April 17, 2019

State Legislation Formulates Solutions for Out-of-Network Payments

Legislative proposals under consideration in eight states are suggesting various formulae for insurers to pay out-of-network providers for their services and to spare patients from extraordinary costs for their medical care.

In Alabama, HB 11 cleared the House chamber and was referred to the Senate Banking and Insurance Committee. The bill would require hospitals to seek reimbursement directly from the patient’s health insurer, except for copayments and deductibles.

In Colorado, HB 1174 passed the Senate Judiciary Committee and was referred to the Finance Committee. The bill would require health insurance carriers, health care providers and health care facilities to inform enrollees about services by out-of-network providers and in-network and out-of-network facilities.

The bill would mandate out-of-network providers and facilities be reimbursed at 105 percent of the carrier’s median in-network rate for the same service in a similar geographic area for the prior year as determined based on claims data from the state’s all-payer health claims database.

Carriers of enrollees who receive emergency services at any out-of-network facility operated by the Denver Health and Hospital Authority would reimburse providers at the carrier’s median in-network rate for the service provided in a similar facility in the same geographic area or 250 percent of the Medicare reimbursement rate.

In Colorado, SB 134 is scheduled for a hearing before the Senate Health and Human Services Committee. For enrollees that receive emergency services at an out-of-network facility, the bill would mandate that insurers reimburse the facility at either the insurer’s average in-network rate, 125 percent of the Medicare reimbursement rate or 100 percent of the average in-network rate for the same service provided in a similar facility in the same geographic area for the prior year. It would require an out-of-network provider in an in-network facility to inform the patient that they may obtain a list of in-network providers for an elective service.

In Louisiana, HB 371 was referred to the House Insurance Committee. The bill would allow enrollees to request an independent dispute resolution for an out-of-network health benefit claim if the claim amount unpaid by the insurer is greater than $500 (after copayments, deductibles and coinsurance is applied). Enrollees would also be allowed to make the request if the health benefit claim is for emergency care or if the provider in a facility is a preferred provider.

Michigan’s Rep. Roger Hauck introduced HB 4459. It would mandate out-of-network providers to accept 125 percent of the Medicare reimbursement rate as payment for emergency services at an in-network facility. If enacted, this rate would also apply to an out-of-network facility for an elective service by an out-of-network provider if the enrollee does not have the ability to choose a participating provider.

Additionally, out-of-network emergency care providers and out-of-network elective care providers would not be allowed to collect or attempt to collect from the covered person, any excess amount other than applicable coinsurance, copayments or deductibles. The bill was referred to the House Health Policy Committee.

Also in Michigan, Rep. Frank Liberati introduced HB 4460 which was referred to the House Health Policy Committee. The bill would prohibit out-of-network providers of an elective service from billing any cost not covered by the enrollee’s non-emergency health benefit plan unless the patient consents in writing at least 24 hours in advance to receive services from the out-of-network provider. After consent is provided, the bill would require out-of-network providers to give non-emergency patients a written estimate of the cost for services.

In Missouri, SB 103 cleared the Senate chamber is scheduled for a hearing before the House Insurance Policy Committee. The legislation would mandate health care providers to send claims for charges for emergency out-of-network services to the patient’s insurers within 180 days of the service. The bill also requires insurers to pay the provider a reasonable reimbursement within 45 days. If enacted, and the provider declines the insurer’s reimbursement offer, both parties would have 60 days to negotiate before facing an arbitration process. The arbitrator would then determine an amount between 120 percent of the Medicare reimbursement rate and 70th percentile of the usual and customary rate for emergency out-of-network services.

In Texas, SB 1264 cleared the Senate chamber. It would ban balance billing by out-of-network providers and strike out language on enrollees being a party to existing mediation provisions. The bill would allow mediation between providers and insurers for disputes regarding emergency care, out-of-network laboratory services or diagnostic imaging services. Although the bill does not stipulate particular benchmarking for reimbursement, it does state the insurer would pay the provider at the usual and customary rate.

In Washington, HB 1065, passed the Senate Rules Committee. The bill would require coverage billed at in-network rates for emergency services that screen and stabilize enrollees and would prohibit prior authorization. It would prohibit balance billing directed to enrollees for elective services, including radiology, at in-network hospitals.