Balance billing legislation places burden on hospitals 

March 17, 2017

HB 2114 (originally HB 1117) is aimed at protecting patients who use an in-network hospital or ambulatory surgery center, but then receive an additional “balance” bill from an out-of-network provider for care during their stay.

WSHA supports protections for patients in emergency situations in which they have no control over who provides their care. However, the bill as currently drafted creates significant administrative burden, cost and liability for hospitals. It places non-workable requirements on hospitals to have the patient treated by in-network providersplacing the burden of network adequacy on the hospital rather than on the plans and the Office of the Insurance Commissioner. Hospitals will be required to absorb unpaid claims for patients with out-of-network emergency room bills, and saddled with non-functional administrative burdens.

Specifically,HB 2114 bans balance billing by providers and facilities for emergency services. It also bans balance billing for non-emergency services at an in-network facility for surgical, anesthesia, pathology, radiology, laboratory or hospitalist services. Since it also bans balance billing from ERISA plans, it encourages these plans to limit their contracting with little exposure for their enrollees. The arbitration process to resolve payments for out of network bills between the hospital and providers and the plans is also cumbersome. The notification provisions for patients are extremely complex as well.

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.Rather than taking steps to ensure this, the bill inserts hospitals into the mix for things it does not or cannot legally control.

HB 2114 will be heard before the Senate Health Care Committee, likely the week of March 27. WSHA will be presenting our strong concerns with the transparency requirements. (Andrew Busz)

Additional information about the bill:


This bill makes hospitals responsible for notifying patients of the contracted status for all contracted providers who treat patients at the facility. Hospitals must notify patients at least 10 days prior to scheduled procedures to alert them to the possibility of balance bills. This provision is extremely problematic for many reasons.

  • Many procedures are scheduled fewer than 10 days prior to the service, making it impossible for hospitals to meet this requirement.
  • The notice requirements change depending on whether more than 75% of the non-employed contracted physicians for each type of surgical and ancillary service provided at the hospital were also contracted with the patient’s plan during the prior three months. This will be difficult for the hospital to determine and the notice requirements are confusing and cannot be accommodated
    • If the 75% threshold has been met, the notice must tell the patient that he/she may request the facility provide only in-network providers.
      • This assumes the hospital can arrange care to be performed by a provider who is in-network with the patient’s plan. In many cases the plan is not contracted with any providers that perform certain specialties at the hospital. Also, hospitals do not control the schedules of non-employed groups and cannot guarantee availability of a specific provider. Even more problematic, hospitals are limited in their ability to refer services among non-employed providers without violating Stark laws.
    • If the 75% threshold is not met, the notice must advise the patient he/she can receive services at an in-network facility and that the patient may be responsible for additional cost sharing at the current facility.
    • For all notifications, the hospital must provide the patient an estimated range of the cost of services. This is a very difficult estimate for the hospital to produce for that patient and plan, particularly when the service is performed and billed by an independent physician group.

Website Posting

Under the bill, hospitals must also 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. As drafted this may be problematic:

  • While hospitals have indicated they may be able to do this for some of the groups such as radiology and anesthesia, the addition of surgery groups makes this much more extensive.
  • It is unclear what value such information would have, since the bill protects the patient from balance billing when provided by an out-of-network provider at an in-network contracted facility.


The bill also sets up an arbitration process to resolve disputes between the providers or the facilities and the plans when out of network care is provided. We believe a robust arbitration process is critical to ensure fair resolution of disputed payment amounts. As drafted, however, we think there are a number of problems with the proposed process:

  • The bill does not allow consolidation of claims involving the same plan and provider. This greatly increases the cost in time and money for hospitals and providers disputing the initial out-of-network payment by the health plan. Consolidation of all disputed claims between the plan and provider would reduce some of the burden and may help establish a payment rate that can be agreed upon by the parties for a contractual agreement.
  • The review criteria for the arbitration is inappropriately limited. It focuses on the plan’s normal payment rate and excludes consideration of what rates are being received by the provider or facility from other carriers for like products. This favors health plans that do not negotiate in good faith and offer less than market rates.


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