Nine state legislatures have recently advanced legislation written to address the adverse effects of out-of-network billing.
Some share similar definitions of a “usual and customary rate.” The State of Virginia legislature uses a similar definition but calls it a “market-based value.” Some states further detail their independent resolution processes, while others describe the components of a “good faith estimate.”
In Arizona, S 1602 was referred to the Senate Committees on Rules and Finance. The bill calls for insurers to reimburse out-of-network health care providers the greater of the following rates for emergency services rendered to their enrollees:
- The in-network amount for a similar service;
- The usual, customary and reasonable rate;
- Medicare reimbursement rate; or
- An amount the insurer agrees to pay that is greater than the above options.
The bill defines its usual and customary rate as the 80th percentile of all charges for a particular health care service performed by a provider in a similar specialty in the same geographic area as reported in a benchmarking database maintained by a nonprofit organization.
In Colorado, the Senate passed SB 43 and referred the bill to the House Health and Insurance Committee. It would change the reimbursement rate for out-of-network providers as follows:
- 105% to 110% of the insurer’s average in-network rate for that service in the same geographic area; or
- 60th percentile of the in-network rate instead of the previous median in-network rate for the same service in the same geographic area.
The provider would be reimbursed the greater of the above options.
In Florida, HB 959 would require licensed facilities to provide in writing or electronically a “good faith estimate” of reasonably anticipated charges by the facility for a patient’s treatment or specific condition. The estimate would be provided to the patient or prospective patient upon scheduling a medical service, or upon admission to the facility, or before providing elective medical services on an outpatient basis. It would prohibit facilities from charging enrollees more than 110% of the estimate. If the facility determines such charges are warranted, the facility must provide the patient with a written explanation of the excess charges as part of the itemized statement to the patient.
Facilities would also be required to establish an internal process for reviewing and responding to patients’ grievances regarding statement charges. The facility would be required to provide an initial response to a patient grievance within seven business days after the patient formally files a grievance.
The bill passed the House Health and Human Services Committee and is scheduled for a second reading on the House floor.
In Hawaii, HB 1881 was referred to the House Consumer Protection and Commerce Committee, which would add a definition of emergency services billing as:
(a) When an enrollee receives emergency services from an out-of-network provider, the provider would be prohibited from billing the enrollee, insurer or any other entity any amount in excess of any applicable charges the provider would be entitled to charge a Medicare enrollee who receives such services, including, without limitation, any copayment, coinsurance or deductible that would be owed by a Medicare enrollee to the out-of-network provider for the services;
(b) The out-of-network provider would accept payment of the amounts under subsection (a) as payment in full for the emergency services rendered;
(c) To the extent that the emergency services are covered under the enrollee's managed care plan, any liability the managed care plan may have for the services shall not exceed the amount the out-of-network provider is entitled to bill under this section;
(d) A health care provider or facility shall bill an insurer only for a health intervention service that is a medical necessity. The health care provider or facility shall not bill or otherwise attempt to collect from an enrollee any amount not paid by a health carrier for a health intervention service that is a medical necessity, other than an applicable copayment, coinsurance or deductible; and
(e) An out-of-network provider means a facility, health care provider or health care professional that is not subject to a written agreement with the enrollee's insurer governing the provision of emergency services.
Also in Hawaii, HB 2504 would require insurers to disclose in writing to patients prior to administering elective services that are not covered under the enrollee’s health care plan the following items:
- That certain facility-based health care providers may be requested to render care to an enrollee during treatment; and
- That the provider may not have contracts with the enrollee’s insurer and therefore considered to be out-of-network providers:
- That the services provided would be out-of-network and the cost may be substantially higher than in-network services;
- A notification that the covered person may opt to accept and pay the charges for the out-of-network services or elect remedies available under state or federal law; and
- A statement indicating that the enrollee may obtain a list of in-network providers and request a provider from that list.
Insurers would be required to disclose to the patient in writing the estimated amount the provider would bill the patient for elective services and obtain consent from the patient at least 24 hours prior to providing the services. In the event there is not agreement on payment, insurers, mutual benefit societies and health maintenance organizations would enter into an independent dispute resolution process with out-of-network providers to resolve their outstanding obligations, as established by the commissioner. If no resolution is met, the insurer would pay the out-of-network provider the amount billed by the out-of-network provider.
The House version passed the Health Committee and was referred to the House Consumer Protection and Commerce Committee.
In Indiana, H 1004 passed the House floor and was referred to the Senate Health and Provider Services Committee. The bill would require the health care facility or provider to issue the enrollee a form that would include:
- The text: "[Name of facility or practitioner] intends to charge you more for [name or description of health care services] than allowed according to the rate or amount of compensation established by the network plan applying to your coverage.[Name of facility or practitioner] is not entitled to charge this much for [name or description of health care services] unless you give your written consent to the charge;"
- A good faith estimate of the amount that the facility or practitioner intends to charge for the health care services provided to the covered individual; and
- The text: "The estimate of our intended charge for [name or description of health care services] set forth in this statement is provided in good faith and is our best estimate of the amount we will charge."
The patient would be required to receive the form at least five days before the health care services are scheduled to be provided.
Kansas’ Sen. Barbara Bollier introduced S 357. It would establish an independent dispute resolution process for resolving payment disputes between insurers and out-of-network providers. The arbiter would be required to determine the amount the insurer pays the provider within 30 days of receiving the request. The amount would be either:
- The amount determined by the parties through a settlement, or
- An amount determined reasonable by the arbiter.
The bill was referred to the Senate Committee on Financial Institutions and Insurance.
Also in Kansas, S 150 was amended in the Senate Health and Welfare Committee. The amendment would mandate the insurance commissioner to promulgate the following regulations:
- Specify a nonprofit organization that maintains a database of billed charges submitted by health care providers to be used as a benchmark for determining the usual and customary rate. The nonprofit would not be affiliated with any insurer;
- Insurers would also be required to submit all billed charges received from in- network and out-of-network providers for each health care service; and
- The usual and customary rate would be the 80th percentile of all charges for a particular health care service performed by a provider in a similar specialty in the same geographical area.
The bill would require insurers to reimburse out-of-network providers the greater between:
- The median in-network rate for the current year, or
- The median in-network rate for 2018.
Out-of-network providers may request an independent dispute resolution and would receive a decision within 60 days of receiving the request.
Oklahoma’s Rep. Chris Sneed introduced HB 3388, which was referred to the House Insurance Committee. If adopted, the bill would require insurers to pay the provider the greater of the following amounts for out-of-network emergency services:
- The Medicare reimbursement rate;
- The In-network rate; or
- The usual, customary and reasonable rate.
It would define the usual, customary, and reasonable rate as 80th percentile of all charges for the particular health care service performed by a provider in a similar specialty in the same geographical area as reported in an independent benchmarking database maintained by a nonprofit organization specified by the insurance commissioner.
In the event of a payment dispute, the provider, facility or insurer may request arbitration. The arbitrator would be required to submit a written decision within 51 days of receiving the arbitration request.
Rep. Stephen Archambault introduced S 2228, which was referred to the Senate Health and Human Services Committee. The bill would establish an independent dispute resolution process for payment disputes between an insurer and out-of-network provider. The process would use the American Arbitration Association as the dispute resolution entity. The arbitrator would issue a written decision within 30 days of receiving the parties’ final offers.
In Virginia, HB 901 was amended in the House Appropriations Committee and failed.
It would have required insurers to reimburse out-of-network providers who provided emergency services the lower of:
- The market-based value for such services, or
- 125% of the Medicare reimbursement rate.
Also in Virginia, HB 1251 passed the House chamber. It would require insurers to pay out-of-network providers who performed emergency services the market-based value for the service. The market-based value would be a fixed price, based on claims paid by data suppliers in 2018. It is the weighted average of:
- The average amounts paid to and accepted by providers from Medicare, and
- The unweighted average of the average amounts paid to and accepted by providers from each insurer for comparable emergency services.
The market-based value would be adjusted annually by the Bureau of Insurance.
If a payment resolution is not reached, either the insurer or out-of-network provider may request the insurance commission to review the disputed reimbursement amount.