EDISON - They go to in-network hospitals to be treated by in-network doctors, but each year thousands of New Jersey families still wind up being hit with large, surprise bills for out-of-network expenses.

Kane In Your Corner finds the situation can arise anytime something out of the ordinary occurs, because it's already too late for patients to know whether the necessary treatment will be covered, or to make other arrangements. Now, one New Jersey lawmaker has written reform legislation, while the state Medical Society says the proposed law might make things worse.

Lisa Waterman still remembers how quickly things seemed to turn for the worse when her son, Dylan, was born last summer.  "The baby's heart rate had been dropping," she recalls. "They really weren't sure what to expect when he came out." Fortunately, Dylan was born problem-free.

The Watermans also expected no problems with their medical bills. After all, both their doctor and CentraState Hospital in Freehold were in-network providers. So they were surprised when they received a $1,175 bill for "out of network services," including a neonatal specialist who had been called in as a precaution.

"How could a doctor, one that we didn't request, that we weren't asked about, that was just brought into the room, how could they hold us on the hook for that?" Lisa Waterman wonders.

What happened to the Watermans is commonplace, but some insurance experts say it's unfair. "If you're in delivery, you're not going to say, 'No, stop, are you in-network?'," says Karen Coupe, an insurance denial specialist. "I mean, it just doesn't make any sense."

Assemblyman Craig Coughlin (D-Woodbridge) has written a bill that would stop the practice of surprise billing. Unless families are notified in advance, the insurance company and health care provider would be forbidden to bill patients for any unpaid balance. They would have to settle the bill among themselves, going to arbitration if necessary. "They went to the network doctor, they went to their network hospital, they did all the right things, so now somebody needs to stick up for them," Coughlin says.

But Mishael Azam, chief operating officer of the Medical Society of NJ, says Coughlin's legislation could do more harm than good by making it harder for doctors and hospitals to be fairly compensated.  "You're impacting access, you're impacting quality, because you're not going to have quality physicians coming to New Jersey," she says. Azam agrees families like the Watermans are caught in the middle, but says lawmakers should focus on forcing insurance providers to bring more doctors into their networks.

In the end, the Watermans negotiated their portion of the bill down to about $300. Their insurance company, Blue Cross Blue Shield, says it paid the specialist the same amount it would have paid an in-network doctor, although that was just a small fraction of the bill. The specialist, Central Jersey Newborn Center, says it also agreed to take less money, and tells Kane In Your Corner, "Since this has been resolved to the satisfaction of all parties, we have no further comment." But Lisa Waterman says she is not satisfied; she says she paid the bill reluctantly, and only to avoid being sent to a collection agency. 

But the Watermans are among the lucky ones. Had Dylan's delivery gone just a bit worse, the bill could have been staggering. Lisa Waterman says that's not right. "Now maybe you're $300 or maybe you're $30,000 in debt, because they don't accept the insurance," she says.