As discussed in our December 13, 2019 blog post on Surprise Billing, states have taken the lead on protecting patients against surprise bills, as the numerous pending bills before the House on the issue have stalled. Now in 2020, two new state surprise billing laws in Texas and the State of Washington have gone into effect, while Congress is trying anew to make something happen on the federal level.
As a refresher, surprise billing, also known as "balance billing," occurs when a patient inadvertently goes out of his or her insurer's network, resulting in a sizeable "surprise bill" – often times when the patient had no choice in the matter.
At the state level, both the Texas and Washington laws became effective January 1, 2020. The Texas law, Senate Bill 1264, was lauded by consumer advocates upon enactment as providing some of the most comprehensive protections against surprise billing in the nation, although it only applies to state-regulated health plans (self-funded plans may opt in). The bipartisan law is intended to prevent consumers from receiving surprise medical bills in situations when they do not have a choice over who provides their care. The law takes the arbitration approach discussed in the December blog post, in a state-supervised process for payors and providers to negotiate fair prices for out-of-network care without involving patients. The legislation requires health plans to pay reasonable or agreed-upon amounts to out-of-network emergency care and facility-based providers, and allows providers to dispute payment amounts through the existing Texas Department of Insurance mediation program. The fate of the law was initially challenged in December of last year, when the Texas Medical Board, originally granted rulemaking authority under the statute, attempted to enact rules that would create a blanket exception to the law for nearly all non-emergency cases. Met with public and industry backlash, the Medical Board relinquished its authority to the Texas Department of Insurance, which enacted regulations consistent with the consumer protection goals of the statute.
In the State of Washington, the Balance Billing Prevention Act applies only to patients enrolled in Washington state-regulated health plans, although, again, self-funded group plans may opt in, comparable to the Texas law. The Act includes both an arbitration aspect, like Texas, creating a dispute resolution process for payment of out-of-network services, as well as a benchmarking approach, prohibiting non-contracted providers from billing protected members above the in-network cost sharing amount. As is popular with these types of laws, the Act requires health plans to keep updated network information on their websites. However, the Act also applies to situations when patients are taken to bordering states in emergency situations – not something we have seen in other states.
At the federal level, two new bills have recently been introduced—the Consumer Protections Against Surprise Medical Bills Act of 2020 and the Ban Surprise Billing Act. The Consumer Protections Against Surprise Medical Bills Act would protect patients from surprise bills with both arbitration and benchmarking approaches – the law would create a two-step process to resolve disputes between payors and providers, and would prohibit providers from charging patients more than the in-network cost-sharing amount. The bill also includes transparency provisions. The bill would require patients to receive from insurers an "Advance Explanation of Benefits," described as "a true and honest cost estimate" for which providers will deliver treatment, the cost of the services, and provider network status. For non-insured patients, providers would be required to share cost estimates directly with patients before a procedure, and mediate any charges that deviate from the initial estimate.
The Ban Surprise Billing Act similarly limits cost-sharing to in-network rates and protects patients from surprise bills. It also includes transparency provisions, such as requiring updated and accurate provider directories and information regarding cost-sharing. The Ban Surprise Billing Act also establishes a process for dispute resolution; however, the approach is different. While the Consumer Protections Against Surprise Medical Bills Act would not set a minimum dollar threshold in the dispute process, the Ban Surprise Billing Act would rely on a median in-network rate to resolve out-of-network payments less than or equal to $750. For amounts paid above $750 (or $25,000 for air ambulance services), the legislation allows for an independent dispute resolution process to determine the final payment.
While states continue to see success in enacting protections against surprise bills, only time will tell whether these two House bills will meet a similar fate as the rest of the federal legislation on the issue.
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