States Continue to Implement Surprise Medical Billing Protections

By Christina Cousart

Updated June 24, 2019
During the 2019 legislative session, states have continued to advance protections for consumers against surprise medical balance bills – charges for unexpected, out-of-network medical care. To date, four new states have enacted multi-pronged policies that prohibit balance bills, institute a process for providers and carriers to resolve billing disputes, and foster pricing transparency between providers, carriers, and consumers to avoid situations that lead to balance bills. Texas also approved legislation strengthening its existing consumer protections. Here are highlights of the new legislation.

 

Colorado (HB 1174) Nevada (AB 469) New Mexico (SB 337) Texas (SB 1264HB 2041)[1] Washington (HB 1065)
Balance billing protections          
Holds consumers harmless ✓*
 

Prohibition in case of emergencies

✓[2] [3]
 

Prohibition in case of out-of-network (OON) services delivered at an in-network facility

[4] [5] [6]
 

Applicable providers/ facilities

 

Person who is licensed or otherwise authorized in the state to furnish health care services including:

●  Physicians

●  Dentists

●  Optometrists

●  Anesthesiologists

●  Hospitals

●  X-ray

●  Laboratory

 

Excludes ambulance providers, but charges the insurance commissioner with setting payment methods for ambulance services.

 

Physician or other health care practitioner who is licensed or otherwise authorized in this state to furnish any health care service; and institutions providing health care services including:

●  Hospitals

●  Surgical centers for ambulatory patients

●  Skilled nursing facilities

●  Residential facilities for groups

●  Laboratories

 

Emergency facilities include hospitals or independent centers for emergency medical care

 

Licensed health care professionals, hospitals, or other facilities licensed to furnish health care.

 

Facilities include entities providing health care services including:

●  Hospitals;

●  Ambulatory surgical centers;

●  Birth centers;

●  Drug and alcohol treatment centers;

●  Laboratory, diagnostic, and testing centers;

●  Health provider’s offices or clinics

●  Urgent care centers

●  Freestanding emergency rooms

●  Therapeutic health care settings

 

Individual licensed under the laws of this state to practice medicine or health care facilities.

 

Facilities include:

●  hospitals;

●  Licensed ambulatory surgical centers

●  Licensed chemical dependency treatment facility

●  Renal dialysis facilities

●  Birthing centers;

●  Rural health clinics;

●  Federally qualified health centers

●  Freestanding imaging centers;

●  Freestanding emergency medical care facilities*

 

 

Person licensed under state law to practice health or health-related services, or an employee or agent of such a person acting in the scope of their employment.

 

Facilities include:

●  Hospices

●  Hospitals

●  Rural health care facilities

●  Psychiatric hospitals

●  Nursing homes

●  Community mental health center

●  Kidney disease treatment centers

●  Ambulatory diagnostic treatment or surgical facilities

●  Drug and alcohol treatment facilities;

●  Home health agencies.

 

Carriers may not balance bill in the case of emergency services delivered by out-of-state providers.

 

Billing dispute and resolution procedures          
Reimbursement standard For emergency services the greater of:

●  In non-Denver areas:

o   105% of carrier’s median in-network rate for services provided at a similar facility in the same geographic area; or

o   Median in-network rate for the same service at a similar facility in the same geographic area based on all-payer claims database (APCD) data.

●  In the Denver area:

o   Carrier’s median in-network rate for the same service in a similar facility in the same geographic area;

o   250% Medicare rate for the same service in a similar facility in the same geographic area; or

o   Median in-network rate for the same service in a similar facility in the same geographic area based on APCD data.

 

For OON services at an in-network facility, the greater of:

●  110% of carrier’s median in-network rate for the service in the same geographic area; or

●  60th percentile of the in-network rate for the same service in the same geographic area based on APCD data.

 

For facilities:

●  108% of the previously contracted rate if the facility had been in-network within the last 12 months.

 

●  115% of the previously contracted rate if the facility had been in-network within the last 12-24 months.

 

●  If no such contract existed, an amount the carrier determines to be fair and reasonable.

 

For providers:

 

If a provider had been in-network within the past 12 months:

●  The previously contracted rate, if the provider terminated the contract before it was set to expire without cause;

●  108% of the previously contracted rate if the provider terminated the contract for cause;

●  A fair and reasonable amount, determined by the carrier, if the carrier terminated the contract for cause;

●  The previously contracted rate adjusted by the Consumer Price Index, Medical Care Component for the prior year, if neither party terminated the contract.

 

If a provider had not been in-network in the preceding 12 months, carrier may remit whatever payment it determines.

 

A 60th percentile of the allowed commercial reimbursement rate for the service performed by a provider in a similar specialty in the same geographic area.

 

Should not be less than 150% of 2017 Medicare rate.

 

A stakeholder group will convene annually to review the reimbursement rate.

The usual and customary rate or an agreed-to rate, meaning the allowable amount as described by the applicable master benefit plan document or policy.*

 

Commercially reasonable amount based on similar services provided in a similar geographic area.

 

 

 

Process for arbitration Baseball arbitration (arbiter will pick the final payment offer submitted by either the health plan or the provider/facility), if carrier and provider do not agree to initial payment.

 

Arbiter will consider:

●  Provider training, education experience, and specialization

●  Previously contracted rate, if the provider had a contract with the carrier within a year of the dispute

 

Arbiter will either require the provider to accept the payment issued by the carrier as payment in full, or to demand that the carrier remit an additional amount requested by the provider.

 

Mediation may be requested through the Department of Insurance.[7]

 

In the case of mediation of facilities, the mediator shall determine if the amount charged by provider is excessive, and if the amount paid by the insurer is unreasonably low or not the usual and customary rate.

 

In the case of mediation for other providers, the mediator shall take into account whether there is gross disparity between the amount charged by the provider and how much the provider or similarly qualified providers receive for similar services. Other factors may include:*

●  Patient characteristics and complexity of the services

●  Provider training, education experience, and specialization

●  80th percentile of all billed charges for the service

●  50th percentile of rates for the service

●  History of network contracts

 

Baseball arbitration (arbiter will pick the final payment offer submitted by either the health plan or the provider/facility), if carrier and provider do not agree to initial payment.

 

Arbiter may consider:

●  Evidence from the parties to assert the reasonableness of their offer

●  Patient characteristics and complexity of the services

●  Other relevant information include data from the state APCD

Data collection and reporting tools State APCD Benchmarking database maintained by a nonprofit organization specified by the insurance commissioner.

 

Enables the commissioner to require carriers to report:

●  The annual percentage of claims and expenditures paid to OON providers

●  Changes to the percent of claims paid as emergency claims

The insurance commissioner is charged with selecting an organization to maintain a benchmarking database. Requires state APCD to establish a dataset that provider, facilities, and carrier s may use to determine reasonable rates and to resolve payment disputes.

 

Carriers shall provide information concerning the utilization of OON providers and cost savings yielded from the law as part of their annual rate filing.

 

Penalties
Provider must refund excess payments made by consumers

 

[8] [9] [10]
Penalty for violations [11] [12]  ✓[13]* [14]
Transparency standards
Must provide disclosure of potential repercussions of OON services

 

●  Carriers

●  Providers

●  Providers[15] ●  Carriers

●  Providers

Requires cost estimates to consumers

 

[16] [17]
Additional requirements: On carriers:

●  Must arrange for patient transfer within 24 hours of receiving notice that person is stable and can be transferred.

 

On providers:

●  Must send notice to carrier, no later than eight hours after person presents at an OON facility

●  Must send notice to carrier that the beneficiary has stabilized and may be transferred to an in-network facility within 24 hours of stabilization

 

On carriers:

●  Must make claims status information available to providers.

 

On providers:

●  Must post in a publicly accessible manner and online information about which carriers it contracts with.

●  Must notify the carrier of a beneficiary’s admission within a reasonable period after stabilization.

●  Any communication regarding bills, shall clearly state that the beneficiary is responsible only for in-network cost sharing amounts.

On carriers:

●  Explanation of benefits must include information about balance billing protections; the total amount the provider may bill the enrollee under the enrollee’s health benefit plan; and an itemization of cost-sharing included in that total.* [18]

On providers:

●  Facilities must post notice that

o   it may charge a facility fee

o   it may charge rates comparable to a hospital emergency room

o   the facility or a physician at the facility may be OON and bill separately

o   Lists all the carriers it contracts with

●  Facilities must provide patients with a disclosure that:*

o   Lists the facility fees that may result from the visit

o   Lists the carriers the facility is in-network with

o   Lists other cost information such as median facility  fees and observation fees.

●  Prohibits facilities from using logos or language to misrepresent that it might be in an insurers network.

On carriers:

●  Must immediately arrange for an alternate plan of treatment if an agreement on post-stabilization services cannot be reached with the emergency provider.

●  Must update provider directory within 30 days after the addition or termination of a provider.

 

On providers:

●  The provider must contact the carrier within 30 minutes of stabilization before rendering further services.

●  Must post online information about which carriers it contracts with.

●  Must provide carriers with updated lists of non-employed providers working at the facility

*Indicates changes made by the new Texas law.

[1] Texas’ 2019 law amends and enhances already existing protections in the state. Changes made by the new law are noted by asterisk.

[2] Does not apply when: 1) Services are received at a critical access hospital; 2) A person is covered by insurance sold outside of the state; 3) Services provided more than 24 hours after notification has been provided and a person has been stabilized.

[3] In the case of a beneficiary who cannot reasonably access a preferred provider, the protections extend to 1) medical screening and examinations require to determine if a medical emergency exists; 2) necessary emergency services to treat and stabilize; 3) services originating in an emergency facility following stabilization; and 4) supplies related to the services rendered by that facility.

[4] Does not apply if the consumer affirmatively consented to receive OON services.

[5] Only applies when; 1) A participating provider is unavailable; 2) Medically necessary care is unavailable in the beneficiary’s network (determined by the provider in conjunction with the health plan); or 3) the patient did not consent to receive services from the OON provider.

[6] Does not apply in the case of a beneficiary that elects, in writing and in advance,  to receive services from the out-of-network provider, or in the case that the provider does provide the enrollee with a written disclosure that they are out-of-network and provides an estimate of the projected amount the enrollee will be responsible for. Explicitly includes protections for OON services delivered by diagnostic imaging or labs.

[7] Prior law allowed mediation requests only in the case of claims over $500 and that were for either emergency services, or services rendered by a provider or supplier at an in-network facility.

[8] Refund must be issued within 60 days, or interest will accrue.

[9] Refund must be issued within 45 days, or interest will accrue.

[10] Refund must be issued within 30 days, or interest will accrue.

[11] Punished by a fine of not more than one thousand dollars, or by imprisonment in the county jail for not more than one year, or both.

[12] Insurance superintendent may impose a fine on any provider that offers an unlawful rebate or inducement to entice a person to seek OON services

[13] The Attorney General may bring civil action against entities that exhibit a pattern of repeatedly violating billing protections. Authorizes applicable agencies to take action against providers or facilities who violate billing protections. The Secretary of State may suspend or revoke a license, or bring civil action against entities who violate the disclosure requirements outlined under Texas law. The Department of Health may impose penalties up to $1,000 for certain violations.

[14] Authorizes the Department of Health or an appropriate authority to levy fines against providers or facilities who violate these policies. Commissioner may levy a fine against carriers who violate these policies. Repeated violation may constitute unprofessional conduct and risk licensure of a provider or facility.

[15] If an OON provider has advanced notice that the beneficiary is OON, they must notice the beneficiary of their OON status and recommend the beneficiary contact their carrier to discuss options.

[16] A provider must issue a cost estimate within three days if requested by a patient.

[17] Carrier must provide an estimate of out-of-pocket costs for OON services upon request.

[18] Applicable to Health Maintenance Organizations.