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State Legislators Take Action to Protect Consumers from Surprise Billing
Consumer out-of-pocket spending on health care costs, including “surprise” medical bills – often incurred for costly, out-of-network care — is on the rise and state lawmakers are responding with legislation to protect consumers.
Surprise bills happen when consumers receive unexpected charges for medical care that they assumed would be comprehensively covered by their insurance plans. This often occurs when consumers unknowingly receive services from providers or facilities that are not covered within their insurance network, such as a specialist who contracts to work in a hospital, but does not participate in that hospital’s network.
Surprise bills can leave consumers on the hook for up to thousands of dollars in unexpected medical costs. This issue is pervasive throughout the health care system and affects consumers regardless of whether they are covered through individual insurance markets, such as an Affordable Care Act marketplace, or their employer. (For background on surprise billing, read NASHP’s report Answering the Thousand-Dollar Debt Question.)
Generally, state laws that address surprise billing fall into four categories:
- Laws that cap or limit charges for services that are delivered out-of-network, especially for emergency care;
- Laws designed to improve cost transparency in service costs and/or provider networks;
- Laws that set up an arbitration process to resolve surprise bills that focus on achieving a resolution between providers and insurers without burdening consumers); and
- State investments in committees to study the impact of surprise billing on state consumers.
Several states took action during the 2018 legislative session to address surprise billing, ranging from New Jersey, whose new law captures most of the above strategies, to California, New Hampshire, and New York, which passed laws to restrict “balance billing” (when providers charge patients for the difference between for what they charge and the insurer’s allowed amount.)
Below is a summary of new state laws designed to protect consumers from surprise bills.
- California AB 2593: California took aggressive action in 2017 to curb surprise billing in the state and its newest law adds to those protections by prohibiting air ambulance providers from charging consumers more than in-network costs, even if the consumer receives services from an out-of-network air ambulance provider. (It is currently awaiting governor’s signature)
- Missouri SB 982: The law requires insurers to pay providers for all emergency services “necessary to screen and stabilize an enrollee” and any additional services authorized by the insurer. Consumers cannot be held liable for cost-sharing for these services, beyond what is allowed under their insurance plans, even if the provider is out-of-network. The law also outlines a specific process for arbitration between insurers and providers to settle costs owed in cases where out-of-network care is provided to consumers.
- New Hampshire HB 1809: This law prohibits specific providers (those performing anesthesiology, radiology, emergency medicine, or pathology services) from balance billing a consumer for services in cases where the provider is out of the consumer’s network but delivers services at a hospital or ambulatory surgical center that is in the consumer’s network. New Hampshire also passed a law to establish a committee to study the balance billing practices of ambulance providers in the state. A report on the committee’s findings is due Nov. 1, 2018.
- New Jersey Chapter 32: This is of the most comprehensive surprise billing laws drafted to date. It requires:
- Health care facilities to provide clear and public information regarding the insurance plans it contracts with, the network status of providers who provide services in that facility, and the costs of services in that facility;
- Providers to share information about the insurance plans they participate in and the health care facilities they are affiliated with;
- Insurers to update and maintain accurate information about their provider networks; and
- Insurers to provide consumers with clear information regarding out-of-network health care benefits.
The law also prohibits out-of-network balance billing in the case of emergency services and sets up a process of arbitration for insurers and providers to resolve billing disputes. Notably, the law includes provisions that attempt to guarantee similar protections for consumers covered by self-insured plans, over which the state has limited authority.
- New York Chapter 57: The state’s Health and Mental Hygiene Budget includes a provision to protect survivors of sexual assault from being balance billed by a hospital, a sexual assault examiner, or a licensed health care provider.
- Oregon Chapter 43: By July 2020, Oregon’s Department of Consumer and Business Services will provide a report to the state legislature on all consumer complaints received by the state related to out-of-network providers working at in-network facilities.
Other states have actively considered bills to outlaw surprise bills and additional legislation is expected during the 2019 legislative sessions. The National Academy for State Health Policy (NASHP) will continue to monitor these bills and other efforts to address surprise billing.
On the federal level, in mid-September a group of nonpartisan US senators unveiled a draft bill that also tackles surprise billing. It adds a cap on out-of-network billing rates, prohibits surprise billing in emergency situations, and requires patients to receive notice before they receive out-of-network medical care.
An Oregon State Lawmaker Crafts a Winning Strategy for Transparency Legislation
Oregon State Rep. Rob Nosse
Last week, Oregon Gov. Kate Brown signed a drug cost transparency bill into law that requires drug makers to report the reasons behind dramatic drug price increases. The bill’s leading advocate and architect, state Rep. Robert Nosse, D-Portland, worked for nearly three years to create a prescription cost containment bill that would win bipartisan support with its pricing transparency approach.
Last year, Nosse tried unsuccessfully to pass a more aggressive bill that included mandated rebates and caps on consumer drug copays. This year’s successful campaign, which included careful coalition-building and scaled back aspirations, suggests a new playbook for state lawmakers aspiring to pass drug cost legislation.
NASHP interviewed Nosse, who also works as a labor organizer for a nurse’s union, to find out more about his drug legislation strategy.
Were you always interested in health care?
Because I worked with the nurses’ union, which is very politically active in Oregon, my answer to that would of course be yes. The union has worked on staffing issues, public health, hospital finance, the Affordable Care Act, and Medicaid. I came to the issue of prescription drug costs in 2015, during my first term. I worked on a couple of bills on prescription copays and neither passed. However, the chair of the House Health Care Committee asked me to run an informal, workshop among lawmakers and stakeholders in the health care policy arena to explore ways to lower drug prices. Although the work group was technically informal, it was staffed and included a variety of stakeholders from the insurance industry, consumer groups, patient groups, and of course the pharmaceutical industry. We met for 18 months and I learned a lot. For example, even though I had been around health care and health insurance, I didn’t know what a pharmacy benefit manager was.
[The work group was not able to reach a consensus, but Nosse proposed aggressive legislation (HB 2387) to tackle high drug costs. It included a transparency provision – requiring drug makers to justify big cost increases – and it mandated that rebates be paid to insurance plans if drug manufacturers charged too much and it proposed copay caps on insurance plans so consumers would never have to pay large out-of-pocket expenses for drugs.]
What did you learn from that failure?
It was an aggressive bill, it was not a consensus product, and it did not end up passing for a lot of reasons. I learned a lot from that experience — running that work group and trying to pass that bill.
| Oregon’s New Transparency Law: Creates a program, funded by fees imposed on drug manufacturers, under the state’s Department of Consumer and Business Services (DCBS) to monitor prescription drug price increases. Starting July 1, 2019, if the cost of a drug costing $100 or more for a 30-day supply increases more than 10 percent in one year, the manufacturer must report on:
DCBS can impose a penalty if manufacturers fail to provide this information report, or are found to have deliberately omitted relevant information. |
How did you regroup and prepare for your 2018 legislative session?
I and other supporters wanted to keep this effort alive. We have a short session of 35 days and we decided to try to pass just the transparency part from our 2017 bill. It doesn’t require drug manufacturers to spend significant money or change their business model radically. It’s the easiest part in that all it does is ask drug manufacturers to explain their price increase. Of course, I wanted to do more, but this is a first step and could be done in a short session.
Our coalition supporting the bill in Oregon became more hopeful when California passed its transparency bill last fall. We debated among ourselves whether to take the California bill and propose it [verbatim] here, but we decided to stick with our own approach to transparency that we had introduced the previous year.
To pass the bill here in Oregon [and get other lawmakers and policymakers on board] I also had to agree to another, more formal work group. This work group is tasked with looking at other opportunities for transparency and examining other parts of the drug price chain, including pharmacy benefit managers, pharmacies and health plans, to see if we can find other places where costs are added on to the price of drugs and if there are points of regulation we can consider.
What kind of opposition did the bill encounter?
Pharmaceutical manufacturers and the biotech industry opposed it. They got some patient advocacy groups to say this bill would stifle research, but they didn’t have a lot of credibility. Last year, a local television station compiled a list of 100 drugs that have increased in price more than 70 percent or greater between 2012 to 2016. It showed how the antibiotic tetracycline, a generic, increased from 7 cents a dose to $8.54 a dose, which is a 12,000 percent increase, and Humira, which is a brand-name drug used to treat arthritis, increased from $1,006 to $1,990 a dose, which is a 98 percent increase. I think that information really helped. It shows how the tide is turning, everyone knows how ridiculous these price increases are.
Who were your allies?
Our biggest ally was the insurance industry, which is also struggling to pay drug costs. [The law asks insurance companies to report their most frequently prescribed and costly drugs, including those whose prices have increased dramatically. The law requires them to detail the impact of these costs on insurance premium rates.]
We also had the labor unions and hospitals supporting the bill, as well as various consumer groups, including AARP. One of my strokes of good luck was gaining the support of a very conservative Republican state senator who has struggled all his life with diabetes and has experienced this problem first-hand. He is normally a very strong free-market kind of person, but he knows from experience that something is wrong with the so called free-market when it comes to drug prices. His support really helped my efforts especially in Oregon’s state Senate where the Democratic majority is more narrow.
What advice would you give to lawmakers in other states who are interested in proposing similar legislation?
You need a broad-based advocacy community behind you to overcome pharmaceutical industry opposition. You need a group of legislators who want it to pass, and partners in the health care, labor, consumer, and insurance sectors. It took me three years to get this passed. Also, be prepared for arguments that a transparency bill will reduce the supply of certain drugs in your state, or will frustrate future drug research. These arguments never took hold in Oregon, but you need to be prepared for them.
What is your next step to reduce drug costs in Oregon?
I know drug transparency is just the first step, and probably the easiest to legislate. I am interested in the rate-setting and drug importation legislative models that NASHP has developed. But right now, we need to study them through the committee and issue a formal report with recommendations.
December Is the Most Critical Month Yet for States’ CHIP Funding
Congressional inaction in funding the Children’s Health Insurance Program (CHIP) has put states – and the children and families CHIP covers– in a cliffhanger scenario. While there have been encouraging legislative steps taken to extend the program, the bill currently appears to be stalled. With the help of temporary, reallocated CHIP funding, states are continuing to support their programs, but these funds are running out. As a result, a growing number of state officials expect they will have to notify families that their children’s coverage is in jeopardy by as early as this month.
To date, 17 states, including Washington, DC, (AZ, CA, CO, DC, DE, FL, HI, ID, MA, MN, MT, NV, OH, OR, PA, UT, and WA) have received redistribution grants from the Centers for Medicare & Medicaid Services (CMS) to continue their programs. Another nine states (AL, AK, CT, GA, KS, KY, NY, VA, and VT) are also expected to receive redistribution grants in the coming days and weeks.
As detailed in a previous NASHP blog, states are eligible to receive redistribution dollars only after spending their available federal fiscal year (FFY) 2017 carryover CHIP funds. The redistribution funds are available as a last resort and nearly $1.2 billion of the total available $2.9 billion has been reallocated to enable states to continue their CHIP programs. In December, Minnesota will be the first state to exhaust all of its federal CHIP funds, including its redistribution grant , and it’s possible that Oregon and Arizona could.do the same.
| Ultimately, timing for notifying families that their children’s coverage could end depends on how long a state can continue its CHIP program while also giving families adequate time to prepare. Unfortunately, right now some states don’t have much time. |
Many states using redistribution grants to fund their separate CHIP programs are watching Congressional activity closely, hoping federal CHIP funding will be extended as part of the continuing resolution (CR) that must pass by Friday, Dec. 8, 2017, to keep the federal government operating. However, reports suggest there will be two CRs – the first by Dec. 8th to ensure the federal government is operational in the short term and another in the coming weeks that will fund the government for a longer term. Congress is most likely to consider adding CHIP funding to the later one. With continued CHIP funding uncertainty, it remains unclear if states can and will put their plans to notify families that their children’s coverage could end on hold until after Congress acts on the second CR. For example, both Colorado and Oklahoma have already sent informational notices to families; Virginia and Connecticut plan to send notices in early to mid-December. Ultimately, timing for notifying families depends on how long a state can continue its CHIP program while also giving families adequate time to prepare — and unfortunately some states don’t have much time.
On Dec. 1, 2017, U. S. Reps. Ryan Costello (R-PA) and Tom Emmer (R-MN) introduced a bill to be included in the Dec. 8 CR that gives CMS greater flexibility to allocate redistribution funding to states that will experience a CHIP shortfall this month. The bill would waive a proration rule in the current statutory formula that dictates the portion of redistribution funds CMS allocates to ensure all states receive some of these funds. If it passes, states that exhaust all of their federal CHIP dollars in December 2017, including those that have already received and used the entirety of their redistribution portion, could receive an additional payment.
It is expected that only Minnesota (and perhaps Oregon and Arizona) will run out of all of their funds in December and would be eligible to receive this additional payment. While the additional redistribution payment will be limited and relatively small, there will be less funds available for other states that are also running out of federal funds in future months. As a result, the urgency for Congress to appropriate new federal CHIP funds for all states remains critical, even with this short-term solution. Even if this short-term fix passes, with a growing number of states expected to exhaust their CHIP funds by the end of January, it does not guarantee there will be no notices going out to families this month.
| Alabama’s notification contingency timeline for its separate CHIP program: Late December 2017: Send informational notice to families to alert them that coverage may end in February, 2018 January 2018: Freeze enrollment February 2018: Disenroll children from CHIP * Alabama expects to exhaust all federal CHIP funds in February, 2017, but needs to initiate notification in December 2017. |
Throughout its 20 years, CHIP has enjoyed strong bipartisan support and states, Congress and CMS have enjoyed a productive partnership, sharing the common goal of serving the nation’s children. The House has passed a bill to continue the program for five years and while funding remains a stumbling block, states hope Congress will again find a bipartisan path forward to continue health coverage uninterrupted to the 9 million children who rely on their action.
States Share Innovative Approaches to Improve Population Health through Accountable Health Models
More than 200 state health officials crowded into a National Academy for State Health Policy’s (NASHP) annual conference session recently to learn about strategies to improve population health and reduce costs while simultaneously transforming their state’s health care finance and delivery models.
An Accountable Community for Health (ACH) is:
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They came to hear representatives from California, Michigan, Oregon, and Washington State discuss their approaches to building population health priorities into their health system transformations through “accountable health” organizations. These entities invest in population health improvement through Accountable Communities for Health (ACHs) and care delivery structures that are accountable for population health, such as Accountable Care Organizations and Coordinated Care Organizations (CCO).
During the standing-room-only session, the four state presenters described their unique models, including financing and measurement strategies and relationships to broader health system transformation. Officials shared examples of how these new delivery models invest in social determinants of health to increase health and well-being and control costs. Examples include:
- Several of California’s Accountable Communities for Health have chosen to focus on reducing violence and trauma as a priority. One conference participant observed, “It doesn’t matter how many times people who are victims of domestic violence see a doctor, it won’t improve their health until the violence stops.”
- Michigan’s Community Health Innovation Regions identified the intersection of housing, homelessness, and health as a priority area. Its goal is to strengthen collaboration between health and housing agencies and develop solutions for Medicaid beneficiaries whose housing needs put their health at risk.
- Oregon CCOs’ global budgets give them flexibility to provide non-medical services that result in better health and lower costs, such as supporting home improvements and rental assistance, embedding mental health professionals in school systems, and promoting gym memberships.
- Washington state’s Accountable Communities of Health are addressing the opioid use public health crisis.
During the conference, NASHP also facilitated a half-day convening of state policymakers from 10 states, across departments and agencies, to advance state accountable health models. During the session, state officials discussed models, shared strategies, and identified multi-sectoral funding to support their focus on population health, health disparities, and social determinants of health. This cross-sector convening included officials from Medicaid and public health agencies and state health transformation offices, along with some key partners.
NASHP will continue to convene meetings, analyze, and report on the evolution of these state models, and build on previous analysis of State Levers to Advance Accountable Communities for Health, to help states advance these transformational efforts. Stay tuned for an upcoming cross-state comparison chart and accompanying issue brief that share lessons and themes related to accountable health models gathered during the NASHP annual conference.
For more information about NASHP’s work on state accountable health models, e-mail NASHP Senior Program Director Jill Rosenthal at jrosenthal@nashp.org.
Care Coordination under the Medicaid Benefit for Children and Adolescents
Tuesday, September 9, 2014
3:00 – 4:00 pm ET
View Webinar Here
Care coordination provides a bridge across multiple systems that serve children and families, helping to ensure that a child receives additional screening, diagnosis and/or treatment as recommended by a health care practitioner. Care coordination strategies can help link providers and care settings by facilitating the arrangement of: appointments, referral forms, transportation, reminders and follow-up, and feedback reporting. This NASHP webinar provides a federal perspective from the Centers for Medicare & Medicaid Services on opportunities and promising strategies for states to coordinate care for children and adolescents enrolled in Medicaid.
The webinar is followed by a conversation with presenters from North Carolina and Oregon about strategies those states are using to bridge multiple systems for Medicaid–enrolled children. These states discuss building on patient-centered medical home infrastructure to coordinate care for children, facilitating data sharing across providers and measuring outcomes, and emerging issues that will impact new care coordination models. This webinar is the fifth and final in a series on the Medicaid benefit for children and adolescents (also known as EPSDT). In conjunction with this webinar series, NASHP launched a Resource Map to disseminate state-specific resources and information about strategies that state policymakers and Medicaid officials can use to deliver the Medicaid benefit for children and adolescents.
Speakers
- Rosemary Feild, Insurance Specialist, Division of Quality, Evaluation & Health Outcomes, CMCS, CMS
- Dana Hargunani, Child Health Director, Oregon Health Authority
- Chris Collins, Director, Office of Rural Health and Community Care, North Carolina Department of Health and Human Services
Shared Resources to Sustain Primary Care Transformation
Primary care practices transitioning to enhanced models of primary care require ongoing support to sustain their transformation efforts. Small and medium-sized practices in particular can benefit from shared resources facilitating care coordination and case management, use of data and technology, and ongoing practice improvement. This State Health Policy Briefing outlines key elements of a shared infrastructure to sustain primary care transformation, identifies policy levers available to federal and state policymakers to support these elements, and highlights relevant initiatives at both levels of government. It also summarizes key areas for policy improvement identified during a meeting of federal and state officials convened by NASHP.
June 2014
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Creating the Perfect Storm for Community-Based Prevention
by Jill Rosenthal and Manel Kappagoda of ChangeLab Solutions
April 2014
The United States ranked 15th among affluent countries in life expectancy in 1980. By 2009, it had dropped to 27th place. Our fragmented health care delivery and public health systems, and the lack of coordination between the two, has resulted in an imbalance of high health spending and poor health outcomes.
A recent report by the Robert Wood Johnson Foundation’s Commission to Build a Healthier America, confirms what we already know: dramatically changing these statistics requires a combined approach that comprises investment in health care delivery and expanding “our focus to address how to stay healthy in the first place.”
Read more
