State of the States Update - Out-of-Network/ Balance Billing By Ed Gaines

State of the States Update - Out-of-Network/ Balance Billing

By Ed Gaines, JD, CCP, Chief Compliance Officer in Emergency Medicine.

As of April 2019, 31 states have introduced 78 bills pertaining to out-of-network and balance billing issues, with another 6-7 states expected to enter the fray before the end of 2019. Below are lists of states “in the frying pan,” fighting to save reimbursement and create the best possible outcome in emergency medicine, as well as those states that are “on the menu” and are yet to be of concern now but going forward are trending towards +/- action. And, states that continue to be monitored for developments by ACEP, EDPMA, and PFC are also listed out.

States currently “in the frying pan”

1.Colorado: With three weeks to go in session, Dr. Friedenson and the CO Chapter continue to lobby on two bills: HB 1174, which is currently being amended to be more favorable to EM, and to kill the unfavorable SB 134. Colorado’s new Governor, Jared Polis (D), and the legislature are both eager to take up the OON issue this year. HB 1174 is a Democrat and Republican agreed to bill, currently in the Senate Judiciary Committee where it is expected to be amended to include the median in-network rate for OON, with no rate floor. Sen. Gardner has been working with the coalition to create a provision that would make 300-350% of Medicare or 110% of the 75th percentile of the median allowable, whichever is greater, to become the standard. There has been much confusion and discussion about simply using FAIR Health instead. Senators have also agreed that the bill will only apply to unanticipated OON care. Expect a wild ride between now and sine die on or around May 3rd.

2.Nevada: Much has happened in the last 30 days. Asm. Mike Sprinkle unexpectedly resigned due to sexual harassment claims in mid-March, leaving a gaping hole in the NV Democrats strategy to run their OON legislation through him as he was the Chair of Health in the Assembly. His departure has led to just two, not three bills being introduced. Asm. Ellen Spiegel (D) introduced AB 372 in late March which prohibits insurers from charging more than in-network cost sharing amount for OON, and enhances PLP protections, but has not addressed the standards for disputes when OON issues arise. On the same day, the Asm. Health Committee introduced AB 469, which bans OON/BB and creates a dispute resolution process, which is being negotiated. Interestingly, it requires formerly contracted in-network providers to agree to payment at the rates agreed to under the old contract between the provider and insurer. If the provider was in network more than 12 but no more than 24 months ago, payment would be 115% of the most recent applicable contract. If there has been no contract within the last 24 months, then the payer offers and the provider either accepts or counters. The payer can either accept the counter or they can go to arbitration. Each side gets to strike 2 from a list of 5 arbitrators. There are no stated criteria that the arbitrator must consider in arriving at a decision. There is an ERISA opt in provision which could be troublesome. The bottom line now is that the negotiations for the structure of the arbitration process is the only way NV ACEP and others have been able to influence the process. The result may end up being a percentage of Medicare or the average in-network rate. Lastly, Sen. Joe Hardy (R), who assisted in detonating a 2018 bill that would have tied rates to Medicare, is still planning to introduce a version of the 2017 NCOIL model legislation, which ACEP could support, however since Sen. Hardy is in the minority party, little is expected to happen after his bill is introduced. Legislative session is expected to end in early June.

3.Texas: “If it ain’t broke, don’t fix it”, but Sen. Kelly Hancock (R), who graciously enhanced the mediation provision threshold to $500 during the last legislative session in 2017, introduced negative legislation that would do just that. At first, it appeared that HB 2967, sponsored by Rep. Tom Oliverson (R), would tie rates to the 80th percentile of FH, but then on April 1st in a twist of events, a surprise news conference with Rep Oliverson and Sen. Hancock indicated that the two men had reached a compromise in which the Texas Medical Association was in agreement with. SB 1264 promises to ban OON/BB, institute baseball-style arbitration for providers and insurers, opts in state employee plans, self-funded or not (oh the joy!) and eliminates mediation. This is thought to be a cost-savings measure for the state budget as the governor and legislature originally budgeted for a possible increase in costs for mediation in 2019-20. Legislative session ends around Memorial Day.

4.Washington: HB 1065 and SB 5699 continue to make their way through the legislature, and the fight could last until the end of the year. Both bills have been tweaked recently by the medical society to remove the limit on non-elective services, eliminating hospitals in bordering states having to comply with WA law, claim bundling for the last 2-3 months when going to ADR, and most importantly that values not in the Washington APCD can be used for settling claims, plus Medicare is off the table for now.

States currently “on the menu”

1.Pennsylvania: UPMC and Highmark BCBS are having a messy divorce that now threatens to spill over into a high-profile lawsuit by PA’s AG which could eventually wrap in the OON/BB issue or force PA legislator’s hand on dealing with the issue. This could coincide with legislation to be introduced any time now by Sen. Judy Schwank (R), which could tie charges to Medicare rates as her last bill did. Everyone has been waiting for two months now for the other shoe to drop, but so far, no dice. Part of the problem is the messy divorce PR spilling over into legislative affairs, handcuffing legislators from tackling the OON issue with so many other fires burning.

2.Louisiana: Stakeholders, including EM, were asked to submit their best proposals for dealing with the OON issue by 2/1 to the legislature that established a task force on the issue in 2018. With the submission complete, HB 371 was introduced in the last week of March which establishes an IDR process with reimbursement either tied to Medicare or a standard yet-to-be-defined.

States to monitor

1.Oklahoma: two bills have been introduced that deal with OON/BB, however they are unlikely to pass at this point.

2.Minnesota: New to the list this month, Minnesota has introduced several bills that could be amended to include OON provisions that apply to EM.

3.New Jersey: will legislation be introduced to set an MBS?

4.Oregon: expect negative legislation to be introduced

5.Ohio: PFC is working with a coalition in the Senate to introduce legislation in 2019

6.Alaska: continuation of the fight to save the 80th percentile of FH charges as the standard will likely continue well into 2020

7.Connecticut: Ongoing sneak attacks via the omnibus budgeting process (in which OON legislation gets wrapped up in a bunch of other language ranging from state budgetary items to gun range regulations) will attempt to eliminate FH as the standard and require providers to accept an average of the in-network rate paid.

8.North Carolina: SB 386 has reared its ugly head once again as Sen. Ralph Hise (R) has taken a third chance at passage. His colleagues however state that it’s probably all for naught.

States that are finished

1.Virginia: The 2019 session has ended with 10 bills in a short 45-day session, along with a crisis in the governor’s mansion has both helped and hurt physician coalition efforts. The bills we all hoped would pass failed. HB 1714and SB 1763. PFC and VA ACEP removed language in the bill that passed the legislature to fund the government for 2019-20 that would essentially benefit insurers by setting a benchmark of Medicare for OON disputes. The governor struck this portion of the budget bill and instead recommended an expanded working group to explore a variety of MBS options before next legislative session begins in January 2020. Remember, the Republican-led legislature will need to agree with a Democratic governor, so compromise, education, and constant advocacy in 2019 will be key.

2.Georgia: Sadly, for a third consecutive year, the physician coalition was not able to see the passage of our bills, SB 56 or HB 677. Rep. Richard Smith, Chair of the Insurance Committee in the House helped torpedo efforts as well as insurer efforts to make last minute changes so the bills could not be reconciled in time to prevent them from not passing before the end of session.

3.New Mexico: The Dept. of Insurance filed two bills aiming to limit OON balance billing by setting reimbursement at the median amount of any commercial in-network rate paid, UCR at the 60th percentile of FH allowable, or 150% of Medicare, whichever is greater. Session ended in mid-March. HB 207/SB337: sponsored by Democrats with a push from the Dept. of Insurance, these bills aim to do what was stated above, plus ban OON/BB. They are not favorable to EM. A third bill, SB 346 was slightly more positive and agreed upon by the coalition but ultimately was amended to not include a favorable provision to pay the greatest of the 60th percentile of FH allowable amounts, as some specialties would be paid less than 100% of Medicare. The resulting upheaval and dismay is causing a noticeable rift, but SB 337 did pass and was signed by the governor on April 3rd.

4.Kentucky: reintroduced SB 24 and HB 138 from 2018 that is a modified version of the PFC “skinny bill”, however the legislature has adjourned for 2019.

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