Now, even as the battle over repealing and replacing the Affordable Care Act rages on in Washington, other states have followed New York’s lead, enacting or considering proposals addressing unexpectedly large bills that patients receive from providers who are outside their health insurer’s network, often at in-network hospitals.
Nearly a third of privately insured Americans had received a surprise medical bill within the past two years, according to a 2015 Consumers Union poll. In 2014, the New York state Department of Financial Services named it a top complaint from consumers.
Arizona, California, Connecticut, Florida, Minnesota, Texas and Utah are some of the states besides New York that recently have passed legislation attempting to limit “surprise” medical bills. The trend requires health care providers and institutions to stay abreast of any changes in state laws and to regularly consult with counsel to determine whether they are meeting existing requirements, said Seth Bills, an associate attorney at Rogaliner Law Firm, a boutique health law firm in Dallas.
Although they vary from one state to another, the measures generally include three basic features, Bills said. They are:
A requirement that health care providers disclose up front that the patient will incur an out-of-network fee and an estimated cost for the service;
A framework for alternative dispute resolution between the patient and the physician or between the insurer and the physician; and
Limits on the amount an out-of-network provider may collect from a patient.
New York’s comprehensive law, the first of its kind, requires out-of-network providers to negotiate unexpected payments with the insurer, leaving the patient out of the process, Bills said. “Taking the sting out of the surprise aspect is the most effective way to handle consumer complaints,” he said.
New York’s law also effectively treats every provider whom a patient sees in an in-network facility as an in-network provider, limiting the patient’s cost-sharing amounts to only those mandated by his or her health plan.
Residents of San Antonio can ask for mediation when they receive large out-of-network bills. (Photo: Allison Bell/TA)
Florida’s law takes a slightly different approach, setting the provider’s rate as the greater of the Medicare rate for the service provided, the usual and customary rate for the same service in the community, or an amount negotiated with the provider through mediation.
Connecticut has gone a step further, classifying surprise billing as an unfair trade practice. This exposes an out-of-network provider who bills in excess of a patient’s network rate at an in-network facility to injunctive relief and punitive damages.
Under Texas’ law, patients can request a mandatory mediation process to settle bills more than $500 for services provided at an in-network facility by certain out-of-network, facility-based physicians, such as anesthesiologists and radiologists.
California provides annual out-of-pocket caps on covered benefits, including out-of-network emergency care received when a patient is unstable.
Utah prohibits surprise billing in cases where workers’ compensation or self-insured employer benefits are obligated to pay.
Other states, including Georgia, New Jersey, Ohio and Rhode Island, have floated similar proposals to limit “surprise” medical bills, with no success so far, often due to vocal opponents among health care providers. Dr. Steven Walsh, president of the Medical Association of Georgia, for example, told Georgia Health News that his organization “believes that [the] legislation would create a system that lacks transparency and would undermine the state’s health care system, especially in rural areas, as physicians would be paid at inadequate and unsustainable levels.”
Health care facilities trying to mitigate problems should require contracted physicians, therapists and other providers to participate in the same insurance networks as the facility in which they work, and accept in-network rates for services, Bills advises.
The facilities should also consider disclosing a particular provider’s out-of-network status to patients, even if such disclosure is not required by law. This remedy, however, may not always be feasible in emergencies.
“Trying to address the matter beforehand, getting out in front of it to make sure the patient is aware and consents to the service and charge, seems to be the logical way to do it,” he said.
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