As expected, the Office of the Insurance Commissioner (OIC) has submitted legislation (HB 1117) to protect patients from receiving balanced bills. The legislation is aimed at protecting patients who use an in-network hospital but then receive an additional “balance” bill from an out-of-network provider for care during the stay. This typically arises when a health plan has failed to reach a network contract agreement with some of the providers practicing at the facility, such as ER, anesthesiology, pathology, and radiology groups.
WSHA supports protections for patients in emergency situations in which they have no control over who provides their care. In general, we believe the balance billing issue would be best addressed by making sure insurers have robust and adequate networks, so patients can easily receive care with in-network providers. This proposed legislation does not address network adequacy and the specifics in this proposed legislation raise concerns.
WSHA believes the interventions should be limited and targeted in order to preserve the ability of plans, hospitals and providers to negotiate contractual arrangements. This draft legislation is broad. It seems to make the hospital responsible for balance billing situations, since it states that these situations arise when no in-network provider was available for that person, regardless of the situation.
Some states have adopted balance billing legislation limited to ERs or to ERs plus the facility-based providers, such as anesthesiologists, pathologists and radiologists. This draft legislation extends restrictions on balance billing to include surgeons and all other providers that provide care at an in-network facility, regardless of whether a procedure was pre-scheduled or part of a covered benefit. It also makes hospitals but not insurers responsible for notification of patients. It requires hospitals to provide in-network options for all services at the facility or post to the hospital website the names, mailing addresses and phone numbers of all health care providers with whom the facility contracts to provide services at the hospital.
The proposed legislation also sets a process for determining payment for the out-of-network provider in a balance billing situation. Payment is set at the higher of 125 percent of the Medicare rate or the usual contracted rate from the insurer. Medicare rates, however, are far below market rates. In some circumstances, the usual rate also may be low, since some insurers can have contracts with only a small number of certain categories of providers and they can be at below the general market rates. If the law sets a low fall back rate, the insurer would have no incentive to attempt to contract at a higher rate. We are concerned that payment provisions of this bill, if enacted, would impact the overall market and actually reduce the incentive for plans to contract with the providers at in-network hospitals. Click here to read more about the draft in a recent Fiscal Watch article.
WSHA will testify at the House Health Care & Wellness Committee’s public hearing on the issue. If you have input for us, please contact Andrew Busz at (206) 216-2533 or at andrewb@wsha.org.
House Health Care & Wellness: January 18, 1:30 p.m.
