2019 is already stacking up to become a big year for the state and federal consideration of legislation to regulate out-of-network billing practices.
Proposed regulations range from outright bans against “surprise billing,” especially for emergency services, to mandatory patient disclosure, prescribed billing limits based on a percentage of customary Medicare charges, and mandatory negotiations between out-of-network providers and carriers to remove patients from balance billing disputes.
When physicians and insurers are unable to come to agreement on a payment contract, physicians are considered to be “out-of-network,” and beneficiaries of those plans may still receive care from out-of-network physicians who are contracted with in-network facilities.
The facility-based physicians still have an obligation to treat the patients, particularly in emergency settings, due to federal Emergency Medical Treatment and Labor Act (EMTALA) regulations.
Many plans offer little or no reimbursement for care delivered outside of their network, thus the physicians may remit the balance of the bill to the patient.
Balance billing is a symptom of a much larger problem — surprise gaps in insurance coverage due to inadequate insurance networks. Insurers continue to move towards “narrow” networks; however, in the instances where such networks have inadequate access to specialty providers, the likelihood of receiving a balance bill increases dramatically.
On the federal side, the lawmakers on both sides of the aisle are interested in tackling legislation to curb surprise medical billing. The issue has gained prominence on Capitol Hill, and Senate Health Committee leadership has identified it as a top policy priority for 2019.
In the absence of a federal ”solution”, many state legislators are already considering proposals to protect patients from balance bills in the 2019 session. The American College of Radiology encourages its state chapters to work with their respective state legislators and other stakeholders in negotiations for a balanced and fair solution.
HB 11 has been pre-filed by Rep. Connie Rowe (R) for introduction once the legislative session begins on March 3. Legislation seeks to require hospitals to bill an injured person's health insurance and only seek compensation from health insurance plans and not from the injured person, except for approved copayments and deductibles.
SB 24 was pre-filed by State Sen. Ralph Alvarado (R) on December 14, 2018. The bill seeks to incorporate definitions of terms used in the Act, including balance billing, cost sharing, and usual, customary, and reasonable rate (UCR). UCR is defined as “the eightieth percentile of all charges for a particular health care service performed by a health care provider in the same or similar specialty and provided in the same geographical area.” Additionally, the bill calls on the commissioner to promulgate administrative regulations and to specify a nonprofit organization that maintains a database of billed charges submitted by providers for health care services to be used as a benchmark for determining the usual, customary and reasonable rate for health care services. The nonprofit shall not be affiliated with any insurer offering health benefit plans in Kentucky. Lastly, the bill would require all insurers that sell health benefit plans in Kentucky to submit to the department annually all of the billed charges it receives from both participating and nonparticipating providers for each health care service.
Kentucky HB 138 (State Record)
The bill was introduced by Rep. John Sims (D) on January 9, 2019. The bill seeks to incorporate definitions of terms used in the Act, including balance billing, cost sharing, and usual, customary, and reasonable rate (UCR). UCR is defined as “the eightieth percentile of all charges for a particular health care service performed by a health care provider in the same or similar specialty and provided in the same geographical area.” Additionally, the bill calls on the commissioner to promulgate administrative regulations and to specify a nonprofit organization that maintains a database of billed charges submitted by providers for health care services to be used as a benchmark for determining the usual, customary and reasonable rate for health care services. The nonprofit shall not be affiliated with any insurer offering health benefit plans in Kentucky. Lastly, the bill would require all insurers offering health benefit plans in Kentucky to submit to the department annually all of the billed charges it receives from both participating and nonparticipating providers for each health care service.
Massachusetts SD 88 (State Record) PDF Version
Sen. Edward Kennedy (D) pre-filed “an Act reducing the financial burden of surprise medical bills for patients.” In this proposal, “Non-participating provider rate” is unfavorably benchmarked to 100 percent of the Medicare reimbursement rate or reasonable approximation thereof for those services as if they were rendered to a Medicare beneficiary not taking into consideration any beneficiary cost sharing. For services or supplies for which there is no Medicare reimbursement amount, the amount as determined by the commissioner of the Center for Health Information and Analysis is to be consistent with Medicare payment policies at a 100 percent level and set in consultation with the commissioner of insurance.
Minnesota SF 3 (State Record)
Sen. Rich Draheim (R) introduced “Patient Right to Shop Act” on January 16, 2019, and seeks to require health plan companies to develop and implement a shared savings incentive program. As outlined in the proposal, a “cost information website” is to be created and the commissioner of insurance is directed to develop a web-based interactive system for consumers to use to compare provider average charges for health care services by procedure or procedure code (CPT code). The proposal specifies that charges identified on the website would not constitute a legally binding estimate of the allowable charge for or cost to the consumer for the specific health care service, and the actual cost of the service may vary based on individual circumstances. The commissioner is directed to contract with a private entity to satisfy the requirements.
Mississippi HB 278 (State Record)
Rep. Gary Chism (R) introduced a bill to require binding arbitration as the method to resolve certain disputes between health care providers and beneficiaries on January 14, 2019. The bill specifies that any dispute between a provider and the insured arising under these provisions regarding assignment of benefits and billing shall be resolved through binding arbitration. The Office of Attorney General, Consumer Protection Division, shall enforce these provisions regarding assignment of benefits and billing.
Mississippi HB 483 (State Record)
Rep. Jarvis Dortch (D) introduced a bill on January 15, 2019, to require consumers to receive a notice and availability of mediation for balance billing by a facility-based physician in an amount greater than $250. A facility-based physician is defined in the bill “a radiologist, anesthesiologist, pathologist, emergency department physician, neonatologist or assistant surgeon to whom the facility has granted clinical privileges and who provides services to patients of the facility under those clinical privileges.” The bill includes a requirement for billing notices sent to the patient to include a conspicuous, plain-language explanation of the mandatory mediation process available for claims that exceed $250.
Missouri SB 103 (State Record)
Sen. Jill Schupp (D) introduced bill on December 1, 2018, to enact provisions relating to unanticipated out-of-network health care services. The bill stipulates that within 45 processing days of receiving the health care professional's claim, the health carrier shall offer to pay the health care professional “a reasonable reimbursement for unanticipated out-of-network care based on the health care professional's services. If the health care professional participates in one or more of the carrier's commercial networks, the offer of reimbursement for unanticipated out-of-network care shall be the amount from the network which has the highest reimbursement.” If the health care professional declines the health carrier's initial offer of reimbursement, the health carrier and health care professional shall have 60 days from the date of the initial offer of reimbursement to negotiate in good faith to attempt to determine the reimbursement for the unanticipated out-of-network care. If the health carrier and health care professional do not agree to a reimbursement amount by the end of the 60-day negotiation period, the dispute shall be resolved through an arbitration process as specified. At the conclusion of the arbitration process, the arbitrator shall issue a final decision, which shall be binding on all parties.
Montana HB 152 (LC 1144) (State Record)
Hearing scheduled 1/24
State Rep. Katharine Kelker (D), Montana, has introduced a proposal to address surprise medical bills. As introduced, the bill specifies a timeline for patient notification of scheduled medical services and stipulates that a patient may request a written estimate of charges for a health care service that exceeds $500. The bill specifies the types of information that the notification notice must include, as well as a requirement to disclose providers’ network participation. Additionally, the notification must disclose whether other health care providers may be necessary to complete the health care and indicate whether an estimate of the potential charges by other health care providers whose services may be needed must be obtained separately from those providers. Under this proposal, a health care provider shall offer a patient the opportunity to opt out of receiving a health care treatment, surgery or procedure from a health care provider who does not participate in the provider network of the patient's health insurer. If the patient opts out of using an out-of-network provider, the patient may have to reschedule or make other plans for receiving the health care treatment, surgery or procedure.
New Jersey SB 3201 (AB 4761) (State Record)
Senator Joseph Lagana (D) filed a bill on November 26, 2018, seeking to revise certain aspects of out-of-network arbitration process under the "Out-of-network Consumer Protection, Transparency, Cost Containment and Accountability Act." The proposed bill specifies that the carrier may pay the provider the billed amount or pay “at least the amount set by the 85th percentile of the FAIR Health Charge Benchmark database for the particular health care service performed by a provider in the same or similar specialty and provided in the same geographical area which shall be deemed the carrier’s final offer within 20 days from the date of the receipt of the claim for the services. The carrier shall determine whether the carrier considers the claim to be excessive, and, if so, the carrier shall notify the provider of this determination within 20 days of the receipt of the claim.”
Rep. Nathan Small (D) pre-filed a surprise billing protection act. The bill prohibits balance billing and stipulates reimbursement benchmarking as follows: For services provided under circumstances giving rise to a surprise bill, a health insurance carrier shall directly reimburse a nonparticipating provider for care rendered the greatest of the following amounts: A. if the provider participates in one or more of the health insurance carrier's commercial networks, the median amount of any commercial in-network reimbursement rates. The health insurance carrier shall provide information regarding this median amount to the provider; B. the usual, customary and reasonable rate for services. As used in this subsection, "usual, customary and reasonable rate" means the sixtieth percentile of the allowed reimbursement rate for the particular health care service performed by a provider in the same or similar specialty in the same geographic area, as reported in a benchmarking database maintained by a nonprofit organization specified by the superintendent. The usual, customary and reasonable reimbursement rate shall not increase by more than three percent per year. C. 150 percent of Medicare fee schedule. Furthermore, the bill requires a stipulation that nonparticipating provider shall not, either directly or indirectly, knowingly waive, rebate, give, pay or offer to waive, rebate, give or pay all or part of a cost-sharing amount owed by a covered person pursuant to the terms of the covered person's health benefits plan as an inducement for the covered person to seek a health care service from that nonparticipating provider, and the superintendent may impose fines on providers for unlawful rebates and inducements. The superintendent is also tasked with review of reimbursement rate for surprise bills by July 1, 2022, and every three years thereafter to ensure fairness to providers and to evaluate the impact on health insurance premiums.
Assemblyman Kevin A. Cahill (D) has filed a bill that seeks to establish protections from excessive hospital emergency charges. The bill seeks to amend the existing statute on non-participating providers by adding hospital services into the statute.” More specifically, in cases where a health care plan submits a dispute regarding a fee for payment of a non-participating hospital's emergency services, the health care plan shall, after the initial payment, pay any additional amounts it determines is reasonable directly to the non-participating hospital.
New York AB 598 (State Record)
Assemblywoman Linda Rosenthal (D) introduced a bill on January, 9, 2019, that requires health insurers to offer coverage of health care provided by out-of-network providers. More specifically, every health maintenance organization shall offer out-of-network coverage as an optional rider to any contract and shall offer at least one contract option that includes out-of-network coverage. These options shall be made available both within the statewide health benefit exchange and outside of the health benefit exchange.
Oklahoma SB 218 (State Record)
Sen. Dewayne Pemberton (R) pre-filed legislation to create Oklahoma Right to Shop Act. The bill will be introduced once the legislative session begins on February 4, 2019. The proposed measure requires carriers offering individual or group coverage in the state to incentivize enrollees to shop for lower-cost participating health care providers that provide similar levels of health care coverage, annually inform enrollees of incentives to shop for lower cost health care providers and to file a description of the incentive program with the insurance commissioner. Carriers cannot use the administrative costs of the incentive program for rate development or rate filing purposes. Additionally, carriers must provide an interactive tool on its website allowing enrollees to request and obtain from the carrier information on the payments made by the carrier to network entities or providers for comparison purposes. The interactive tool must provide information to the enrollee related to out-of-pocket costs. The measure allows carriers to contract with a third-party vendor to create this tool or request the insurance commissioner for an exemption to this requirement. An enrollee will be allowed to utilize out-of-network providers if the costs are the same or lower than the enrollee’s current provider and if the enrollee informs the carrier via an online form.
Oregon HB 2701 (State Record)
Rep. Rob Nosse (D) introduced a measure on January 14, 2019, to prohibit "surprise billing" by out-of-network health care providers for services provided at in-network health care facilities. The bill stipulates that a provider who is an out-of-network provider for a health benefit plan or health care service contract may not collect or attempt to collect charges billed for emergency services or other inpatient or outpatient services provided to an enrollee in the health benefit plan or health care service contract if the services were provided at an in-network health care facility.
South Carolina SB 226
Sen. Michael W. Gambrell (R) introduced a bill on December 12, 2018, to establish requirements for emergency service system billing and insurance coverage practices applicable to out-of-network emergency medical service providers. The bill stipulates that an insurer shall reimburse an out-of-network emergency medical service (EMS) agency directly if the EMS agency has submitted a completed standardized form to the department requesting out-of-network direct reimbursement from an insurer identified by the EMS agency. Moreover, when an insurer has reimbursed an out-of-network EMS agency at the same rate it has established for a network EMS agency, the out-of-network EMS agency may not bill the insured directly or indirectly or otherwise attempt to collect from the insured for the service provided, except for a billing to recover a copayment, coinsurance or deductible as specified in the health insurance policy.
Virginia HB 2538 (State Record) / Virginia SB 1354 (State Record)
Delegate R. Lee Ware (R) introduced a bill on January 9, 2019, to add definitions and to address balance billing reimbursement in emergency and post-stabilization scenarios. “Fair market value” is defined as the price that is determined on the basis of the amounts billed to, and the amounts accepted by providers, from health carriers for managed care plans, by category of providers for comparable out-of-network emergency services in the community where the services are rendered, including amounts accepted under single case agreements, emergency-only participation agreements, and rental network agreements. “Fair market value” determinations do not include amounts accepted by providers for patients covered by Medicare or Medicaid. The bill stipulates requirements to be met for patient access to elective services and out-of-network services for both facility and office-based settings.
Virginia HB 2543 (State Record) / Virginia SB 1362 (State Record)
Delegate Kathy J. Byron (R) introduced a bill on January 9, 2019, that would prohibit an out-of-network provider from balance billing a covered person for the costs of an ancillary service when an in-network provider referred the covered person to the out-of-network provider. The bill includes a stipulation for out-of-network providers to provide covered person an out-of-network provider's notice of liability for balance as required prior to providing an ancillary service.
Virginia HB 2544 (State Record)
Delegate Kathy J. Byron (R) filed a bill on January 9, 2019, related to out of network services. The bill stipulates that an individual “shall not be required to pay the excess of the amount the out-of-network provider charges over the amount the health carrier is required to pay under this section for covered services except applicable deductibles, copayment, coinsurance, or other cost-sharing amounts deemed by the health carrier to be non-covered services. The health carrier complies with this requirement if the health carrier provides benefits with respect to an emergency service in an amount equal to the greatest of (i) average of the contracted commercial rates paid by the health carrier for the same emergency service in the geographic region, as defined by the Commission, where the emergency service was provided; (ii) the amount for the emergency service calculated using the same method the health carrier generally uses to determine payments for out-of-network services, such as the usual, customary, and reasonable amount; and (iii) the amount that would be paid under Medicare for the emergency service.”
Virginia SB 1228 (State Record)
Sen. Amanda Chase (R) filed a bill on January 4, 2019, on direct payment and out-of-network health care provider reimbursement. Under the proposal, the health carrier shall “pay to an out-of-network health care provider an amount equal to, less any cost-sharing requirement, the greatest of (i) the amount negotiated with out-of-network providers for the emergency service or, if more than one amount is negotiated, the median of these amounts; (ii) the amount for the emergency service calculated using the same method the health carrier generally uses to determine payments for out-of-network services, such as the usual, customary, and reasonable amount; or (iii) the amount that would be paid under Medicare for the emergency service. The receipt of payment of such amount by the out-of-network health care provider from the health carrier for emergency services pursuant to this section shall preclude and prevent the out-of-network health care provider from billing or seeking payment from the covered person for any amounts other than applicable cost-sharing requirements.”
Sen. Frank W. Wagner (R) introduced a bill on January 8, 2019, stipulating that for emergency services an individual shall not be required to pay the excess of the amount the out-of-network provider charges over the amount the health carrier is required to pay under this section except applicable deductibles, copayment amounts, coinsurance rates and amounts charged for services that are deemed by the health carrier to be non-covered services.
Washington HB 1065 (State Record) / Washington SB 5031 (State Record)
The bill establishes a ban on balance billing of consumers enrolled in fully insured, regulated insurance plans and plans offered to public employees. The measure seeks to remove consumers from balance billing disputes and require that out-of-network providers and carriers negotiate out-of-network payments in good faith under the terms of this act. The allowed amount paid to an out-of-network provider for health care services shall be limited to a commercially reasonable amount, based on payments for the same or similar services provided in a similar geographic area. Within 30 calendar days of receipt of a claim from an out-of-network provider or facility, the carrier shall offer to pay the provider or facility a commercially reasonable amount. If the out-of-network provider or facility wants to dispute the carrier's payment, the provider or facility must notify the carrier no later than 30 calendar days after receipt of payment or payment notification from the carrier. If the out-of-network provider or facility disputes the carrier's initial offer, the carrier and provider or facility have 30 calendar days from the initial offer to negotiate in good faith. If the carrier and the out-of-network provider or facility does not agree to a commercially reasonable payment amount within 30 calendar days, the dispute shall be resolved through arbitration, as provided by this act.
An out-of-network provider that provides services at an in-network facility may not balance bill an enrollee for the following health care services:
(a) Emergency services provided to an enrollee at an in-network hospital licensed under chapter 70.41 RCW; and
(b) Nonemergency health care services provided to an enrollee at an in-network hospital licensed under chapter 70.41 RCW or an in network ambulatory surgical facility licensed under chapter 70.230 11 RCW if the services involve surgical or ancillary services. "Surgical or ancillary services" are defined as surgery, anesthesiology, pathology, radiology, laboratory, or hospitalist services.
West Virginia HB 2380 (State Record)
Delegate Barbara Evans Fleischauer (D) filed legislation on January 14, 2019, seeking to protect consumers from surprise bills by health care providers. The measure defines surprise bills and adds new disclosure requirements for health care providers, hospitals and insurers. The bill mandates that insurers develop an access plan for consumers and outline the criteria that the insurer has used to build its provider network, including information about the breadth of the network in “consumer-friendly language” and the criteria must be made available through the health carrier’s on-line and in-print provider directories. The bill stipulates required disclosures for facilities and physicians. Lastly, the measure stipulates that the “consumer must sign an assignment of benefits form which will enable the provider to seek payment directly from the consumer’s insurer by submitting the assignment of benefit form along with a copy of the bill believed to be a surprise bill. Upon payment of a reasonable payment of a surprise bill, the provider can dispute the amount through an independent dispute resolution process established by the commissioner. (b) The independent dispute process will consider, among other things, whether there is a significant disparity between the fee charged by the health care provider as compared to other fees paid to similarly qualified out-of-network providers in the same region, the level of training and education of the health care provider, and the complexity and circumstances of the case.”