January 16, 2020

States Consider Legislation to Address Out-of-Network Medical Expenses

As election-year state legislative sessions begin across the country, seven states are addressing out-of-network legislation that would require patient disclosures, reimbursement rates adjustments and arbitrated dispute resolution processes.

In Colorado, S 43 is scheduled for a hearing before the Senate Health and Human Services Committee. The bill stipulates changes to the reimbursement rates health care providers receive for out-of-network services. The legislation would set the rates at 100% to 110% of the insurer’s median in-network rate of reimbursement or 60th percentile of the in-network rate of reimbursement rather than the median. Providers would be reimbursed the greater of the two rates.

Florida State Sen. Doug Broxson introduced FL S 1884. It would require health care providers to notify patients in writing upon their referral to an out-of-network provider for elective services. The notice would be required to inform the patient that the services would be provided on an out-of-network basis and may incur additional cost-sharing responsibilities for the patients. Failure to provide the notice would result in disciplinary action against the provider.

In Indiana, H 1230 was referred to the House Committee on Public Health. The bill would require out-of-network providers at a hospital or in-network ambulatory outpatient surgical centers to provide a written notice to patients that the specific health service will be provided by an out-of-network provider.

The patient would be required to acknowledge receipt of the notice by agreeing to or declining the services from the out-of-network provider. In the event the patient declines the service by an out-of-network provider, the hospital or ambulatory outpatient surgical center would be required to help the patient find an in-network provider or to ensure the patient is not charged more than what would have been charged by an in-network provider for a similar service.

Also in Indiana, IN S 3 would prohibit out-of-network providers at hospitals or ambulatory outpatient surgical centers, that are an in-network provider for the patient’s insurer, to bill the patient more than an in-network payment made under a policy of accident and sickness insurance, an individual contract or a group contract for covered services. The patient’s charges could also not exceed the copayment, deductible or coinsurance amounts applicable under the policy or contract.

Upon the patient’s request, the hospital or ambulatory outpatient surgical center would be required to provide a good faith estimate of the cost of care, including the patient’s responsibility, at least five days before the service or procedure date. The estimate must include expected costs from the facility, professional and imaging services and drugs or medical devices associated with the service or procedure. The bill was referred to the Senate Committee on Health and Provider Services.

In Kentucky, H 179 was referred to the House Banking and Insurance Committee. The bill defines the usual and customary reimbursement rate for out-of-network providers as the 80th percentile of all charges for a health service provided by a provider in similar specialty and provided in the same geographical area.

In Rhode Island, H 7042 was referred to the House Committee on Health, Education and Welfare. The bill would prohibit health providers from seeking payment from patient for emergency out-of-network services except for copayments, deductibles or other cost-sharing payments at in-network rates specifically permitted under the patient’s covered services. Providers and insurers would use an arbitrated dispute resolution process provided by the American Arbitration Association as the resolution entity when they can’t agree on the fees.

In Virginia, H 58 was referred to the House Labor and Commerce Committee, and S 767, its Senate companion bill, was referred to the Senate Commerce and Labor Committee. Both bills would limit the fees patients are required to pay an out-of-network provider to no more than the cost-sharing requirements. The requirements would not be allowed to exceed the customary payment for the same services provided on an in-network basis. If a resolution is not reached between the provider and insurer after 30 days, either party may request the Commission’s Bureau of Insurance to review the disputed reimbursement amount.

In West Virginia, H 2380 was referred to the House Banking and Insurance Committee. The bill would require health care providers to disclose details about their plan and hospital affiliations to patients and prospective patients in writing or through their website prior to the patient receiving elective services. Patients must also receive a verbal description of these details at the time an appointment is scheduled.

H 2380 would also require out-of-network providers to inform patients, prior to providing elective services, that the actual or estimated amount for the service is available upon request. When requested, such costs must be disclosed in writing with a warning that they could increase if unanticipated complications occur. Physicians would also be required to provide the patient and the inpatient or outpatient hospital where the patient is scheduled for admission with the name, practice name, mailing address and phone number of any other physician who is scheduled to treat the patient, as well as information about how to determine the health plan in which the provider participates.

Patients would be required to sign an assignment of benefits form, which will enable the health care provider to seek payment directly from the patient’s insurer. If there is not agreement between the insurer and health care provider, the provider can dispute the amount through an independent dispute resolution process established by the commissioner.