

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• Health Plan Weekly