States increasingly pass laws to protect patients from surprise billing, varying widely in scoop. Surprise bills occur when a patient is treated by an out-of-network provider and receives a bill from the provider for the difference between the payment made by the health plan and the patient's cost-sharing amount. Typical scenarios are when a patient accesses emergency services outside the health plan's network or receives services at an in-network hospital from an out-of-network physician (e.g., anesthesiologist, radiologist, pathologist). Despite state legislative activity, state protections are limited by the Employee Retirement Income Security Act of 1974 and do not apply to self-funded employee welfare benefit plans. According to the Kaiser Family Foundation, approximately 60 percent of workers get coverage through a self-funded health plan. Because these state-level protections vary widely in scope and do not apply to patients in self-funded health plans, federal legislation may provide an opportunity to more comprehensively address surprise billing.
At the time of writing, the 116th Congress released two proposals to address surprise billing, one by Representative Lloyd Doggett (D-TX) and another by Senator Jeanne Shaheen (D-NH). The bill from Representative Doggett (H.R.861) would require a hospital to notify patients, who have health benefits coverage (group, individual market, and federal government program) and are seeking services, whether the hospital and any of the providers furnishing services to the patient at the hospital are out-of-network. If so, the hospital would also be required to provide notice as to the estimated out-of-pocket costs of the services to the patient (in excess of any cost-sharing amounts the patient would have been required to pay if the services had been furnished by an in-network provider). The hospital would be required to document, at least 24 hours prior to providing the services, that the patient has been provided with the required notice and consents to be furnished with the services and be charged an amount approximate to the estimate provided. Without the required notice and the patient's consent, or if the patient is seeking same-day emergency services, the hospital may not charge the patient more than the patient would have been required to pay if the services had been furnished by an in-network provider.
The bill from Senator Shaheen (S.967) would cap the rates that hospitals, physicians and other providers (collectively "health care provider) can charge uninsured and out-of-network patients with individual market coverage ("out-of-network patients"). In the absence of a state policy, the cap would default to 125 percent of the Medicare fee-for-service rate. Otherwise, with respect to uninsured patients, the health care provider may charge the patient no more than the lower of either 125 percent of the Medicare fee-for-service rate or 80 percent of usual, customary, and reasonable charge rates ("UCR"), or the rate otherwise allowed to be charged under applicable state law. In the case of out-of-network patients without out-of-network benefits, the rates the health care provider may charge the patient would be capped at either 125 percent of the Medicare fee-for-service rate, 80 percent of UCR, or 100 percent of the average in-network rate (collectively "state rate"). With respect to out-of-network patients with out-of-network benefits, the health care provider may charge the patient no more than the state rate, minus the sum of the payment made by the health plan and the patient's cost-sharing amount.
Like the state-level protections, the federal proposals vary widely in scope and would not appear to apply to patients in self-funded health plans. As proposals continue to be released, it will be important to monitor whether, and if so, how bills ultimately will more comprehensively address surprise billing.
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