March 18, 2020

Out-Of-Network Billing Legislation Proceeds in Seven States

Several states have advanced legislation that would establish reimbursement rates for out-of-network providers. Bills in Hawaii and Indiana would require enrollees to receive cost estimates for elective services before their appointments. Indiana and Virginia’s bills were sent to their respective governors. Colorado’s bill was signed into law.


Colorado’s Gov. Jared Polis signed SB 43 into law. It will 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 health care provider will be reimbursed the greater of these two options.


In Connecticut, SB 323 passed the Joint Committee on Insurance and Real Estate. The bill would mandate the following with respect to a “surprise bill”:

  • An enrollee would only be required to pay the applicable coinsurance, copayment, deductible or other out-of-pocket expense that would be imposed for such health care services if such services were rendered by an in-network health care provider;
  • A health carrier shall reimburse the out-of-network health care provider or insured, as applicable, for health care services rendered at the in-network rate under the insured's health care plan as payment in full, unless such health carrier and health care provider agree otherwise; and
  • If health care services were rendered to an enrollee by an out-of-network health care provider and the carrier failed to inform the enrollee, and the enrollee was required to be informed, the carrier shall not impose a coinsurance, copayment, deductible or other out-of-pocket expense that is greater than the coinsurance, copayment, deductible or other out-of-pocket expense that would be imposed if such services were rendered by an in-network health care provider.


In Hawaii, SB 2778 passed the House chamber. It would require carriers to disclose in writing to patients the following items:

  • Coverages and benefits, including information on coverage principles and any exclusions or restrictions on coverage;
  • With regard to out-of-network coverage:
    • For elective services, the amount that the insurer would reimburse under the rate calculation for out-of-network health care
    • Examples of anticipated out-of-pocket costs for frequently billed out-of-network health care services; and
  • Information in writing and through an internet website that would permit an enrollee or prospective enrollee to estimate the anticipated out-of-pocket cost for out-of-network health care service in a geographical area based upon the difference between what the insurer will reimburse for out-of-network health care services and the rate calculation for out-of-network health care services.

When an enrollee receives emergency services from an out-of-network provider, the enrollee would not incur higher out-of-pocket costs for the emergency services than the enrollee would have incurred with an in-network provider.

Out-of-network providers would be prohibited from attempting to collect sums in excess of the amount owed by the enrollee as a copayment, coinsurance or deductible under the enrollee's health benefit plan. The carrier would pay an amount to the nonparticipating provider that the carrier would determine as reasonable. In response to a dispute, the carrier and nonparticipating provider would consult an independent, third-party database as part of their negotiations to determine a reasonable payment amount. If neither party can come to an agreement, either party could elect to enter arbitration.


 In Indiana, H 1004 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.
  • 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. The bill passed both chambers and was sent to the governor’s desk for signature.


In Nebraska, LB 997 was placed on final reading before the legislature. The bill would prohibit providers from billing enrollees in excess of any deductible or coinsurance amount for emergency services at an in-network or out-of-network facility. Out-of-network providers may bill insurers for emergency services rendered at an in-network or out-of-network facility. The insurer would pay the billed amount or notify the provider within 20 days after the claim date if the insurer deems the claim as excessive. A reasonable claim would be defined as:

  • The contracted rate under existing in-networks between the carrier and the out-of-network provider for same or similar services; or
  • 175% of the Medicare reimbursement rate for similar services in the same geographic area.

When the insurer considers the claim to be excessive, the insurer and provider would have 30 days to negotiate a settlement or engage in a mediation process.


In Oklahoma, HB 3388 passed the House chamber. It would require the insurer to pay the provider the greater of the following amounts for out-of-network emergency services:

  • Medicare reimbursement rate,
  • In-network rate,
  • Usual, customary and reasonable rate, or
  • Agreed upon 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.


In Virginia, HB 1251 was sent to the governor’s desk. It would require insurers to pay out-of-network providers who performed emergency services a commercially reasonable amount based on payments for the same or similar services provided in a similar geographic area.

When an out-of-network provider disputes the carrier's initial offer, the carrier and provider shall have 30 calendar days from the initial offer to negotiate in good faith. 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.