Recently, a bipartisan group of senators led by Sen. Bill Cassidy, R-LA, drafted a bill for the 2019 U.S. Congress legislative session that targets surprise billing (also called balance billing), or the occurrence of patients receiving separate and often exorbitant bills from out-of-network physicians who were involved in the patient’s care at in-network facilities. These bills have sparked outrage among consumers and illuminate the disconnect between patients and providers characteristic of our transforming (albeit slowly) U.S. healthcare system.

Consumer desire for transparency has helped spark the popularity of telemedicine and walk-in clinics, while insurers are increasingly motivated to partner with integrated delivery networks to develop narrow networks. The legislation drafted by senators Cassidy; Michael Bennet, D-CO; Chuck Grassley, R-IA; Tom Carper, D-DE; Todd Young, R-IN; and Claire McCaskill, D-MO, addresses the desire for increased transparency to protect patient pockets.

The legislation includes four major components:

  • Patients would only be required to pay the cost-sharing amount required by their health plan if the patients receive emergency services provided by out-of-network providers at out-of-network facilities.
  • Patients requiring additional services after emergency stabilization at an out-of-network facility would be notified of the potential for higher cost-sharing than if they relocated to an in-network facility.
  • Health insurers would be required to reimburse out-of-network providers for non-emergency services performed at in-network facilities. If implemented, this likely would cause insurers to increase premiums.
  • The secretary of Health and Human Services would be instructed to issue a public report that includes recommendations to Congress regarding the bill’s impact on issues like insurance premiums, emergency room utilization, and access to new drugs.

Several states have acted independently to introduce bills and enact laws related to surprise billing. Below is a snapshot of recent balance billing legislation nationwide:

  • Georgia: SB 359, introduced in 2018 but did not pass. Would have required insurers to treat out-of-network emergency care as if it were in-network by applying a consumer’s cost-sharing toward their in-network deductible and out-of-pocket maximum.
  • New Hampshire: HB 1809, signed by the governor in July 2018. Prohibits balance billing in the commercial insurance market for certain services provided by out-of-network providers at an in-network facility.
  • Maine: HB 1073, enacted January 2018. Restricts out-of-network providers from billing patients beyond in-network cost-sharing amounts if that patient sought services at an in-network facility.
  • New Jersey: NJ A2039, enacted August 2018. Restricts the amount a provider may charge for out-of-network services administered on an emergency or urgent basis.
  • Texas: SB 507, enacted September 2017, expands the state insurance department’s mediation system for consumers caught in balance billing disputes to include all types of out-of-network providers at in-network hospitals and facilities, including freestanding ERs.
  • Arizona: SB 1441, takes effect December 2018. Allows patients with surprise bills exceeding $1,000 to seek mediation with the state insurance department.
  • Oregon: HB 2339, enacted March 2018. Prohibits healthcare providers from charging patients out-of-network rates at in-network facilities.
  • Washington: HB 2114, introduced in 2017 and re-introduced in 2018 but did not pass. Would have protected consumers from out-of-network charges at in-network facilities.
  • Virginia: HB 1584, effective January 2019. Prohibits out-of-network providers from charging excess fees to patients who receive ancillary services (like lab services) as a result of healthcare services received at an in-network provider.
  • Pennsylvania: HB 1553, introduced in 2017 and re-introduced in 2018 but did not advance. Would have protected consumers against surprise balance bills for emergencies or other covered health services sought at in-network facilities.

Balance billing will remain a controversial issue as network disputes between health systems and insurers increase. Earlier this year, for example, Tennessee’s largest insurer, BlueCross BlueShield of Tennessee, ended an agreement that allowed HCA TriStar hospitals—the largest provider in Nashville—to provide emergency care at in-network rates. In turn, HCA started balance billing BlueCross members for out-of-network care at TriStar facilities.

With the upcoming expiration of the individual mandate and the increased likelihood that lower-income, non-Medicaid eligible patients will forgo health insurance or turn to minimal coverage with narrow networks, we expect balance billing issues to take center stage in 2019 and beyond.

 

Michelle La Vone Richardson is a Market Analyst at DRG whose work appears in Health Plan Analysis and Market Overviews. Follow her @mlavoneDRG on Twitter for #retailclinic and #convenientcare updates

 

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