Surprise Billing in Private Health Insurance:
Overview and Federal Policy Considerations
November 25, 2019
Congressional Research Service
https://crsreports.congress.gov
R46116
SUMMARY
Surprise Billing in Private Health Insurance:
Overview and Federal Policy Considerations
In response to individuals receiving large, unexpected medical bills for out-of-network care,
Congress has recently been considering legislation to address surprise billing. As the term is
currently being discussed, surprise billing typically refers to situations where consumers are
unknowingly, and potentially unavoidably, treated by providers outside of the consumers’ health
insurance plan networks and, as a result, unexpectedly receive larger bills than they would have
received if the providers had been in the plan networks. In the 116th Congress, federal proposals
have sought to address surprise billing in the context of two types of situations: (1) where an
individual receives emergency services from an out-of-network provider and (2) where an
individual receives services from an out-of-network provider that is working at an in-network
facility.
R46116
November 25, 2019
Ryan J. Rosso
Analyst in Health Care
Financing
Noah D. Isserman
Analyst in Health
Insurance and Financing
Wen S. Shen
Legislative Attorney
Although no federal requirements directly address surprise billing, at least half of the states have
implemented policies to address surprise billing in some capacity. However, the state laws are
limited in application, as certain types of plans, such as self-funded plans offered by employers,
are exempt from state insurance regulation. State policies to address surprise billing vary in terms of the types of consumer
financial protections provided (e.g., consumer balance billing limitations) and the related requirements on insurers and
providers to establish such protections. Among states that offer similar types of consumer protections, policies may vary in
their application and may differ according to the types of situations addressed (e.g., emergency services, out-of-network care
at an in-network facility), the types of plans addressed (e.g., HMO, PPO), and the methods used to determine insurer
payments to providers for such services (e.g., benchmark, arbitration).
Similar to many state laws, recent federal legislative proposals related to surprise billing typically seek to address the
financial relationships between insurers, providers, and consumers. They do so by establishing new requirements on insurers,
providers, or both to create a degree of consumer protection related to reducing patient financial responsibilities with respect
to some types of out-of-network care.
In addition to including language that limits consumer cost sharing in surprise billing situations, the federal proposals
typically include language that specifies the methods by which insurers determine payment to providers for the services being
addressed in the bill (since solely reducing consumer financial liability in such situations would reduce the total amount
providers receive for their services). When combined with balance billing prohibitions, this type of requirement effectively
results in what the insurer and provider recognize as the total payment for out-of-network care.
To date, federal proposals are largely aligned in how they would address consumer protections in surprise billing situations.
However, the proposals differ in how they would address total payment for specified services furnished by out-of-network
providers.
Federal proposals generally have focused on at least one of two methods to determine insurers’ financial responsibility: (1)
selecting a benchmark provider payment rate that serves as the basis for determining specific amounts that insurers must pay
providers, net of consumer cost sharing or (2) establishing an alternative dispute resolution process, such as arbitration, with
provider payment determined by a neutral third party.
This report discusses selected policy issues that Congress may want to consider as it assesses surprise billing proposals. The
report concludes by providing an overview of how surprise billing proposals may affect some combination of insurers,
providers, and consumers. An appendix table compares two federal proposals that have gone through committee markup
December 12, 2019
(R46116)
Jump to Main Text of Report
Summary
In response to individuals receiving large, unexpected medical bills for out-of-network care, Congress has recently been considering legislation to address surprise billing. As the term is currently being discussed, surprise billing typically refers to situations where consumers are unknowingly, and potentially unavoidably, treated by providers outside of the consumers' health insurance plan networks and, as a result, unexpectedly receive larger bills than they would have received if the providers had been in the plan networks. In the 116th Congress, federal proposals have sought to address surprise billing in the context of two types of situations: (1) where an individual receives emergency services from an out-of-network provider and (2) where an individual receives services from an out-of-network provider that is working at an in-network facility.
Although no federal requirements directly address surprise billing, at least half of the states have implemented policies to address surprise billing in some capacity. However, the state laws are limited in application, as certain types of plans, such as self-funded plans offered by employers, are exempt from state insurance regulation. State policies to address surprise billing vary in terms of the types of consumer financial protections provided (e.g., consumer balance billing limitations) and the related requirements on insurers and providers to establish such protections. Among states that offer similar types of consumer protections, policies may vary in their application and may differ according to the types of situations addressed (e.g., emergency services, out-of-network care at an in-network facility), the types of plans addressed (e.g., HMO, PPO), and the methods used to determine insurer payments to providers for such services (e.g., benchmark, arbitration).
Similar to many state laws, recent federal legislative proposals related to surprise billing typically seek to address the financial relationships between insurers, providers, and consumers. They do so by establishing new requirements on insurers, providers, or both to create a degree of consumer protection related to reducing patient financial responsibilities with respect to some types of out-of-network care.
In addition to including language that limits consumer cost sharing in surprise billing situations, the federal proposals typically include language that specifies the methods by which insurers determine payment to providers for the services being addressed in the bill (since solely reducing consumer financial liability in such situations would reduce the total amount providers receive for their services). When combined with balance billing prohibitions, this type of requirement effectively results in what the insurer and provider recognize as the total payment for out-of-network care.
To date, federal proposals are largely aligned in how they would address consumer protections in surprise billing situations. However, the proposals differ in how they would address total payment for specified services furnished by out-of-network providers.
Federal proposals generally have focused on at least one of two methods to determine insurers' financial responsibility: (1) selecting a benchmark provider payment rate that serves as the basis for determining specific amounts that insurers must pay providers, net of consumer cost sharing or (2) establishing an alternative dispute resolution process, such as arbitration, with provider payment determined by a neutral third party.
This report discusses selected policy issues that Congress may want to consider as it assesses surprise billing proposals. The report concludes by providing an overview of how surprise billing proposals may affect some combination of insurers, providers, and consumers. An Appendix table compares two federal proposals that have gone through committee markup procedures: Title I of S. 1895 (Alexander), which went through a Senate Committee on Health, Education, Labor, and
Pensions (HELP) markup session on June 26, 2019, and Title IV of the amendment in the nature of a substitute (ANS) to
H.R. 2328
, which went through a markup session held by the House Committee on Energy and Commerce on July 17, 2019.
Surprise Billing
, which went through a markup session held by the House Committee on Energy and Commerce on July 17, 2019.
Congressional Research Service
Surprise Billing in Private Health Insurance: Overview and Federal Policy Considerations
Contents
Surprise Billing................................................................................................................................ 1
Private Health Insurance Billing Overview .............................................................................. 1
In-Network Coverage.......................................................................................................... 2
Out-Of-Network Coverage ................................................................................................. 3
Existing Requirements Addressing Surprise Billing ....................................................................... 5
Federal Requirements................................................................................................................ 5
Emergency Services ............................................................................................................ 5
Ancillary Provider Services ................................................................................................ 6
State Requirements.................................................................................................................... 7
Policy Considerations ...................................................................................................................... 8
What Plan Types Could Be Addressed? .................................................................................... 9
What Types of Services or Provider Types Could Be Addressed? .......................................... 10
How Could a Proposal Address Consumer Protections?......................................................... 12
What Could Be the Consumer’s Financial Responsibility in Surprise Billing
Situations?...................................................................................................................... 12
What Kind of Information Could Be Provided to the Consumer Prior to the
Receipt of Services? ...................................................................................................... 15
What Types of Requirements Could Be Placed on Insurers, Providers, or Both? .................. 16
How Could a Proposal Address Insurer and Provider Financial Responsibilities in
Surprise Billing Situations? ........................................................................................... 16
How Could a Proposal Address Network Requirements?................................................. 22
How Could Surprise Billing Requirements Be Enforced? ...................................................... 23
Current Enforcement Mechanisms on Private Health Insurance Issuers .......................... 23
Current Enforcement Mechanisms on Providers .............................................................. 25
How Could a Federal Surprise Billing Proposal Interact with State Surprise Billing
Laws? ................................................................................................................................... 26
Potential Policy Impacts ................................................................................................................ 27
Figures
Figure 1. Illustrative Examples of Billing Under Private Health Insurance .................................... 3
Tables
Table 1. Example of Cost-Sharing Requirements for a Plan That Covers Out-of-Network
Services ........................................................................................................................................ 4
Table A-1. Summary of Selected Provisions Addressing Surprise Billing Situations .................. 33
Appendixes
Appendix. Side-by-Side Comparison of Selected Federal Surprise Billing Provisions ................ 31
Congressional Research Service
Surprise Billing in Private Health Insurance: Overview and Federal Policy Considerations
Contacts
Author Information........................................................................................................................ 43
Congressional Research Service
Surprise Billing in Private Health Insurance: Overview and Federal Policy Considerations
Surprise Billing
As the term is currently being discussed, surprise billing typically refers to situations where a
consumer is unknowingly, and potentially unavoidably, treated by a provider outside of the
consumer’ consumer's health insurance plan network and, as a result, unexpectedly receives a larger bill than
he or she would have received if the provider had been in the plan network.
1
1
Most recently, in federal policy discussions, surprise billing has commonly been discussed in the
context of two situations: (1) where an individual receives emergency services from an out-
ofnetworkof-network provider and (2) where a consumer receives nonemergency services from an out-
ofnetworkof-network provider who is working in an in-network facility. However, surprise billing may occur
in other situations (e.g., ground ambulance and air ambulance services) where consumers are
unknowingly and unavoidably treated by an out-of-network provider.
As these situations imply, surprise billing is rooted in most private insurers
’' use of provider
networks. Therefore, this report begins with a discussion of the relationship between provider
network status and private health insurance billing before discussing existing federal and state
requirements around surprise billing.
This report then discusses various policy issues that Congress may want to consider when
assessing surprise billing proposals. Such policy topics include what plan types should be
addressed; what types of services or provider types should be addressed; what types of consumer
protections should be established; what requirements (including financial requirements) should be
placed on insurers, providers, or both; how these policies will be enforced; and what is the role of
the state. The list of topics discussed in this report is not exhaustive but should touch on many
aspects of the surprise billing proposals currently under consideration.
The report also briefly discusses potential impacts of the various surprise billing approaches. It
then concludes with an
appendixAppendix table comparing two federal proposals that have gone through
committee markup procedures. Specifically, the proposals included in the appendix are Title I of
S. 1895 (Alexander), which went through a Senate Committee Health, Education, Labor, and
Pensions (HELP) markup session on June 26, 2019, and Title IV of the amendment in the nature
of a substitute (ANS) to H.R. 2328, which went through a markup session held by the House
Committee on Energy and Commerce on July 17, 2019. As of the date of this report, no other
proposals have been approved through committee markup or gone further in the
legislativemaking process.
legislative-making process.
Private Health Insurance Billing Overview
The charges and payments for health care items or services under private health insurance are
often the result of the contractual relationships between consumers, insurers, and providers for a
given health plan.
1
A consumer may be surprised to receive larger-than-expected medical bills for other reasons. For example, the
surprise component may arise because a consumer misunderstands the terms of his or her health insurance policy and
receives a bill for an unexpected amount. In another example, a consumer may be covered under a plan with different
cost-sharing amounts for emergency services and other nonemergency services (e.g., the plan has higher cost sharing to
disincentivize emergency department use as compared with care that can be provided in another outpatient setting). In
the event a consumer receives a bill for services furnished in an emergency department of a hospital, the consumer may
be surprised to receive a bill for a larger amount than expected because the insurer determined that the visit was not an
emergency. Such other reasons generally are outside the scope of this report and are not included in this report’s usage
of the term surprise billing.
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Surprise Billing in Private Health Insurance: Overview and Federal Policy Considerations
given health plan.
Health care providers establish dollar amounts for the services they furnish; such amounts are
referred to as
chargescharges and reflect what providers think they should be paid. However, the actual
amounts that a provider is paid for furnishing services vary and may not be equal to the
providerestablishedprovider-established charges. The amounts a provider receives for furnished services, and how the payment
is divided between the insurer and the consumer, can vary due to a number of factors, including
(but not limited to) whether a given provider has negotiated a payment amount with a given
insurer, whether an insurer pays for services provided by out-of-network providers, enrollee
costsharingcost-sharing requirements, whether a provider can bill the consumer for an additional amount above
the amounts paid by the consumer (in the form of cost sharing), and the insurer.
Figure 1 highlights the effects of the aforementioned distinctions. The following sections discuss
them in the context of in-network and out-of-network billing.
In-Network Coverage
Under private insurance, the amount paid for a covered item or service is often contingent upon
whether a consumer
’'s insurer has contracted with the provider. Insurers typically negotiate and
establish separate contracts with hospitals, physicians, physician organizations (such as group
practices and physician management firms), and other types of providers.
22 For each provider
where such a contract exists with a particular insurer, that provider is then generally considered to
be a part of that insurer
’'s provider network (i.e., that provider is considered
in network).
in network).
The contents of contracts between insurers and providers vary and typically are the result of
negotiations between providers and insurers; however, these contracts generally specify the
amounts that providers are to receive for providing in-network services to consumers (i.e.,
negotiated amounts
).3).3 Negotiated amounts typically are lower than what providers would
otherwise charge, had they not contracted with an insurer.
When an in-network provider furnishes a service to a consumer, the insurer and consumer
typically will share the responsibility of paying the provider the negotiated amount established in
the contract.
44 The consumer
’'s portion of the negotiated amount is determined in accordance with
the cost-sharing requirements of the consumer
’'s health plan (e.g., deductibles, co-payments,
coinsurance, and out-of-pocket limits; see Figure 1
).5).5 Consumers who receive covered services
from in-network providers generally have lower cost-sharing requirements than consumers who
receive the same services out of network.
Generally, in-network providers are contractually prohibited from billing consumers for any
additional amounts above the negotiated amount (i.e., balance bill).
2
In some instances, an insurer may jointly negotiate with multiple entities. For example, an insurer may negotiate one
contract with a large health system that combines physicians and hospitals.
3 The negotiated amount an insurer pays for particular services typically varies among all providers that have
contracted with the insurer. Such discrepancies may be the result of various factors, including provider and insurer
market concentration.
4 Some services may be provided without cost to the consumer. For example, plans generally are required to provide
coverage for certain preventive health services without imposing cost sharing. 42 U.S.C. §300gg-13.
5 For definitions of such cost-sharing terms, see Centers for Medicare & Medicaid Services (CMS), Glossary, at
https://www.healthcare.gov/glossary/.
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Surprise Billing in Private Health Insurance: Overview and Federal Policy Considerations
additional amounts above the negotiated amount (i.e., balance bill).
Figure 1. Illustrative Examples of Billing Under Private Health Insurance
(20% coinsurance for in-network services and 40% coinsurance for out-of-network services)
Source: Congressional Research Service.
Notes: These examples are for illustrative purposes only; they do not represent the full spectrum of possible
billing scenarios. The examples assume the deductible has been met, the in-network out-of-pocket (OOP) limit
has not been reached, and there is no out-of-network OOP limit. In the example, Provider Charge = $50,000,
Total Allowed Amount = $35,000, and Negotiated Amount = $30,000. Consumer cost-sharing amounts are
based on these totals, where applicable. Outside of this example, coinsurance rates for in-network and out-
ofnetworkof-network services may vary by plan type.
Out-Of-Network Coverage
In instances where a contract between an insurer and provider does not exist, the provider is
considered out of network. The total costs for services furnished by an out-of-network provider,
and who pays for such services, depend on a number of factors; one key factor is whether the plan
covers out-of-network services in the first place.
Generally, point of service plans and preferred provider organization (PPO) plans cover out-
ofnetworkof-network services, whereas exclusive provider organization plans and health maintenance
organization (HMO) plans generally only cover services by providers within the plan
’'s network
(except in an emergency).
6
6
Insurer Pays for Out-Of-Network Services
In instances where an insurer pays some amount toward out-of-network services, both the
consumer and the insurer contribute some amount to the provider, with the consumer
’'s amount
determined in accordance with the plan
’'s cost-sharing requirements. Consumer cost-sharing
6
See footnote 11 and “Emergency Services.”
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Surprise Billing in Private Health Insurance: Overview and Federal Policy Considerations
requirements for services provided by an out-of-network provider may be separate from (and are
typically larger than) cost-sharing requirements for the same services provided by an in-network
provider. For example, a plan may have different deductibles for in-network and out-of-network
services.
Table 1 provides an example of how cost-sharing requirements may differ for in-network and
out-of-network services.
Table 1. Example of Cost-Sharing Requirements for a Plan That Covers Out-
ofNetwork Services
Selected Cost-Sharing
Requirements
Deductible
In-Network
Out-of-Network
$350 overall deductible
Coinsurance Rate
(Outpatient Surgery)
15% of negotiated amount
35% of total allowed amount
Out-of-Pocket Limit
$7,000
(includes amounts for in-network
providers only)
No limit
Source: Congressional Research Service (CRS) illustrative example.
Although cost-sharing requirements will indicate how the cost for the service is shared between
an insurer and a consumer, the insurer needs to determine the total amount that cost-sharing
requirements will be based on (since there are no negotiated amounts established in contracts
between out-of-network providers and insurers). The amount ultimately determined by the insurer
of-Network Services
|
Selected Cost-Sharing Requirements
|
In-Network
|
Out-of-Network
|
|
Deductible
|
$350 overall deductible
|
|
Coinsurance Rate (Outpatient Surgery)
|
15% of negotiated amount
|
35% of total allowed amount
|
Out-of-Pocket Limit
|
$7,000 (includes amounts for in-network providers only)
No limit
|
Source: Congressional Research Service (CRS) illustrative example.
Although cost-sharing requirements will indicate how the cost for the service is shared between an insurer and a consumer, the insurer needs to determine the total amount that cost-sharing requirements will be based on (since there are no negotiated amounts established in contracts between out-of-network providers and insurers). The amount ultimately determined by the insurer is often referred to as the total allowed amount and does not necessarily match the negotiated
amount insurers may have contracted with other providers or the provider charge amount for that
service. If a total allowed amount is larger than a negotiated rate, then the consumer
’'s payment
for out-of-network services could be larger than a corresponding payment for in-network services
because of increased cost sharing, as per the terms of the plan and the fact that the total cost of
services on which consumer cost sharing is based is larger.
Insurers have their own methodologies for calculating the total allowed amount. They may do so
by incorporating the usual, customary, and reasonable rate (UCR), which is the amount paid for
services in a geographic area based on what providers in the area usually charge for the same or
similar medical services.
7
7
If an out-of-network provider
’'s total charge
for a service exceeds the total allowed amount (and if
allowed under state law), the provider may directly bill (i.e., balance bill) a consumer for the
amount of that difference (sometimes referred to as the excess charge; see Figure 1). The
consumer would therefore be responsible for paying amounts associated with any cost-sharing
requirements
andand the balance bill.
The provider is responsible for collecting any balance bill amounts; from an administrative
standpoint, it is considered more difficult to collect these balance bill amounts than to collect
payments from insurers.
88 In some instances, providers may ultimately settle with balance-billed
consumers for amounts that are less than the total balance bill.
CMS, “UCR (Usual, Customary, and Reasonable),” at https://www.healthcare.gov/glossary/ucr-usual-customary-andreasonable/.
8 Loren Adler et al., State Approaches to Mitigating Surprise Out-of-Network Billing, USC-Brookings Schaeffer
7
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Surprise Billing in Private Health Insurance: Overview and Federal Policy Considerations
There are no federal restrictions on providers balance billing consumers with private health
coverage.
Insurer Does Not Pay for Out-of-Network Services
If the insurer pays only for in-network services, the consumer is responsible for paying the entire
bill for out-of-network services (represented in Figure 1 as
“"Out-of-Network Services Not
Covered Under Plan
”).9").9 Although the consumer pays the provider in this instance, the consumer
costs are not technically cost sharing (since the insurer is not sharing costs with the consumer),
nor are they the balance remaining after the provider receives certain payments. Therefore, this
report refers to these costs as
other consumer costs.10
other consumer costs.10
Similar to balance bills, providers are responsible for collecting these other consumer costs and
ultimately may decide to settle with the consumer for amounts that are less than the initial
provider charges.
Existing Requirements Addressing Surprise Billing
Federal Requirements
Federal Requirements
Currently, no federal private health insurance requirements address surprise billing; however,
federal requirements do address related issues. The Affordable Care Act (ACA; P.L. 111-148, as
amended) established requirements regarding consumer cost sharing for, and plan coverage of,
out-of-network emergency services and consumer cost-sharing requirements for ancillary
provider services furnished at in-network facilities.
Emergency Services
Emergency Services
As a result of the ACA, if a self-insured plan or a fully insured large-group plan, small-group
plan, or individual-market plan covers services in a hospital emergency department, the plan is
required to cover emergency services irrespective of the provider
’'s contractual status with the
plan.
1111 In other words, insurers of plans that cover in-network emergency services are effectively
required under the ACA to contribute some amount to a provider that furnishes out-of-network
Initiative for Health Policy, February 2019, p. 6, at https://www.brookings.edu/wp-content/uploads/2019/02/Adler_etal_State-Approaches-to-Mitigating-Surprise-Billing-2019.pdf. Hereinafter, Adler et al., State Approaches.
9 Under federal statute, plans that cover in-network emergency services are required to cover out-of-network
emergency services, even if the plan would not otherwise cover other out-of-network care. See “Emergency Services.”
For ease of discussion, this report will use the term plans that do not cover out-of-network services to describe plans
that do not contribute some amount to pay for out-of-network care with this exception.
10 A consumer generally is also responsible for the entire bill if he or she receives a service that is not covered by the
plan (i.e., an excluded service), regardless of whether they received the service from an in-network provider.
11 Emergency services include medical screening examinations that are within the capability of the emergency
department of a hospital and any further medical examination and treatment that are within the capabilities of the staff
and facilities available at the hospital and necessary to stabilize the consumer. The plan is also required to cover
emergency services without the need for any prior authorization and without the imposition of coverage limitations. 42
U.S.C. §300gg-19a(b). For a description of the distinction between self-insured and fully funded plans and how federal
private health insurance requirements apply to such plans, see CRS Report R45146, Federal Requirements on Private
Health Insurance Plans.
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Surprise Billing in Private Health Insurance: Overview and Federal Policy Considerations
required under the ACA to contribute some amount to a provider that furnishes out-of-network emergency services to an enrolled consumer, even if the insurer otherwise would not contribute
any amount for services furnished by other types of out-of-network providers.
More specifically, insurers are required to recognize the greatest of the following three payment
standards as the total allowed amount for emergency services: (1) the median amount the insurer
has negotiated with in-network providers for the furnished service;
1212 (2) the usual, customary, and
reasonable amount the insurer pays out-of-network providers for the furnished service; or (3) the
amount that would be paid under Medicare for the furnished service.
1313 (Insurers may recognize
another amount as the total allowed amount provided such amount is larger than all three of the
aforementioned amounts.) After determining the appropriate total allowed amount, the insurer
and the consumer each will pay the provider a portion of the total allowed amount, according to
the cost-sharing requirements of the consumer
’'s plan.
The ACA requirement also addressed a consumer
’'s payment responsibility vis-à-vis her health
plan for out-of-network emergency care. Specifically, when a consumer receives emergency
services from an out-of-network provider, the ACA limits a consumer
’'s cost sharing, expressed as
co-payment amount or coinsurance rate, to the in-network amount or rate of the consumer
’s
's health plan.
1414 In other words, if a consumer receives out-of-network emergency services and is
enrolled in a plan that has a 15% coinsurance rate for in-network services and a 30% coinsurance
rate for out-of-network services, the consumer will be responsible for 15% of the total allowed
amount for the out-of-network care.
15
15
The requirement does not address the plan deductible or out-of-pocket limits. Therefore, if a plan
has separate deductibles and out-of-pocket limits for in-network and out-of-network services,
then the plan may require that consumer payments for out-of-network emergency services be
applied to these out-of-network amounts. As a result, although a consumer would be subject to
innetworkin-network co-payment amounts or coinsurance rates, the consumer may still be responsible for
greater cost sharing than if the payments for the services were applied to the in-network
deductible and out-of-pocket limit.
The requirement does not limit a provider from balance billing the consumer after receiving
consumer cost-sharing and insurer payment amounts.
Ancillary Provider Services
Individual-market and small-group plans must adhere to network adequacy standards in order to
be sold on an exchange. As part of these standards, plans with provider networks must count
consumer cost sharing for an essential health benefit furnished by an out-of-network ancillary
12
If there is no per-service amount negotiated with in-network providers (such as under a capitation or other similar
payment arrangement), this amount is disregarded and insurers determine an appropriate total allowed amount based on
the other two factors. 45 C.F.R. §147.138(b)(3)(i)(A).
13 45 C.F.R. §147.138(b)(3). The greatest-of-three payment standard does not apply in cases where state law prohibits a
consumer from being balanced billed or where the issuer is contractually responsible for such amounts. 45 C.F.R.
§147.138(b)(3)(iii).
14 42 U.S.C. §300gg-19a(b)(1)(C)(ii)(II) and 45 C.F.R. §147.138(b)(3).
15 In the event that the total allowed amount determined in accordance with 45 C.F.R. §147.138(b)(3) is larger than the
negotiated rate for in-network services, the consumer would pay a larger amount for the out-of-network services as
compared with the in-network services, even though the coinsurance rate would be identical. The opposite would be
true should the total allowed amount determined in accordance with 45 C.F.R. §147.138(b)(3) be smaller than the
negotiated rate for in-network services.
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Surprise Billing in Private Health Insurance: Overview and Federal Policy Considerations
consumer cost sharing for an essential health benefit furnished by an out-of-network ancillary provider at an in-network facility toward the consumer
’'s in-network out-of-pocket maximum,
unless the plan provides a notice to the consumer prior to the furnishing of such services.
16
State Requirements
16
State Requirements
Although there are no federal requirements that directly address surprise billing, at least half of
states have implemented policies to address some form of surprise billing. As of July 2019, 26
states had addressed surprise billing for emergency department services and 19 states had
addressed surprise billing for nonemergency care at in-network hospitals.
1717 State policies to
address surprise bill vary and, as a result, have created different sets of requirements on insurers
and providers to establish different sets of protections for consumers. However, state surprise
billing laws are consistent in that they do not apply requirements to self-insured plans (see text
box below).
Federal and State Regulation of Insurance
States are the primary regulators of the business of health insurance, as codified by the 1945 McCarran-Ferguson
Act. Each state requires insurers to be licensed in order to sell health plans in the state, and each state has a
unique set of requirements that apply to state-licensed issuers and the plans they offer. State oversight of health
plans applies only to plans offered by state-licensed issuers. Because self-insured plans are financed directly by the
plan sponsor, such plans are not subject to state law.
The federal government also regulates state-licensed insurers and the plans they offer. Federal health insurance
requirements typically follow the model of federalism: federal law establishes standards, and states are primarily
responsible for monitoring compliance with, and enforcement of, those standards. Generally, the federal standards
establish a minimum level of requirements (federal floor) and states may impose additional requirements on
insurers and the plans they offer, provided the state requirements neither conflict with federal law nor prevent the
implementation of federal requirements. The federal government also regulates self-insured plans, as part of
federal oversight of employment-based benefits. Federal requirements applicable to self-insured plans often are
established in tandem with requirements on fully insured plans and state-licensed issuers. Nonetheless, fewer
federal requirements overall apply to self-insured plans compared with fully insured plans.
Note: For an overview of the regulation of private health plans, see
“"Regulation of Private Health Plans
”" in
CRS Report R45146, Federal Requirements on Private Health Insurance Plans
.
.
Multiple research organizations have highlighted the differences among state policies. They have
shown whether state surprise billing policies (1) determine the amounts or methodologies by
which providers are paid by insurers and consumers for specified out-of-network services; (2)
include transparency standards for providers and insurers (e.g., notification requirements on
providers or requirements on insurers with respect to provider directory maintenance), (3) address
different types of provider settings and services, and (4) address different types of plans (i.e.,
HMO or PPO).18
16
45 C.F.R. §156.230. In general, health insurance plans offered through exchanges must be qualified health plans
(QHPs). As defined in 42 U.S.C. §18021, a QHP is a plan that is offered by a state-licensed health insurance issuer that
meets specified requirements, is certified by an exchange, and covers the essential health benefits (EHB) package. For
more information on essential health benefits, see CRS In Focus IF10287, The Essential Health Benefits (EHB).
17 Maanasa Kona, The Commonwealth Fund, State Balance Billing Protections, July 31, 2019, at
https://www.commonwealthfund.org/publications/maps-and-interactives/2019/jul/state-balance-billing-protections.
Hereinafter Kona, State Balance Billing Protections.
18 Kona, State Balance Billing Protections, Jack Hoadley, Sandy Ahn, and Kevin Lucia, The Center on Health
Insurance Reforms, Balance Billing: How Are States Protecting Consumers from Unexpected Charges?, June 2019, at
https://www.rwjf.org/en/library/research/2015/06/balance-billing--how-are-states-protecting-consumers-fromunexpe.html (hereinafter Hoadley, Ahn, and Lucia, Balance Billing), and National Academy of State Health Policy
(NASHP), Comprehensive State Laws Enacted to Address Surprise Balance Billing, March 2019, at
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HMO or PPO).18
The National Academy of State Health Policy (NASHP) examined the differences between the
eight states with surprise billing laws. As an example of the variance between states, NASHP
indicated that the eight states varied in terms of how the total allowable amount is set under the
laws. Further, two states set payment standards based on a greater of multiple benchmark rates,
one state sets payment standards based on a lesser of multiple benchmark rates, one state sets
payment standards based on the commercially reasonable value, one state sets payment standards
based on the rates set under a regulatory authority within the state, and four states create a
dispute-resolution process to resolve surprise balance bills.
19
19
In addition to the often-discussed out-of-network emergency services provided in facilities and
services provided by out-of-network providers at in-network facilities, some states have
attempted to regulate ground and air ambulance surprise billing, albeit to a lesser extent.
20
20 Although states have attempted to regulate air ambulances, they have been limited in their ability
to do so as a result of the Airline Deregulation Act of 1978 (P.L. 95-504), which preempts state
regulation of payment rates for certain air transportation carriers (including air ambulances).
21
Policy Considerations
21
Policy Considerations
Federal surprise billing proposals, like state laws, typically seek to address the current financial
relationships between insurers, providers, and consumers for certain services. In doing so, the
proposals generally would establish new requirements on insurers, providers, or both in specified
billing situations to create a degree of consumer protection.
As an example, requirements on insurers may address how the insurer pays for specified services
or what consumer cost-sharing requirements would be under specified plans. Requirements on
providers may address the extent to which providers may balance bill consumers. Requirements
on both entities may establish the terms under which insurers and providers participate in
alternative dispute resolution processes (e.g., arbitration) to determine the amount providers are
paid by insurers and consumers for surprise bills.
Surprise billing can be addressed in a variety of ways, and the following sections discuss
questions policymakers may want to consider when evaluating these different approaches. The
following policy discussions are examples of the types of questions policymakers may want to
consider when evaluating surprise billing proposals and should not be treated as an exhaustive
list.
Furthermore, due to the development, introduction, and modification of numerous federal
proposals on this topic during the
116th116th Congress, the policy discussions in this section of the
report generally do not include specific references to any current or historical federal proposals.
https://nashp.org/wp-content/uploads/2019/03/Surprise-Billing-Laws-Chart-final-for-pdf-3.14.19.pdf (hereinafter
NASHP, Comprehensive State Laws).
19 NASHP, Comprehensive State Laws.
20 Adler, et al., State Approaches, p. 30.
21 Of the four states that attempted to limit air ambulance balance billing, as identified by the Government
Accountability Office (GAO) in its report on air ambulance private health insurance billing, three faced litigation
regarding such laws and regulations. One case was dismissed for lack of subject matter jurisdiction, and the other two
cases were decided with both state policies being preempted by the Airline Deregulation Act of 1978. GAO, Air
Ambulance: Available Data Show Privately-Insured Patients Are at Financial Risk, March 20, 2019, p. 21, at
https://www.gao.gov/assets/700/697684.pdf. Hereinafter, GAO, Air Ambulance.
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report generally do not include specific references to any current or historical federal proposals. The report references state surprise billing laws to provide examples and context, but such
references should not be considered comprehensive references of
allall applicable state laws.
Although specific federal policies are not explicitly discussed in this section of the report, the
report concludes with an
appendixAppendix that provides side-by-side summaries of the two surprise
billing proposals from the
116th116th Congress that have passed through committee markups, both as
part of larger bills. Specifically, the proposals included in the appendix are Title I of S. 1895
(Alexander), which went through a Senate Committee on Health, Education, Labor, and Pensions
(HELP) markup session on June 26, 2019, and Title IV of the amendment in the nature of a
substitute (ANS) to H.R. 2328, which went through a markup session held by the House
Committee on Energy and Commerce on July 17, 2019.
22
22
What Plan Types Could Be Addressed?
Federal private health insurance requirements generally vary based on the segment of the private
health insurance market in which the plan is sold (individual, small group, large group, and
selfinsured).23self-insured).23 Some requirements apply to all market segments, whereas others apply only to
selected market segments.
2424 For example, plans offered in the individual and small-group markets
must comply with the federal requirement to cover the essential health benefits; however, plans
offered in the large-group market and self-insured plans do not have to comply with this
requirement.
States, in their capacity as the primary regulators of health insurance plans, can regulate fully
insured plans in the individual, small-group, and large-group markets. States are not able to
directly apply surprise billing requirements to self-insured plans, but certain state requirements
may affect state residents enrolled in a self-insured plan. For example, at least one state (New
Jersey) has allowed self-insuring entities to opt in to surprise billing requirements.
25
25
Relatedly, state requirements on providers may affect consumers with self-insured coverage. For
example, New York established an arbitration process for certain surprise billing situations, which
applied to providers and fully insured plans. This arbitration process did not apply to self-insured
plans. However, results from a National Bureau of Economic Research working paper suggest the
policy affected consumers with both fully insured and self-insured plans. The authors
hypothesized that because most providers were unaware of whether the consumer
’'s plan was
fully insured or self-insured, providers billed amounts that were
“"likely chosen to reflect the
possibility of arbitration.
”26
"26
In light of this example, to the extent that a federal proposal would establish requirements on
providers for consumers enrolled in plans in a specific market segment (e.g., only self-insured
22
The summary of Title IV of the amendment in the nature of a substitute (ANS) to H.R. 2328 in the Appendix also
incorporates language from amendments to the ANS related to surprise billing, including the amendment to the ANS
offered by Rep. Ruiz and Rep. Bucshon. A full list of all amendments can be found in the Appendix footnotes.
23 For an overview of federal requirements on private health insurance plans, see CRS Report R45146, Federal
Requirements on Private Health Insurance Plans.
24 Consumers may have other types of private coverage (e.g., short-term, limited-duration insurance) that may not be
subject to the same requirements applicable to individual, small-group, large-group, or self-insured plans.
25 It is unclear the extent to which self-insuring entities within the state have opted in. P.L. 2018, Chapter 32, 218th
Legislature (2018), New Jersey, at https://www.njleg.state.nj.us/2018/Bills/AL18/32_.PDF.
26 Zack Cooper, Fiona Scott Morton, and Nathan Shekita, Surprise! Out-Of-Network Billing for Emergency Care in the
United States, National Bureau of Economic Research, Working Paper no. 23623, July 2017, Revised January 2018 p.
32. Hereinafter, Cooper, Scott Morton, and Shekita, Surprise!
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providers for consumers enrolled in plans in a specific market segment (e.g., only self-insured plans), providers may need to develop processes to determine whether a consumer has such a
plan, as this information is not necessarily available to the provider when services are furnished.
Broadly applying a provider requirement so that it addresses consumers enrolled in all types of
health plans would minimize the potential that consumers inadvertently receive a surprise bill.
Many federal proposals would be broadly applicable to self-insured and fully insured individual,
small-group, and large-group private health insurance plans, though there has been some variance
with respect to certain types of plans (e.g., Federal Employees Health Benefits [FEHB] Program
plans).
27
27
What Types of Services or Provider Types Could Be Addressed?
Federal surprise billing proposals from the
116th116th Congress have commonly focused on variants of
two different types of services: (1) where an individual receives emergency services from an
outofout-of-network provider and (2) where an individual receives services from an out-of-network
provider that is working at an in-network facility.
For context on the prevalence of surprise billing, a recent study estimated that 20% of hospital
inpatient admissions from an emergency department, 14% of outpatient visits to an emergency
department, and 9% of elective inpatient admissions in 2014 were likely to produce surprise
medical bills (i.e., were
“"cases in which one or more providers were out of network and the
patient was likely to be unaware of the provider
’'s status or unable to choose an in-network
provider for care instead
”).28").28 Another study found that the prevalence of similarly defined
“surprise” "surprise" out-of-network billing increased for emergency department visits and inpatient
admissions between 2010 and 2016.
29
29
Researchers have suggested that surprise billing tends to occur around these particular types of
services due to a unique set of market forces that differentiate these services from how other
services function within the provider-insurer-consumer relationship.
30
30
Many providers decide to join an insurer
’'s network (thereby accepting a lower negotiated rate for
services) knowing that by doing so, the insurer will steer their enrollees toward in-network
providers.
3131 Insurers steer their enrollees toward in-network providers by limiting plan coverage
to in-network providers only or providing more generous coverage for in-network providers as
compared with other out-of-network providers (i.e., reduced cost sharing). This approach
effectively disincentives consumers from seeking out-of-network care in most situations.
27
The Federal Employees Health Benefits (FEHB) Program provides health insurance to federal employees, retirees,
and their dependents. For more information on this program, see CRS Report R43922, Federal Employees Health
Benefits (FEHB) Program: An Overview.
28 Christopher Garmon and Benjamin Chartock, “One in Five Inpatient Emergency Department Cases May Lead to
Surprise Bills,” Health Affairs, vol. 36, no. 1 (2017), at
https://www.healthaffairs.org/doi/pdf/10.1377/hlthaff.2016.0970. Hereinafter, Garmon and Chartock, “One in Five.”
The authors looked at a nationwide claims database that included claims from 2007 to 2014 for individuals with
employer-sponsored health insurance. Such data may not be representative of all private insurers.
29 Eric C. Sun et al., “Assessment of Out-of-Network Billing for Privately Insured Patients Receiving Care in InNetwork Hospitals,” August 12, 2019. Hereinafter, Sun et al., “Assessment of Out-of-Network Billing.” The authors
looked at a nationwide health insurance claims database that included claims from 2010 to 2016 for individuals from all
50 states receiving private health insurance from a large commercial insurer. Such data may not be representative of all
private insurers.
30 Adler, et al., State Approaches, p. 4, and Cooper, Scott Morton, and Shekita, Surprise!, p. 3.
31 Other market forces also affect a provider’s decision to join a network (e.g., provider or insurer market concentration,
reputational concerns).
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effectively disincentives consumers from seeking out-of-network care in most situations.
However, in the aforementioned billing situations, consumers are not necessarily able to choose
an in-network provider. For example, a consumer may be unconscious due to a medical
emergency and unable to decide whether he or she wants to be seen by an in-network or out-
ofnetworkof-network emergency provider. In this instance, the consumer may be taken to the nearest hospital
emergency department (without consideration of network status of the hospital and/or the
emergency department providers within the hospital). As another example, consumers may be
able to select or seek out a particular in-network hospital or in-network surgeon for a specific
procedure, but the consumers are unlikely to be able to select every provider participating in that
specific procedure. This is especially true if the consumer is unaware of the need for additional
assistance when he or she arranges the procedure.
Considering this, certain emergency and ancillary providers may have fewer incentives to join the
network of a health insurer, since they are more likely to receive constant demand for their
services regardless of network status and consumer choice. Instead, these provider types may find
it more beneficial to stay out of network in order to be able to charge more for their services than
the negotiated rate they would accept had they been considered in network.
32
32
However, surprise billing is not limited to the aforementioned situations. It can occur in other
situations (e.g., ambulance services or in situations where an in-network physician sends a
consumer’ consumer's lab test to an out-of-network lab).
33
33
Some federal surprise billing proposals address air ambulance services, albeit fewer than address
emergency services and services provided by out-of-network providers at in-network facilities.
Air ambulances are similar to the previously discussed situations in that consumers often are not
able to choose an in-network air ambulance due to the urgency associated with the request for
services. In addition, the
“"relative rarity and high prices charged [by air ambulance providers]
reduces the incentives of both air ambulance providers and insurers to enter into contracts with
agreed-upon payment rates.
”34"34 For context, the Government Accountability Office found, as a
result of its analysis of FAIR Health claims data, that 69% of air ambulance transports for
privately insured consumers were out of network.35
32
Researchers have hypothesized that one of the largest emergency department physician staffing companies
(TeamHealth) has leveraged its ability to go out of network to facilitate higher in-network payment rates for services
during negotiations with insures. TeamHealth, along with another large emergency department physician staffing
company, EmCare, which has a high rate of out of network billing according to researchers, were both recently
acquired by private equity firms and were explicitly identified in a press release announcing the launch of a
congressional investigation into private equity firms’ role in surprise billing. Cooper, Scott Morton, and Shekita,
Surprise!, p. 25. House Committee on Energy and Commerce, “Pallone and Walden Launch Bipartisan Investigation
into Private Equity Firms’ Role in Surprise Billing Practices,” press release, September 16, 2019, at
https://energycommerce.house.gov/newsroom/press-releases/pallone-and-walden-launch-bipartisan-investigation-intoprivate-equity-firms.
33 For research on the prevalence of surprise medical billing among different specialties, see Kevin Kennedy, Bill
Johnson, and Jean Funglesten Biniek, “Surprise Out-of-Network Medical Bills During In-Network Hospital
Admissions Varied by State and Medical Specialty, 2016,” #HealthyBytes (blog), Health Care Cost Institute, March 28,
2019, at https://www.healthcostinstitute.org/blog/entry/oon-physician-bills-at-in-network-hospitals; and Sun et al.,
“Assessment of Out-of-Network Billing.”
34 GAO, Air Ambulance, p. 8.
35 GAO acknowledges that its findings “reflect the subset of transports in the FAIR Health data set with information on
network status.” FAIR Health is an “independent, nonprofit organization that collects data [from private insurers] for
and manages a database of private health insurance claims data.” The FAIR Health data set may not be representative
of all private insurers. GAO, Air Ambulance, p. 16.
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privately insured consumers were out of network.35
In conclusion, surprise billing proposals may address one or multiple different types of situations.
To the extent that the proposals address multiple situations, they may treat such situations
similarly or may apply different types of requirements to each situation.
How Could a Proposal Address Consumer Protections?
In surprise billing situations, the consumer is typically the one being surprised. Correspondingly,
proposals seeking to address surprise billing situations generally include provisions that would
establish consumer protections.
Most federal surprise billing proposals from the
116th116th Congress generally address consumer
financial liabilities in these situations. Generally, they do so by tying consumer cost sharing (in
some capacity) to what cost sharing would be had specified services been provided in network
and by limiting the extent to which consumers can be balance billed for specified services.
In addition, some federal proposals incorporate various requirements designed to inform
consumers so they can make more informed choices about seeing in-network or out-of-network
providers. In current federal proposals, this has most commonly taken the form of consumer
notification requirements, which are designed to inform the consumer, prior to receiving out-
ofnetworkof-network services, that he or she might be seen by an out-of-network provider (among other pieces
of information). Some federal proposals link such notification requirements with consumer
financial protections, so that the consumer financial protections would not apply in instances
where notification requirements were satisfied (e.g., a consumer may be balanced billed only if
the provider satisfied consumer notification requirements).
The aforementioned financial protections and notification requirements typically are established
by creating requirements on insurers, providers, or both. They may take a variety of forms, as
discussed in the subsequent sections.
What Could Be the Consumer
’'s Financial Responsibility in Surprise Billing
Situations?
As stated in the
“"Private Health Insurance Billing Overview
”" section, privately insured
consumers may be liable for three types of consumer financial responsibilities when receiving
services: cost sharing, balance bills, and other consumer costs. In out-of-network situations,
consumers with plans that cover out-of-network benefits would potentially be responsible for
consumer cost sharing and balance bills, whereas consumers with plans that do not cover out-
ofnetworkof-network benefits would be responsible for other consumer costs.
Surprise billing requirements may address any combination of these three consumer financial
responsibilities (cost sharing, balance billing, and other consumer costs), which would have direct
implications on the total amount that consumers pay, and the total amount that providers receive
as payment, for these services.
36 Cost-sharing and balance billing requirements would affect those
36
Restrictions on the total consumer liability in certain billing situations would not necessarily mean that the provider
would receive an offsetting amount from a consumer’s plan (i.e., that the total amount the provider received for such
services would be equal to what he or she would have received under current law). Therefore, surprise billing proposals
that include consumer financial protections also generally include provisions that would address the amount providers
would receive for such services (e.g., by incorporating a benchmark payment for services, by incorporating an
arbitration process that would be used to determine payment for such services). In other words, most surprise billing
proposals effectively specify how the costs associated with a reduced consumer payment should be shared between the
consumer, insurer, and provider. Such considerations are discussed further in “How Could a Proposal Address Insurer
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36 Cost-sharing and balance billing requirements would affect those consumers with plans that cover services provided by out-of-network providers, whereas other
consumer cost requirements would affect insured consumers with plans that do not cover services
provided by out-of-network providers.
3737 The following sections discuss how surprise billing
requirements associated with each of these financial responsibilities may be structured.
Cost Sharing
Cost Sharing
Consumer cost sharing for specified out-of-network services could be limited by defining,
through requirements on plans, consumer cost-sharing rates for out-of-network services. Most
federal proposals generally include cost-sharing requirements that tie cost sharing (in some
capacity) to corresponding in-network requirements. One study of state-level surprise billing laws
indicated that state-level laws generally included similar cost-sharing requirements.
3838 Although it
has been common to tie out-of-network cost sharing to in-network requirements (e.g., the same
co-payment amount or the same coinsurance percentage) for certain services, cost sharing could
be tied to any rate or amount.
Cost-sharing requirements do not need to apply to deductibles, coinsurance rates, co-payment
amounts, and out-of-pocket limits. For example, under current federal law, when a consumer
receives emergency care from an out-of-network provider, the cost-sharing requirement,
expressed as a co-payment or coinsurance rate, is limited to the in-network amount or rate of the
consumer’ consumer's health plan.
3939 Cost sharing does not address the plan deductible or out-of-pocket
maximum. Therefore, under this requirement, insurers may apply out-of-network deductibles and
out-of-pocket maximums for emergency services if such cost-sharing requirements generally
apply to out-of-network benefits, which could increase the amount owed by the consumer as
compared with a requirement that aligned the deductible, co-payment amount, coinsurance rate,
and out-of-pocket limit.
Cost-sharing requirements do not necessarily specify the total dollar amount that a consumer
pays for out-of-network services. For example, coinsurance is based on a percentage of the
amount recognized by the insurer as the total cost of care.
4040 Therefore, the total cost-sharing
dollar amount a consumer ultimately pays for care also may be influenced by any provisions that
establish methodologies for determining the total cost of care for specified surprise billing
situations.
Balance Billing
Balance Billing
Establishing limitations on cost-sharing requirements alone does not prohibit or limit the extent to
which a consumer may be balance billed (in instances where the plan covers out-of-network
services).
4141 Therefore, if policymakers were interested in defining the extent to which a provider
may balance bill a consumer (if at all), such language also would need to be included.
Requirements that insulate consumers from balance billing may be placed on providers or
and Provider Financial Responsibilities in Surprise Billing Situations?”
37 For example, a proposal could address only plans that cover out-of-network care (i.e., the proposal would not address
other consumer costs), as is the case with some surprise billing protections in Arizona. Kona, State Balance Billing
Protections.
38 NASHP, Comprehensive State Laws.
39 42 U.S.C. §300gg-19a(b)(1)(C)(ii)(II) and 45 C.F.R. §147.138(b)(3)(ii).
40 For out-of-network services, this amount is referred to as the total allowed amount. See “Insurer Pays for Out-OfNetwork Services.”
41 Balance billing does not occur when insurers do not contribute any amount toward an out-of-network service.
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Requirements that insulate consumers from balance billing may be placed on providers or insurers. For example, language may explicitly prohibit, fine, or limit the extent to which a
provider can directly balance bill a consumer. By contrast, language may require insurers to
“hold
"hold the consumer harmless
”" and pay the provider
“"their billed charges or some lower amount that is
acceptable to the provider.
”42"42 From the consumer
’'s perspective, both types of requirements would
have similar effects, in that both requirements would result in the consumer only being
responsible for paying the cost sharing associated with the service.
According to one study of state-level surprise billing laws, 28 states had incorporated provisions
(as of July 31, 2019) that insulated consumers from certain balance bills through requirements on
insurers, providers, or both.
43
43
Other Consumer Costs
Surprise billing proposals may be structured so that consumers with a plan that does not cover
out-of-network services (e.g., HMO) are treated differently in surprise billing situations than
consumers with plans that do cover out-of-network services (e.g., PPO).
4444 For example, a surprise
billing proposal may be structured so it applies only to consumers with plans that cover out-
ofnetworkof-network benefits (i.e., it would not address other consumer cost situations).
4545 In other words, this
type of policy could reduce a consumer
’'s financial liabilities in surprise billing situations if the
consumer were enrolled in a plan with out-of-network benefits, but it would not address the
consumer’ consumer's financial liabilities if the consumer were enrolled in a plan that does not cover out-
ofnetwork benefits.46
of-network benefits.46
Alternatively, proposals may define the financial liability individuals face for receiving out-
ofnetworkof-network care while enrolled in a plan that does not cover out-of-network benefits. Such
requirements would effectively define the other consumer cost (i.e., the total cost of care) and
could incorporate similar methodologies used in other surprise billing laws (e.g., benchmark).
Without any additional requirements, the consumer would still be responsible for the entire other
consumer cost.
Proposals also could include provisions that require insurers to cover a portion of the other
consumer cost, effectively requiring the consumer
’'s plan to cover that particular benefit.
4747 This
could occur because of language that explicitly requires plans to cover a particular benefit or
defines the amount that a plan must contribute for specified services.48
42
Hoadley, Ahn, and Lucia, Balance Billing, p. 6.
Kona, State Balance Billing Protections.
44 Under current law, plans that cover emergency services are required to contribute some amount to a provider that
furnishes out-of-network emergency services to a consumer, even if it would not contribute any amount for services
furnished by other types of out-of-network service providers. Therefore, emergency service cost-sharing requirements
and balance billing restrictions would apply to all plans that cover emergency services, regardless of whether the plan
would cover any other out-of-network services. See “Emergency Services” and 42 U.S.C. §300gg-19a.
45 For example, Arizona’s surprise billing arbitration process does not apply to health plans that exclude out-of-network
coverage. Arizona Department of Insurance, Surprise Out-of-Network Bill Dispute Resolution, at
https://insurance.az.gov/soonbdr.
46 Under current law, consumers with plans that cover out-of-network benefits generally pay less out-of-pocket for outof-network services than consumers enrolled in plans that do not cover out-of-network services.
47 Using Figure 1 as an example, this would effectively make column 3 situations function similar to column 2
situations, though other requirements in the proposal may limit the extent to which a provider may balance bill.
48 For an example of explicit language, see 42 U.S.C. §300gg-19a(b)(1)(B) and “Emergency Services.”
43
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Excluded Services
defines the amount that a plan must contribute for specified services.48
Excluded Services
Although other consumer costs are generally referenced throughout this report in the context of network status,
a consumer also may be in an other consumer cost situation if they receive a service that is not covered by the plan
(i.e., receive an excluded service). Regardless of whether the consumer received the excluded service from an
innetworkin-network provider, the consumer generally would be responsible for the full cost of care. Surprise billing proposals
could apply protections only to covered services or could be applicable more broadly (e.g., to all specified
services, without reference to whether the plan covers such services).
To date, many federal surprise billing proposals have addressed other consumer costs by requiring
insurers to cover a portion of such costs. Many federal proposals have done this by making
surprise billing provisions that limit consumer costs in surprise billing situations to a specified
amount (e.g., in-network cost sharing) and require insurers to contribute some amount to
providers applicable to all plans, irrespective of whether a plan would cover such out-of-network
service.
What Kind of Information Could Be Provided to the Consumer Prior to the
Receipt of Services?
Because surprise billing may occur when a consumer is
unknowinglyunknowingly treated by a provider outside
of the consumer
’'s health insurance plan
’'s network, surprise billing proposals may include a
variety of requirements that would seek to provide consumers with more information about the
providers in their network and/or the care they are to receive in order to make an informed
decision about their medical care providers. Such requirements alone would not eliminate
surprise billing but could reduce the prevalence of
unexpectedunexpected out-of-network use, which in turn
would decrease the prevalence of surprise billing.
49
49
The effectiveness of such provisions in reducing surprise billing is tied to the extent to which
consumers can use the new information to decide whether to receive services from an out-
ofnetworkof-network provider (e.g., consider information utilization in emergency situations).
Notification
Notification
In the surprise billing context, consumer notifications typically are discussed as a way to provide
various pieces of information (e.g., about provider network status and estimates of related
financial responsibilities) to consumers prior to the receipt of services so consumers can make
informed decisions about their medical care providers. This type of requirement can apply to
insurers, providers, or both.
If considering a notification requirement, policymakers may want to identify what information
should be included within a notification requirement. For example, the notification may be
structured to include the provider
’'s and/or facility
’'s network status, the estimated costs of the
services, the provider
’'s ability to bill the consumer for amounts other than plan cost-sharing
amounts, or any other piece of information that policymakers feel needs to be provided to
consumers.
5050 In addition, policymakers may want to address who is responsible for providing the
notice to the consumer (i.e., insurer or provider), when the notice must be provided to the
consumer, and if and when the consumer must provide consent to the notice.
49
Although such requirements may reduce the prevalence of surprise billing, consumers who receive out-of-network
care, expectedly or unexpectedly, still may be balance billed or responsible for other consumer costs.
50 Many states require insurers to provide consumers with information in plan summaries regarding the financial
consequences of going out of network. Hoadley, Ahn, and Lucia, Balance Billing.
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Notice requirements should account for any limitations on the types of services and settings that
would be subject to such requirement and the consumer
’'s ability to use (and, where applicable,
consent to) such information (e.g., emergency situations or complications mid-procedure).
Furthermore, any notification requirement should account for whether the insurer or provider
subject to the notification requirement has access to the information that is required to be
included in the notice.
A notification requirement may be coupled with consumer financial liability protections. For
example, some federal proposals apply consumer financial liability protections in some surprise
billing situations (e.g., non-emergent care) only when a provider does not adhere to a
corresponding notification requirement.
Provider Directories
Provider Directories
Provider directories contain information for consumers regarding the providers and facilities that
are in a plan network. Provider directory requirements may fall on insurers and providers.
51
51 Insurers typically are responsible for developing and maintaining the directory; however, the
information used to populate the provider directory typically comes from the providers.
If considering provider directory requirements, policymakers may want to identify what
information is included in the directory, how the information is made available to the consumer
(e.g., posted on a website), and how often the directory needs to be updated or verified.
A provider directory requirement may be coupled with consumer financial liability protections. In
these instances, policymakers may consider how financial liability protections would interact with
provider directory requirements. For example, financial liability protections could be limited to
situations where a consumer receives services from a provider based on incorrect provider
directory information.
What Types of Requirements Could Be Placed on Insurers,
Providers, or Both?
In considering surprise billing proposals, there has been debate around how to shield consumers
from receiving unexpected and likely large bills from out-of-network providers that the consumer
did not have the opportunity to choose while balancing the impact of establishing a method for
ensuring payment for those services. Proposals to address surprise billing situations have
generally sought to address the lack of a contractual relationship between insurers and out-
ofnetworkof-network providers by establishing standards for determining the total provider payment and the
insurer payment net of specified consumer cost sharing. Other methods have sought to create
network requirements that would reduce the probability that a consumer would be treated by an
out-of-network provider at an in-network facility.
The following sections will discuss these different types of requirements.
How Could a Proposal Address Insurer and Provider Financial
Responsibilities in Surprise Billing Situations?
As discussed in the
“"Private Health Insurance Billing Overview
”" section, in general, payment for
out-of-network services depends on whether the plan covers out-of-network benefits. Regardless
51
There are some existing federal private health insurance provider directory requirements, which apply to insurers
offering plans on exchanges. 45 C.F.R. 156.230(b).
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of whether or not a plan provides out-of-network benefits, there is no contract establishing a set
payment rate between an insurer and an out-of-network provider. If an insurer provides out-
ofnetworkof-network benefits, the insurer determines the amount it will pay and the provider can balance bill
consumers. If an insurer provides no out-of-network benefits, the insurer will not pay anything
toward the out-of-network service. Both scenarios are subject to state and federal law that may
define the amount insurers pay out-of-network providers in certain situations (e.g., federal
requirements related to emergency services, state surprise billing laws).
Most federal proposals in the
116th116th Congress to address surprise billing situations include
provisions establishing methodologies for determining how much insurers must pay out-
ofnetworkof-network providers in specified surprise billing situations. To date, proposals have focused on two
main methods for determining the financial responsibility of insurers. One approach has been to
select a benchmark payment rate that would serve as the basis for determining a final payment
amount that a provider must be paid for a service. The other approach has been to establish an
alternative dispute resolution process, such as arbitration, with provider payment determined by a
neutral third party.
5252 The final payment amount determined by either approach may affect
consumer cost sharing to varying degrees based on a consumer
’'s plan. For example, under a plan
that has a coinsurance to determine a consumer
’'s cost sharing for a service, rather than a
copaymentco-payment, the amount that the consumer would be responsible for would depend on the final
payment rate for a service.
In addition to discussing the benchmark and arbitration approaches, this section includes a
discussion on using a bundled payment approach. In this approach, an insurer makes one
payment (net of cost sharing) to a facility, and that facility then is responsible for paying
providers practicing within the facility. Following that discussion will be a section on the
possibility of establishing network requirements to address surprise billing situations, including
network matching.
When considering a proposal that establishes a method for determining payment rates,
policymakers may want to consider a number of factors; these factors include, but are not limited
to, the potential effects on the financial viability of providers and the financial impact on health
insurers, which in turn may affect health insurance premiums. This may include consideration of
the cost and burden associated with establishing payment rates and the predictability of each
method for determining payment rates. In addition, policymakers may want to consider the extent
to which these payment models would apply uniformly to all types of plans, services, and/or
providers. The various options all have trade-offs, and the relative effect of a given proposal on
providers and insurers might vary depending on the local health care market structure. A full
assessment of the different choices is beyond the scope of the report.
Policy solutions for surprise billing situations that involve setting out-of-network payment rates
may have secondary effects that result from potential changes in relative leverage between
insurers and providers. For example, a proposal that would establish higher out-of-network rates
than in-network rates previously agreed upon between providers and insurers for certain services
may encourage some providers to go out of network or remain out of network to obtain the higher
rate. This may lead insurers to raise in-network rates for these services to incentivize providers to
join networks. If this response subsequently leads to higher average in-network rates as well as
out-of-network rates (along with increased out-of-network coverage), then it may result in higher
premiums in the market. Conversely, if the proposal lowers out-of-network payment rates below
52
With respect to alternative dispute resolution, this report will focus on arbitration. Another type of alternative dispute
resolution is mediation. The state of Texas passed a law that requires providers and insurers to use a mediation process
to settle payment disputes for surprise bills over $500.
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in-network rates previously agreed upon between providers and insurers, the proposal may
increase the amount of leverage insurers have when negotiating with providers for network
inclusion, creating downward pressure on in-network payment rates.
Benchmark Approach
Benchmark Approach
Federal surprise billing proposals that use a benchmark approach involve tying payment to a
reference price, such as Medicare rates or market-based private health insurer rates. A
benchmark-based surprise billing proposal would be structured to specify one or more
benchmarks and a methodology for calculating a final payment rate.
53
53
Medicare as a Benchmark
Some recent federal proposals would require insurers to pay an out-of-network provider a rate
tied to the payment for that service under Medicare. Studies have shown that Medicare rates for
physician services provided by specialists most often involved in surprise billing situations (e.g.,
pathology, anesthesiology, radiology) generally are lower than commercial rates paid by insurers
in the private health insurance markets.
5454 Policymakers seeking to adjust for the differences
between Medicare and commercial rates may structure payment as a percentage of Medicare
rates. For example, some surprise billing state laws establish private health insurance rates for
certain services at Medicare plus an added percentage.
55
55
Market-Based Benchmark
As compared with a Medicare benchmark approach, a market-based benchmark approach may
raise different questions that need to be considered in order to determine the most appropriate
reference price on which to base payment. Determining the market data that will provide the
foundation for a benchmark for out-of-network
payment rates is critical, as the effect may go
beyond setting out-of-network payment rates. The distribution of data, which can vary, may have
an anchoring effect on the negotiation of in-network payment rates. For example, a proposal that
relies on a benchmark that would result in out-of-network payment rates below current
innetworkin-network payment rates for some providers may shift the negotiating leverage in favor of insurers,
which may then use the threat of the lower out-of-network rate to negotiate lower in-network
rates. If a proposal results in higher out-of-network payment rates than in-network payment rates
for some providers, the leverage to negotiate will shift toward providers, who may demand higher
in-network payment rates.
Policymakers may need to decide whether to base the benchmark on provider charges or insurer
payment rates. Provider charges are the amounts that providers charge a consumer and/or insurer
for a furnished service. These amounts generally will be higher than the negotiated amounts,
because they do not include any discount negotiated between insurers and providers. There are no
53
The Massachusetts Health Policy Commission evaluated Massachusetts claims data to produce a study that illustrates
how payments to Massachusetts providers for certain services would vary under different benchmarks. Massachusetts
Health Policy Commission, The Price is Right? Variation in Potential Out-of-Network Provider Payment Benchmarks,
August 14, 2019, at https://www.mass.gov/files/documents/2019/08/12/Datapoints_OON.pdf.
54 Daria Pelech, An Analysis of Private-Sector Prices for Physicians Services, Congressional Budget Office, Working
Paper 2018-01, January 2018, at https://www.cbo.gov/publication/53441, Erin Trish et al., “Physician Reimbursement
in Medicare Advantage Compared with Traditional Medicare and Commercial Health Insurance,” JAMA Internal
Medicine, vol. 177, no. 9 (September 2017), pp. 1287-1295, at
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5710575/.
55 As an example, the state of California established a payment standard requiring insurers to pay the greater of the
average contracted rate for a service or 125% of Medicare.
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because they do not include any discount negotiated between insurers and providers. There are no federal proposals that rely on provider charges as a benchmark for setting payment for services
provided by out-of-network providers. There are federal proposals using a benchmark approach
that rely on private insurer in-network payment rates.
Insurer payment rates could be specified as an insurer
’s 's usual, customary, and reasonable (UCR)
rates or as an insurer
’'s in-network contracted rates. UCR rates are a method that insurers use to
determine payment to providers for out-of-network services if a plan provides out-of-network
benefits. Insurers have discretion over how UCR rates are calculated, and such determinations
vary from insurer to insurer. In-network contracted rates are the payment rates determined either
through negotiation between insurers and providers for in-network services or based on a fee
schedule developed by an insurer; a provider must agree to this fee schedule for inclusion in the
insurer’ insurer's network.
Once policymakers establish whether a proposal uses provider charges or insurer payment rates,
they may specify a methodology for determining the final payment rate. For example, a policy
proposal may specify a mean, a median, a percentage, or a percentile of the benchmark rate. The
most appropriate metric will depend on the underlying distribution of the benchmark data being
used and how the resulting payment rate compares with current in-network and out-of-network
rates.
56
56
To the extent that a benchmark is based on market-based rates, policymakers may want to
consider whether to limit the rates included in the benchmark to a specific geographic area to
account for the variations in the underlying cost of health care services in different communities.
However, a geographic region that is too large may not account for the discrepancies between
markets within the region—for example, rural and urban health care costs—and a geographic
region that is too small may result in situations where only one particular provider or insurer is
included.
Policymakers also may want to consider whether to set a benchmark based on current payment
data or on historical payment rates combined with an inflation factor. Using historical rates may
mitigate potential fluctuations in in-network rates in response to implementing a surprise billing
approach, including changes in network strategies by insurers or providers looking to influence
future payments. However, using historical rates may not, depending on the data used, account
for material changes in a local health care market (e.g., changes in technology, market
consolidation, etc.).
Finally, there may be situations in which an insurer does not have the appropriate data to
determine payment rates under a market-based benchmark. For example, an insurer that is a new
entrant to a market will not have established in-network payment rates for past years. In such a
case, the new entrant may have to rely on public or privately run databases that aggregate
payment rate data of other insurers in a market to determine an average in-network rate for a
particular provider type in a particular geographic area. Given such a situation, policymakers may
want to consider whether to specify a source of data, whether public or private, for reference
prices an insurer may use to calculate payment rates or a set of standards for databases that an
insurer may use to establish payment rates. The quality and breadth of the data may affect the
degree to which reference prices accurately represent the market and population. Currently, there
is no universal source of data for all market types and insurers. Some states operate all-payer
claims databases (APCDs); of the states that have APCDs, a subset of the APCDs are voluntary
56
Massachusetts Health Policy Commission, HPC Datapoints: The Price is Right? Variation in Potential Out-ofNetwork Provider Payment Benchmarks, August 14, 2019.
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initiatives that may not collect data from all insurers in the state.
5757 However, state APCDs cannot
require the collection of data from self-insured group health plans.
58
Multiple Benchmarks
58
Multiple Benchmarks
Proposals may specify multiple benchmarks. In these types of proposals, multiple benchmarks
may be used to establish guardrails (i.e., a floor or a ceiling) to counterbalance the potential
anchoring effects of a single benchmark discussed earlier.
There are different methodologies for determining which benchmark would apply in a surprise
billing situation. The methodology may involve choosing whether the payment should be based
on the greatest or least among the various benchmarks. If using a greatest of approach, then the
insurer would be responsible for paying a rate to a provider based on the benchmark that results
in the highest payment rate among the various specified benchmarks. A least of approach would
make an insurer responsible for paying a provider a payment rate that is based on the benchmark
that results in the lowest payment rate among the various specified benchmarks. For example, an
insurer may be required to pay a provider a percentile of UCR or, at a minimum, a percentage of
Medicare.
Alternative Dispute Resolution
Some federal surprise billing proposals from the
116th116th Congress have considered an alternative
dispute resolution process, such as arbitration. In an arbitration model, the provider and the
insurer would submit proposals for payment amounts to a neutral third party. The third party
would then determine, on a case-by-case basis, the total amount to be paid to the provider, which
would include the insurer payment and the consumer cost sharing. The cost-sharing parameters
would be determined under the proposal, not by the arbitrator, and would depend on the
costsharingcost-sharing structure of the consumer
’'s health plan. However, the rate set by the arbitrator can affect
the amount paid by the consumer. The arbitration model might provide more flexibility than the
benchmark in that payment would not be fixed based on a reference price. However, it might
involve more administrative costs to determine payment rates on a case-by-case basis and would
provide less predictability regarding payment rates for out-of-network services.
As arbitration relies on a third party to decide payment, proposals typically establish criteria for
determining who may act as an arbitrator. Criteria may include a conflict-of-interest standard to
ensure the third party does not have an interest in the process
’'s outcome.
Policymakers also may want to consider whether to establish standards for when insurers or
providers may elect arbitration. Standards may be structured to require a minimum amount of
time after a provider has billed for a service before either the provider or the insurer may seek
arbitration to settle a payment dispute. This approach would afford providers and insurers an
opportunity to negotiate a payment rate.
In addition to a time requirement, policymakers seeking to limit resources expended on
arbitration may consider establishing a threshold requirement to prohibit providers and insurers
from seeking arbitration for charges under a certain dollar amount. If a proposal does not include
a threshold requirement, then providers and insurers would be able to seek arbitration for any
surprise billing payment dispute. The requirement may be structured to provide a specific
57
Not all states have established state all-payer claims databases (APCDs). All-Payer Claims Database Council,
Interactive State Report Map, at https://www.apcdcouncil.org/state/map.
58 States that have established APCDs do not collect data on plans preempted from state regulation by the Employee
Retirement Income Security Act (ERISA). Gobeille v Liberty Mutual Insurance Co. 136 S. Ct. 936 (2016).
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amount, which may include a method for adjusting the amount year to year to account for
inflation. Alternatively, policymakers could choose to provide authority to agencies to establish a
method for determining the threshold amount.
If a threshold requirement is set in a way that prohibits parties from seeking arbitration below a
certain dollar amount, then policymakers may want to consider how to address payment for
amounts under the threshold. A proposal could be structured to require insurers to pay any
charges under the threshold amount, or a benchmark, as described earlier, could be used on a
limited basis for any charged amounts under the threshold.
Once it is determined who may seek arbitration for a surprise billing dispute, policymakers may
want to consider how to structure the arbitration process, including how an arbitrator decides
payment. One possible approach, taken by the state of New York, would be to institute a
baseballstylebaseball-style arbitration process in which each party submits its best and final offer to the arbitrator, who
then decides which offer to accept as the final payment rate. Another possibility would be to
provide the arbitrator with the flexibility to decide a final payment rate that may differ from the
proposals submitted by the parties to the arbitration. Regardless of the flexibility given to the
arbitrator, policymakers may want to consider specifying factors that the arbitrator should take
into account when making a final decision.
Hybrid Approach
Hybrid Approach
It is possible to combine the benchmark and arbitration approaches. For example, in response to
stakeholder concerns regarding the use of particular methods for determining final payment
amounts, some states and one federal proposal pair the use of a benchmark with the option of
arbitration if either party is not satisfied with the payment rate established by the benchmark.
59
59 Another hybrid approach could involve establishing an arbitration process in which the arbitrator
picks one amount from a list of benchmarks to establish a final payment rate.
Bundled Payment Approach
Some researchers have proposed a bundled payment approach as an alternative to establishing
how much an insurer must pay directly to an out-of-network provider.
6060 Instead of regulating the
relationship between an insurer and the out-of-network provider, a bundled payment approach
would focus on the insurer and the facility in which the service was provided. An insurer would
make one payment to the facility, after which the facility would be responsible for paying
providers for services provided in the facility. Instituting a bundled payment would shift the onus
from the out-of-network provider to the facility to negotiate with the insurer for a bundled rate. It
would then be the facility
’'s responsibility to negotiate with the providers for payment of services
provided within the facility. Currently, no federal proposals or state laws use a bundled payment
approach to address surprise billing.
59
The federal proposal is Title IV of the Amendment in the Nature of a Substitute to H.R. 2328 (as offered by Rep.
Pallone), 116th Cong. (2019). Jack Hoadley, Kevin Lucia, and Maanasa Kona, States Are Taking New Steps to Protect
Consumers from Balance Billing, But Federal Action is Necessary to Fill Gaps, The Commonwealth Fund, at
https://www.commonwealthfund.org/blog/2019/states-are-taking-new-steps-protect-consumers-balance-billing-federalaction-necessary.
60 Cooper, Scott Morton, and Shekita, Surprise!
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approach to address surprise billing.
How Could a Proposal Address Network Requirements?
An alternative to focusing on payment for out-of-network services would be to reduce the
probability that consumers would inadvertently receive care from out-of-network providers. An
alternative to setting a benchmark or establishing an arbitration process would be to set network
requirements.
Network Adequacy Requirements
Network adequacy is a measure of a plan
’'s ability to provide access to a sufficient number of
innetworkin-network providers, including primary care and specialists. In the individual and small-group
markets, states have been the primary regulator of plan networks and have network adequacy
standards for most health insurance plans. The ACA created a federal network adequacy
standard.
6161 However, the federal government defers to states to enforce network adequacy
standards.
6262 Self-insured plans are not subject to network adequacy standards.
Instituting stricter network adequacy standards (i.e., requiring plan networks to include a larger
number of providers of varying types) may not address all surprise billing situations. Unless
network adequacy standards require all providers to be in network, they do not guarantee that
insurers will contract with every provider that a consumer may see, especially in situations where
a consumer travels outside the plan
’'s service area.
63
Network Matching
63
Network Matching
Some researchers have proposed another network-based approach, referred to as
network
matchingnetwork matching, which would involve the creation of an in-network guarantee to address surprise billing
situations in which consumers receive care from out-of-network providers in in-network
facilities.
6464 An in-network guarantee would ensure that a facility and the providers practicing in
that facility contract with the same insurers to be included in the same networks. However,
surprise bills might still occur in the case of emergency services, when consumers may not have
the option to choose an in-network facility, especially when a consumer travels outside the
service area of his or her health plan. No current federal proposals or state laws use a network
matching approach to address surprise billing.
An in-network guarantee could be structured in a few ways. Policymakers could create an
innetworkin-network guarantee that applies to insurers and would prohibit insurers from contracting with a
facility unless the facility guaranteed that all providers practicing in the facility would contract to
be in the same networks as the facility.
Another way to structure an in-network guarantee would be to prohibit the insurer from paying
out-of-network providers for any services provided to the consumer in an in-network facility.
61
45 C.F.R. 156.230.
CMS, 2019 Letter to Issuers in the Federally Facilitated Exchanges, April 9, 2018, at
https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/2019-Letter-to-Issuers.pdf.
63 Garmon and Chartock, “One in Five.” Munira Z. Gunja et al., Americans’ Experiences with ACA Marketplace
Coverage: Affordability and Provider Network Satisfaction, The Commonwealth Fund, July 2016, at
https://www.commonwealthfund.org/sites/default/files/documents/___media_files_publications_issue_brief_2016_jul_
1883_gunja_americans_experience_aca_marketplace_affordability_v2.pdf. Mark A. Hall and Paul B. Ginsburg, A
Better Approach to Regulating Provider Network Adequacy, USC-Brookings Schaeffer Initiative for Health Policy,
September 2017, at https://www.brookings.edu/wp-content/uploads/2017/09/regulatory-options-for-provider-networkadequacy.pdf.
64 Loren Adler, Matthew Fielder, and Benedic Ippolito, “Network Matching: An Attractive Solution to Surprise
Billing,” Health Affairs, May 29, 2019, at https://www.healthaffairs.org/do/10.1377/hblog20190523.737937/full/.
62
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out-of-network providers for any services provided to the consumer in an in-network facility. When paired with a prohibition on balance billing, a provider that was previously not incentivized
to be in network because of the possibility of higher out-of-network payments might be
incentivized to negotiate with an insurer to be included in plan networks to obtain payment
beyond consumer cost sharing.
How Could Surprise Billing Requirements Be Enforced?
To the extent a surprise billing proposal imposes any prohibitions or affirmative obligations on
the insurer, the provider, or both, a question remains as to how to enforce any such limits or
requirements. The current legal framework for enforcing discrete requirements for insurers and
providers may be a template for Congress to consider when drafting surprise billing legislation.
Potential enforcement mechanisms include authorizing the Secretary of Health and Human
Services (HHS) and/or the Secretary of Labor—depending on the plan
type65type65—to bring
enforcement actions or allowing private entities to seek a right of action in a court against a
regulated entity.
6666 An enforcement scheme also may attach specified statutory penalties to a
violation of the statute.
6767 Depending on whether a surprise billing proposal amends an existing
statute, these options may be included as the principal enforcement mechanism or could be added
to supplement any existing enforcement schemes.
Current Enforcement Mechanisms on Private Health Insurance Issuers
A number of federal surprise billing proposals would amend provisions (including the emergency
services provision) under Part A of Title XXVII of the Public Health Service Act (PHSA).
6868 This
part of the PHSA, as amended by the ACA, was incorporated by reference into Part 7 of the
Employee Retirement Income Security Act (ERISA) and Chapter 100 of the Internal Revenue
Code (IRC).
6969 As a result, these three statutes
’' existing enforcement mechanisms may be relevant
to any additional prohibitions or requirements added to Part A of Title XXVIII of the PHSA by a
surprise billing proposal. Existing enforcement provisions under these statutes currently apply
only to insurers and not to providers.
70
70
Public Health Service Act
In general, the existing enforcement provisions for Title XXVII of the PHSA
’'s requirements
apply to health insurance issuers in the group and individual markets and to self-funded
nonfederal governmental group plans.
7171 With respect to health insurance issuers, states are the
primary enforcers of the PHSA
’'s requirements.
72 If the HHS Secretary determines that a state has
65
The Department of Labor would be responsible for enforcing regulations on plans regulated under ERISA (i.e., selffunded plans). The Department of Health and Human Services (HHS) would be responsible for implementation and
enforcement when regulating health plans under the Public Health Service Act (PHSA), including fully insured plans in
the individual and small-group markets.
66 See, for example, 42 U.S.C. §§1320a-7a(c) and 1395dd(d)(2).
67 See, for example, 42 U.S.C. §1395dd(d)(1).
68 See, for example, S. 3592, 115th Cong. (2018); S. 1531, 116th Cong. (2019).
69 See 29 U.S.C. §1185d; 26 U.S.C. §9815.
70 See 42 U.S.C. §300gg-22; 29 U.S.C. §1132; 26 U.S.C. §4980D.
71 42 U.S.C. §300gg-21(a)(1).
72 42 U.S.C. §300gg-21(a)(1). Title XXVII of the PHSA also applies to nonfederal governmental group plans. See
§300gg-21(a)(2). The Secretary of HHS is the primary enforcer of the PHSA requirements as to these governmental
plans. See §300gg-22(b)(1)(B). Prior to enactment of the ACA, these governmental plans could elect to exempt their
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72 If the HHS Secretary determines that a state has failed to substantially enforce a provision of Title XXVII of the PHSA with respect to health
insurance issuers in the state,
7373 or if a state informs the Secretary that it lacks the authority or
ability to enforce certain PHSA requirements, the Secretary is responsible for enforcing these
provisions.
7474 In the event that federal enforcement is needed, the HHS Secretary may impose a
civil monetary penalty on insurance issuers that fail to comply with the PHSA requirements.
75
75 The maximum penalty imposed under PHSA is $100 per day for each individual with respect to
which such a failure occurs,
7676 but the Secretary has the discretion to waive part or all of the
penalty if the failure is due to
“"reasonable cause
”" and the penalty would be excessive.
77
77
Employee Retirement Income Security Act
Part 7 of ERISA currently includes various requirements for (1)
group health plans, which
generally consist of both insured and self-insured plans providing medical care that an employer
establishes or maintains, and (2) health insurance issuers offering group health insurance
coverage.
7878 ERISA provides two general enforcement mechanisms for these requirements. First,
the Secretary of Labor may initiate a civil action against group health plans of employers that
violate ERISA, but the Secretary may not enforce ERISA
’'s requirements against health insurance
issuers.
7979 Second, Section 502(a) of ERISA authorizes a participant or beneficiary of a plan to
initiate certain civil actions against group health plans and health insurance issuers.
8080 Plan
beneficiaries may, for instance, bring actions against the plans to recover or clarify their benefits
under the terms of the plans.81
plans from certain requirements under Title XXVII of the PHSA. See §300gg-21(a)(2)(A). This opt-out election,
however, does not apply to the provisions added to the PHSA by the ACA. See §300gg-21(a)(2)(E).
73
Although the statute does not specify what a state needs to do in order to be considered “substantially enforcing” the
PHSA’s requirements, regulations outline the procedure the HHS Secretary must follow in making a determination as
to whether federal enforcement is needed. See 45 C.F.R. §§150.207 et seq. In general, if CMS, on behalf of the
Secretary, receives a complaint or other information indicating that a state is failing to enforce PHSA’s requirements, it
must assess the information received and consider whether the complainant had made reasonable efforts to exhaust
available state remedies. 45 C.F.R. §150.209. If CMS determines there is a reasonable question on whether there has
been a substantial failure to enforce, it would issue a written notice to the relevant state officials and provide the state
an opportunity to respond. 45 C.F.R. §150.213. If CMS makes a preliminary determination that the state has not
substantially enforced the PHSA, it would provide the state with a reasonable opportunity to correct such failure and
demonstrate evidence of enforcement. 45 C.F.R. §150.217. If the state cannot do so within the applicable timeline,
CMS would issue the state a written notice of its final determination that also identifies the PHSA requirements that
CMS would be enforcing. 45 C.F.R. §150.219.
74 42 U.S.C. §300gg-22(a)(2).
75 42 U.S.C. §300gg-22(b)(2)(C)(i).
76 42 U.S.C. §300gg-22(b)(2)(C)(i). With respect to self-funded government group plans, the HHS Secretary is the
primary enforcer of the PHSA requirements. 42 U.S.C. §300gg-21(a)(2)(A).
77 42 U.S.C. §300gg-22(b)(3)(E). As of April 8, 2016, Missouri, Oklahoma, Texas, and Wyoming have notified CMS
that they do not have the authority to enforce or are not otherwise enforcing the PHSA’s requirements pertaining to the
ACA’s insurance market reform provisions. See CMS, Center for Consumer Information & Insurance Oversight,
“Compliance and Enforcement,” at https://www.cms.gov/cciio/programs-and-initiatives/health-insurance-marketreforms/compliance.html (last accessed on July 12, 2019). CMS thus has the responsibility to enforce these provisions
in those states.
78 See 29 U.S.C. §1181.
79 29 U.S.C. §1132(b)(3).
80 29 U.S.C. §1132(a).
81 29 U.S.C. §1132(a)(1)(B).
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Internal Revenue Code
beneficiaries may, for instance, bring actions against the plans to recover or clarify their benefits under the terms of the plans.81
Internal Revenue Code
In general, the group health provisions in Chapter 100 of the IRC apply to all group health plans
(including church plans), but they do not apply to governmental plans and health insurance
issuers.
8282 Under the IRC, the group health plan requirements are enforced through the imposition
of an excise tax.
8383 Failure to comply with an IRC requirement generally would subject a group
health plan to a tax of $100 for each day in the noncompliance period with respect to each
individual to whom such failure relates.
8484 Limitations on a tax may be applicable under certain
circumstances (e.g., if the person otherwise liable for such tax did not know, and exercising
reasonable diligence would not have known, that such violation existed).
8585 Failure to pay the
applicable excise tax may result in further penalties, and a dispute regarding any penalty
liabilities may be resolved by a proceeding before a U.S. district court or the Court of Federal
Claims.
86
86
Current Enforcement Mechanisms on Providers
As noted above, the PHSA, ERISA, and IRC currently do not include enforcement provisions that
apply to providers; instead, the applicable statutes impose requirements on only the relevant
group health plans and health insurance issuers.
8787 Indeed, because the regulation of medical
providers is traditionally within the province of the states, federal law has generally limited its
role in regulating providers to specified circumstances.
8888 To the extent any federal requirements
are imposed on providers, the requirements generally are enforced through provisions specific to
the applicable regulatory framework.
8989 The enforcement provisions applicable to federal health
care programs (including Medicare and Medicaid), for instance, authorize the HHS Secretary to
initiate enforcement proceedings against any person (including a health care provider) for certain
specified violations, including the submission of improperly filed claims and the improper offer
or acceptance of payments to reduce the provision of health services.
9090 Violators may be subject
to civil penalties, be excluded from further participation in federal health programs, or both.
91
Thus, to the extent a surprise billing proposal would impose specific limits or requirements
82
See 26 U.S.C. §§9801, 9832(a), 5000(b)(1).
26 U.S.C. §4980D.
84 26 U.S.C. §4980D.
85 See 26 U.S.C. §4890D(c).
86 See 26 U.S.C. §§6671-6672.
87 See footnotes 71, 78 & 82.
88 See, for example, Lars Noah, Ambivalent Commitments to Federalism in Controlling the Practice of Medicine, 53
Univ. Kan. L. Rev. 149, 149-50 (2004).
89 See footnotes 90 & 91.
90 42 U.S.C. §1320a-7a(a) & (b).
91 42 U.S.C. §1320a-7a(c). Other examples of federal regulations on health care providers may be found under the
Controlled Substances Act (CSA) and the Federal Food, Drug & Cosmetic Act (FD&C Act). The CSA imposes certain
registration, recordkeeping, and other requirements on health care providers and other “registrants” as part of its
regulatory framework governing the manufacture, distribution, and use of certain controlled substances (including
prescription drugs). 21 U.S.C. §822(a). The CSA generally enforces these regulatory requirements through civil
penalties. 21 U.S.C. §842(c). Certain “knowing” violations may subject a violator to imprisonment of up to two years.
21 U.S.C. §842(c)(2). Under the FD&C Act, the Federal Drug Administration (FDA) may require certain new drugs or
biologics to be subject to a distribution safety protocol known as Risk Evaluation and Mitigation Strategies (REMS),
which may impose certain dispensing or prescriber requirements on health care providers. See 21 U.S.C. §355-1(e) and
(f). Violation of REMS requirements may subject a provider to an FDA enforcement action and civil penalties. See 21
U.S.C. §355(p), 21 U.S.C. §311(a) & (d).
83
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91 Thus, to the extent a surprise billing proposal would impose specific limits or requirements directly on providers, policymakers may want to consider enforcement provisions specific to
those regulatory requirements.
Consistent with this approach, many federal surprise billing proposals to date—particularly if
they would amend Part A of Title XXVII of the PHSA—include enforcement provisions that
would apply specifically to providers in this context.
9292 The proposals generally would limit the
application of these enforcement provisions to providers who have not been subject to an
enforcement action under applicable state law.
93
93
How Could a Federal Surprise Billing Proposal Interact with State
Surprise Billing Laws?
As discussed in the
“"State Requirements
”" section of this report, many states have enacted laws
that address surprise billing in various situations and incorporate different policies discussed
throughout this report. Given the likely overlap between state laws and any potential federal laws,
policymakers may want to consider how federal surprise billing policies should interact with
related state laws. In other words, policymakers may want to determine which laws are applicable
in situations addressed by both federal and state laws. They may opt to have federal law defer to
state law, have federal law preempt state law, or some combination thereof. To date, many federal
proposals have included language that would maintain state surprise billing laws and would apply
federal law only in instances where states do not have such laws.
In the event that a federal surprise billing law would provide deference to state surprise billing
laws, it may be worth considering how such deference would be provided. For example, a federal
proposal that addresses ambulances may be drafted so that federal law does not apply in any state
with any type of surprise billing law, regardless of whether such state law addresses ambulances.
As mentioned earlier in this report, state surprise billing laws have varied in their application to
different situations and/or providers, and some states have only applied surprise billing laws and
regulations to a narrow set of situations. For example, surprise billing protections in Arizona,
Massachusetts, Missouri, New Hampshire, and Oregon apply only for emergency services
provided by an out-of-network provider at in an in-network hospital.
9494 Therefore, this type of
federal ambulance surprise billing law would not apply in those states.
It is also possible that a federal surprise billing law would apply only to services, situations, and
plans that have not been addressed by state surprise billing laws (or have been addressed in a
manner that does not satisfy criteria included within such proposal). This type of policy would
likely result in multiple different ways to handle surprise billing situations within a state. For
example, fully insured plans could be subject to state laws and self-insured plans could be subject
to federal laws.
95 As a result, enrollees of different types of plans may have different protections
92
See, for instance, S. 1895, Section 102(b) creating PHSA Section 2795(a). This provision would impose a civil
monetary penalty of no more than $10,000 on a provider for violating certain prohibitions and requirements under the
bill and would authorize the HHS Secretary to initiate enforcement actions against a provider.
93 See, for instance, S. 1895, Section 102(b) creating PHSA Section 2795(c)(3). This provision would direct the HHS
Secretary to waive the penalties under the bill if the provider has already been subject to enforcement action under
applicable state law for a violating conduct.
94 Kona, State Balance Billing Protections.
95 As discussed in “Federal and State Regulation of Insurance” in this report, states are precluded from being able to
regulate self-insured health plans and therefore have not been able to require that such plans adhere to state surprise
billing requirements. However, at least one state (New Jersey) has allowed self-insuring entities to opt in to such
requirements. It is unclear the extent to which self-insuring entities within the state have opted in. P.L. 2018, Chapter
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95 As a result, enrollees of different types of plans may have different protections in surprise billing situations.
9696 The extent of the aforementioned discrepancy would correspond to
the extent to which state residents are enrolled in a self-insured plan. For reference, in 2017,
Hawaii had the lowest percentage of private sector employees enrolled in a self-insured plan at an
employer offering health insurance coverage (31.2%) and Wyoming had the highest percentage
(72.4%).
9797 The national average was 59.4% in 2017.
98
98
This difference can also be highlighted in the context of the interactions between surprise billing
protections in Arizona, Massachusetts, Missouri, New Hampshire, and Oregon, which apply only
for emergency services provided by an out-of-network provider at in an in-network hospital, and
a hypothetical federal policy that applies to emergency services generally and provides deference
to state laws. In this example, state law would apply to emergency services provided by an out-
ofnetworkof-network provider at an in-network hospital and federal law would apply to emergency services
provided by an out-of-network provider at an out-of-network hospital.
Considering that a surprise billing federal policy would affect insurers, providers, or both and
could alter these parties
’' incentives to enter into network agreements together (see
“Potential
"Potential Policy Impacts
”"), the combination of a federal policy with varying state policies would likely
result in a unique set of incentives for insurers and providers within each state.
By contrast, a federal surprise billing law may be structured so that state deference is not
provided. Under this type of proposal, a federal surprise billing law would be uniformly
applicable to all states, regardless of previous state surprise billing legislative action.
In addition to considering the relationship between state and federal surprise billing laws,
policymakers may want to incorporate policies that provide states with opportunities to tailor a
federal proposal. For example, a federal policy could allow states to select the benchmark
parameter used for plan payments out of a list included in the federal policy, or a federal policy
could allow states to further determine the information included in a notification requirement.
Such provisions would provide states with the ability to determine how best to incorporate federal
policies given the relationship structure between insurers, providers, and consumers within that
state.
Potential Policy Impacts
Since policy decisions rarely occur in a vacuum, many of the aforementioned policy
considerations directly affect one (or multiple) aspects of the billing process.
These impacts can be considered narrowly, by looking at how specific actors (i.e., insurers,
providers, and consumers) may respond to such policy considerations. For example, consider the
effects of a federal policy that (1) establishes a benchmark reimbursement rate that is lower than
32, approved June 1, 2018. Assembly No. 2039, at https://www.njleg.state.nj.us/2018/Bills/AL18/32_.PDF.
96 In addition, to the extent that a state applies different surprise billing policies on health maintenance organization
(HMO) plans and preferred provider organization (PPO) plans, there could be additional discrepancies. For example, as
of July 31, 2019, Indiana, Rhode Island, and West Virginia applied surprise billing protections only to HMO plans.
Kona, State Balance Billing Protections.
97 Agency for Healthcare Research and Quality, Table II.B.2.b.(1), “Percent of Private-Sector Enrollees That Are
Enrolled in Self-Insured Plans at Establishments That Offer Health Insurance by Firm Size and State: United States,
2017,” in Medical Expenditure Panel Survey-Insurance Component, at,
https://meps.ahrq.gov/data_stats/summ_tables/insr/state/series_2/2017/tiib2b1.pdf. Hereinafter, Agency for Healthcare
Research and Quality, “Percent of Private-Sector Enrollees.”
98 Agency for Healthcare Research and Quality, “Percent of Private-Sector Enrollees.”
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effects of a federal policy that (1) establishes a benchmark reimbursement rate that is lower than what insurers currently typically pay out-of-network providers for a specific service provided to
consumers and (2) prohibits balance billing.
From the insurer
’'s perspective, an insurer may decide to lower premiums for plans that cover
outofout-of-network benefits if its net payments to providers decrease after adjusting for any changes in
consumer cost sharing under the policy. Relatedly, to the extent that such policy requires insurers
to cover a portion of other consumer costs for specific services, insurers may choose to increase
premiums on plans that do not cover out-of-network benefits to cover these additional costs.
From the provider perspective, impacted out-of-network providers may see a reduction in revenue
from the lower payment rate and the prohibition on balance billing consumers for those services.
The provider also may see a reduction in the administrative costs associated with being an out-
ofnetworkof-network provider (e.g., costs associated with communicating with and collecting payments from
numerous consumers and/or insurers, costs associated with failure to collect payments from
consumers). Depending on the extent to which the provider is affected, the provider may respond
to this example federal policy by adjusting the prices of other services not affected by the policy
or adjusting what services are offered.
A different surprise billing policy that would establish an arbitration process could create greater
administrative costs for insurers and providers. These costs could subsequently be incorporated
into premium prices or provider charges for services.
99
99
Policy impacts also can be considered more generally by identifying how these policies could
alter the relationships between insurers, providers, and consumers. For example, policies that
require insurers to pay providers specified amounts for out-of-network services might affect
contract negotiations between insurers and providers.
If a proposal required insurers to pay out-of-network providers their median in-network rate for
services, insurers might be incentivized to reduce rates for those providers earning above the
median amount or be less likely to contract with such providers during subsequent contract
negotiations. If insurers did not contract with such providers, the provider would be considered
out of network and the plan would pay providers the plan
’'s median rate for services included in
the surprise billing proposal. Inversely, providers earning below the median rate might be likely
to demand increased payment rates or to consider dropping out of the network, the latter of which
would result in those providers also being paid at a plan
’'s median rate. Together, if insurers and
providers responded accordingly, a plan
’'s payment rates for the specified services included in a
surprise billing proposal would move to the median rates for both in-network and out-of-network
providers.
If a proposal required insurers to pay out-of-network providers based on an arbitration model
(i.e., dispute resolution process), then some providers that furnish specialized services or work on
complex cases might be more likely to demand increased payment rates. This could occur
because these providers would otherwise be more likely to receive results that are more favorable
as an out-of-network provider participating in an arbitration process that considers the extent of
the provider
’s expertise and the complexity of each case.
99
Although a surprise billing policy that would establish a benchmark approach also would create administrative costs
for insurers, the Congressional Budget Office (CBO) has estimated that insurer administrative costs associated with a
benchmark approach would be smaller than insurer administrative costs associated with complying with an arbitration
process. “Title IV, No Surprises Act” section of CBO score of H.R. 2328. Congressional Budget Office, H.R. 2328,
Reauthorizing and Extending America’s Community Health Act, September 18, 2019, at
https://www.cbo.gov/system/files/2019-09/hr2328.pdf. Hereinafter, CBO, H.R. 2328, Reauthorizing and Extending
America’s Community Health Act.
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's expertise and the complexity of each case.
The Congressional Budget Office (CBO) estimated the net effects of these types of policies on
insurance premiums and the related effects on the federal budget in its scoring of two surprise
billing bills from the
116th116th Congress (S. 1895 and H.R. 2328, which are compared in the
Appendix).100
Appendix).100
As implied by the policy impacts of these types of proposals on premiums, different policies also
could have varying effects on national health expenditures. For example, the surprise billing
proposal that required insurers to pay out-of-network providers their median in-network rate for
services likely would reduce the aggregate dollar amount of private health insurance spending on
out-of-network care relative to current law. This shift likely would occur even if consumers
utilized the same amount of services, because
“"median rates are generally lower than the current
overall average rates.
”101"101 Future health expenditures also could grow slower than what is
expected under current law if such a benchmark were indexed to an inflationary rate that is
generally smaller than the rate of growth for provider rates. Relative to a benchmark-type policy
that is tied to median in-network rates, an arbitration model policy likely would result in greater
heath expenditures because arbitration would likely affect the negotiation of in-network rates. The
potential threat of arbitration may afford certain providers increased leverage during the
negotiation of in-network rates.
102102 However, the total effect of such policies on national health
expenditures would be contingent upon the percentage of expenditures affected by the federal
policies.
The discussion of the aforementioned policies should not be interpreted as likely effects of
all
all benchmark or
allall arbitration type policies. For example, a benchmark rate set at median rates
would have different effects than a benchmark rate set at billed charges.
Although comprehensive studies of state surprise billing laws are limited, there is anecdotal
evidence of the impacts of such laws. For example, the effects of implementing a payment
methodology were anecdotally evident in California, where a law required insurers to pay certain
out-of-network providers the greater of the average contracted rate or an amount equal to 125%
of the Medicare fee-for-service (FFS) rate. As a result, at least some insurers took the position
that
“"providers should either accept a lower contract rate or not contract and, potentially, receive
only 125% of Medicare FFS rates.
”103
"103
A related example involves insurer responses to a Colorado surprise billing law that required
insurers to pay the in-network payment rates for services furnished to enrollees of managed care
plans by out-of-network providers at in-network facilities. A subsequent state survey of insurers
regarding the implementation of the surprise billing law highlighted that certain insurers felt that
“ "out-of-network providers [were] encouraged not to join networks because they will receive
innetworkin-network payment regardless
”" and
“"hospital-based physicians had greater leverage when
negotiating contracts with managed care plans.”104
100
Other aspects of the bills are estimated to have additional impacts on providers and insurers. See CBO, H.R. 2328,
Reauthorizing and Extending America’s Community Health Act and Congressional Budget Office, S.1895, Lower
Health Care Costs Act, July 16, 2019, at https://www.cbo.gov/system/files/2019-07/s1895.pdf (hereinafter, CBO,
S.1895, Lower Health Care Costs Act.)
101 CBO, H.R. 2328, Reauthorizing and Extending America’s Community Health Act, and CBO, S.1895, Lower Health
Care Costs Act.
102 CBO, H.R. 2328, Reauthorizing and Extending America’s Community Health Act.
103 California Office of Administrative Law, Register 2018, No. 31−Z, August 3, 2018, pp. 1225, 1227-1228, at
https://oal.ca.gov/wp-content/uploads/sites/166/2018/08/31z-2018.pdf.
104 Colorado Department of Regulatory Agencies, Report of the Commissioner of Insurance to the Colorado General
Assembly on 10-16-704(3), C.R.S. Consumer Protections Against Balance Billing, January 21, 2010, p. 8, at
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negotiating contracts with managed care plans."104
The Colorado law did not affect all insurers equally. Of the 52 insurers that issued managed care
plans in the private health insurance market during the evaluation period and provided responses
to the survey, 7 carriers reported that the law had a positive effect on network adequacy, 20
carriers indicated no change, 21 carriers indicated a negative effect, and 4 carriers indicated
insufficient experience and time to evaluate the change.
105
105
Relatedly, New York implemented an arbitration-type surprise billing law (independent dispute
resolution, or IDR) for emergency physician services and other specified non-emergency services.
From 2015 to 2018, different provider types participated in the IDR process differently. For
example, plastic surgery providers submitted 40% of emergency service IDR disputes and
neurosurgery providers submitted 31% of the specified non-emergency service IDR disputes.
106
106
The Colorado and New York examples highlight the likelihood that a federal surprise billing
policy will affect individual actors within a market differently, which is the result of existing
dynamics between insurers and providers within each specific market (e.g., market concentration
and network participation).
107107 CBO accounted for this effect in its scoring of the two bills from
the 116th Congress.108 the 116th Congress.108 This idea is further compounded by the fact that each state has its own set
of regulations (potentially including surprise billing laws). Therefore, the effects of federal
surprise billing proposals also will have varying impacts on insurers and providers across states.
http://hermes.cde.state.co.us/drupal/islandora/object/co%3A8599/datastream/OBJ/view.
105 Colorado Department of Regulatory Agencies, Report of the Commissioner of Insurance to the Colorado General
Assembly on 10-16-704(3), C.R.S. Consumer Protections Against Balance Billing, January 21, 2010, p. 8, at
http://hermes.cde.state.co.us/drupal/islandora/object/co%3A8599/datastream/OBJ/view.
106 Linda A. Lacewell, New York’s Surprise Out-Of-Network Protection Law: Report on the Independent, New York
State Department of Financial Services, September 2019, at
https://www.dfs.ny.gov/system/files/documents/2019/09/dfs_oon_idr.pdf.
107 For example, in Texas in 2014, 56% of hospitals within Humana’s network did not have an emergency room
physician within the insurer network. This figure compared with a rate of 45% and 21% for United and Blue Cross,
respectively. Stacey Pogue and Megan Randall, Surprise Medical Bills Take Advantage of Texans, Center for Public
Policy Priorities, September 15, 2014, p. 3, at https://forabettertexas.org/images/HC_2014_09_PP_BalanceBilling.pdf.
108 CBO, H.R. 2328, Reauthorizing and Extending America’s Community Health Act, and CBO, S.1895, Lower Health
Care Costs Act.
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surprise billing proposals also will have varying impacts on insurers and providers across states.
Appendix. Side-by-Side Comparison of Selected
Federal Surprise Billing Provisions
This appendix provides a side-by-side comparison of surprise billing provisions included within
two federal bills that have gone through markup procedures. Specifically, the sections of the bills
included in the appendix are Title I of S. 1895 (Alexander), which went through a Senate
Committee on Health, Education, Labor, and Pensions markup session on June 26, 2019, and
Title IV of the amendment in the nature of a substitute (ANS) to H.R. 2328, which went through a
markup session held by the House Committee on Energy and Commerce on July 17, 2019.
The language from each bill summarized in this appendix addresses multiple medical billing
situations, such as services furnished at an in-network facility by out-of-network providers,
services related to an emergency medical condition, and/or air ambulance services. As each bill
addresses more than one type of situation, this appendix refers to different situations as
scenarios.
scenarios. For each proposal, different scenarios are identified numerically in the
“"Applicable Health
Services and Providers
”" row. Where applicable, each subsequent cell under a given proposal
refers back to the terminology used in the
“"Applicable Health Services and Providers
”" row to
indicate how a given requirement in the proposal applies to each scenario addressed within that
specific proposal. In some instances, the requirement may apply solely to one scenario, apply
differently across multiple scenarios, or apply similarly to all scenarios.
As an example, Title I of S. 1895 (Alexander) includes provisions regarding six scenarios,
including (1) emergency services provided by an out-of-network provider at an emergency
department of a hospital or freestanding emergency room and (2) ancillary services performed by
an out-of-network provider at an in-network facility if such services would have been covered
had they been provided in network. In the
“"Applicable Health Services and Providers
”" row for the
Title I of S. 1895 (Alexander) column, these scenarios are identified as Scenario 1
and Scenario 2 and Scenario
2, respectively (with additional scenarios listed accordingly). Subsequently throughout the Title I
of S. 1895 (Alexander) column, each reference to Scenario 1 discusses how that particular
requirement would apply to emergency services provided by an out-of-network provider at an
emergency department of a hospital or freestanding emergency room.
Consumer costs for the services addressed within each of the proposals are discussed in the
“ "Consumer Cost-Sharing
”" and
“"Other Consumer Costs
”" rows; a distinction that incorporates (1)
the aforementioned discussion (highlighted in Figure 1) around whether a plan does or does not
cover services provided by an out-of-network provider that would have been covered if provided
by an in-network provider and (2) whether a particular service is a covered benefit under the plan
irrespective of the network status of the provider (i.e., whether the service is considered an
excluded service).
109
109
When reading the appendix table, if the same language is used across the bills for a given feature,
it means the bills have language that is identical or substantively similar. However, there may be
underlying differences between the bills. For example, both bills create limits on consumer
costsharingcost-sharing requirements, but the actual requirements that would be affected (e.g., deductible,
copaymentco-payment) may vary between the bills, depending on how cost sharing is defined in either that bill
itself or the amending statute (for bill language that does not include a definition of the term).
This appendix table focuses on, and incorporates, language as included and defined in the
109
In the event that a consumer receives a service that is not covered by the plan, the consumer generally is responsible
for the entire bill, regardless of whether the service was provided by an in-network provider. Such amounts are also
considered other consumer costs.
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aforementioned bills. It does not compare or analyze differences between the bill languages as a
result of underlying statutory differences.
Each bill summary is based on a review of the provisions as drafted. If a given proposal lacks
specificity or includes inconsistencies, no assumptions were made to fill in gaps or resolve any
discrepancies.
Finally, the table does not address drafting errors or other technical issues within the proposals
(unless such errors required an interpretation to incorporate bill text into the table).
110110 The table
also does not address policy implications or identify potential unintended consequences.
110
Such interpretations are appropriately indicated within the table.
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Table A-1. Summary of Selected Provisions Addressing Surprise Billing Situations
Title I of S. 1895 (Alexander)
Title IV of the ANS to H.R.
2328a2328a (as offered by Rep. Pallone)
Summary of Key Requirements
|
Summary of Key Requirements
|
This proposal would explicitly prohibit balance billing by relevant providers and
would fine providers that balance bill consumers with private health insurance for
the following: (Scenario 1) emergency services provided by an out-of-network
provider at an emergency department of a hospital or freestanding emergency
room; (Scenario 2) ancillary services performed by an out-of-network provider at
an in-network facility if such services would have been covered had they been
provided in network; (Scenario 4) services provided to a consumer prior to
stabilization if such consumer previously received emergency services or maternal
care for a woman in labor in an emergency department of a hospital and was
subsequently admitted to the hospital; and (Scenario 6) air ambulance services from
an out-of-network provider if such services would have been covered had they
been provided in network.
In addition, this proposal would not allow balance billing if notification and consent
requirements are not met for the following: (Scenario 3) nonemergency,
nonancillarynon-ancillary services performed by an out-of-network provider at an in-network facility
if such services would have been covered had they been provided in network, and
(Scenario 5) any out-of-network services provided to a consumer post-stabilization
if such consumer previously received emergency services or maternal care for a
woman in labor in an emergency department of a hospital and was subsequently
admitted to the hospital.
This proposal would not prohibit balance billing if notification and consent
requirements are met for the following: (Scenario 3) nonemergency, non-ancillary
services performed by an out-of-network provider at an in-network facility if such
services would have been covered had they been provided in network, and
(Scenario 5) any out-of-network services provided to a consumer post-stabilization
if such consumer previously received emergency services or maternal care for a
woman in labor in an emergency department of a hospital and was subsequently
admitted to the hospital.
In situations where surprise billing is not allowed, this proposal would (1) generally
tie consumer cost-sharing requirements to what they would be if such services
were furnished in network and (2) require plans to pay providers an amount for
such items and services as determined according to a benchmark rate (median
innetworkin-network rate) established within the proposal or (where applicable) in accordance
with state law.
CRS-33
These scenarios do not make a distinction with respect to whether a plan covers out-of-network care and would apply requirements to a plan regardless of whether such plan covers or does not cover out-of-network benefits.
In some instances, this proposal limits its application to services that would have been covered by the plan had such services been provided in network (i.e., it would not apply to services that are not covered by the plan).
This proposal would explicitly prohibit balance billing by relevant providers and
would fine providers that balance bill consumers with private health insurance for
the following: (Scenario 1) emergency services provided by an out-of-network
provider, emergency department of a hospital, or independent freestanding
emergency department and (Scenario 2) specified nonemergency items or services
performed by an out-of-network provider during a visit at an in-network facility
where notification and consent requirements are not met.
This proposal would not allow balance billing if notification and consent
requirements are not met for (Scenario 2) specified nonemergency items or
services performed by an out-of-network provider during a visit at an in-network
facility.
In situations where surprise billing is not allowed, this proposal would (1) generally
tie consumer cost-sharing requirements to what they would be if such items or
services were furnished in network and (2) require plans to pay providers an
amount for such items and services as determined according to a benchmark rate
(median in-network rate) or, in limited situations, an amount established according
to an arbitration process established within the proposal. Where applicable, plan
payment would be determined in accordance with state law.
These scenarios do not make a distinction with respect to whether a plan covers
out-of-network care and would apply requirements to a plan regardless of whether
such plan covers or does not cover out-of-network benefits.
These scenarios would address services that would be covered by the plan if such
services were provided in network. It is unclear whether these scenarios would
address services that are not covered by a consumer
’s plan (i.e., excluded services).
Title I of S. 1895 (Alexander)
Title IV of the ANS to H.R. 2328a (as offered by Rep. Pallone)
These scenarios do not make a distinction with respect to whether a plan covers
out-of-network care and would apply requirements to a plan regardless of whether
such plan covers or does not cover out-of-network benefits.
In some instances, this proposal limits its application to services that would have
been covered by the plan had such services been provided in network (i.e., it would
not apply to services that are not covered by the plan).
Amendment(s) to Current Law
's plan (i.e., excluded services).
|
Amendment(s) to Current Law
|
This proposal would amend PHSA Section 2719A, which addresses plan
requirements relating to patient protections.
This proposal also would create new Sections 2719B, 2729A, 2795 of the PHSA.
This proposal would amend PHSA Section 2719A, which addresses plan
requirements relating to patient protections.
This proposal also would create new Sections 2799, 2799A, 2799B and 2799C, and
2799D of the PHSA.
Terms Explicitly Defined in Proposalb
Terms Explicitly Defined in Proposalb
This proposal would define the following terms: in network, enrollee, ancillary
services, median in-network rate, and facility.
c
c
This proposal would define the following terms: emergency department of a
hospital, emergency services, independent freestanding emergency department,
median contracted rate, nonparticipating emergency facility, participating emergency
facility, nonparticipating provider, participating provider, recognized amount, health
plan, participating health care facility, health care facility,
“"during a visit,
”" verification
process, response protocol, database, provider directory information, specified
provider, nonparticipating facility, participating facility, All Payer Claims Database,
specified claim, and qualifying items and services.
Applicable Health Services and Providers for Consumers with Applicable Coverage (see
“Applicable Plans” row)
"Applicable Plans" row)
Scenario 1: This proposal would apply to emergency services provided by an out-
ofnetworkof-network provider at an emergency department of a hospital or freestanding
emergency room.
Scenario 2: This proposal would apply to ancillary services performed by an out-
ofnetworkof-network provider at an in-network facility if such services would have been covered
had they been provided in network.
Scenario 3: This proposal would apply to nonemergency, non-ancillary services
performed by an out-of-network provider at an in-network facility if such services
would have been covered had they been provided in network.
Scenario 4: This proposal would apply to services provided to a consumer prior to
being stable and in a condition to receive notification information if such consumer
previously received emergency services or maternal care for a woman in labor in an
CRS-34
Scenario 1: This proposal would apply to emergency services provided by an out-ofnetwork provider, emergency department of a hospital, or independent
freestanding emergency department. Emergency services include post-stabilization
items and services that are furnished to a consumer before both the consumer is
deemed fit to travel using nonemergency medical transportation and where the
provider has yet to satisfy notice and consent requirements (see “Consumer
Notification and Consent” row of this table).
Scenario 2: This proposal would apply to nonemergency items or services (further
specified to include equipment and devices, telemedicine services, imaging services,
laboratory services, and such other items and services as specified by the Secretary)
performed by an out-of-network provider during a visit at an in-network hospital,
critical access hospital, ambulatory surgical center, laboratory, or radiology
Title I of S. 1895 (Alexander)
Title IV of the ANS to H.R. 2328a (as offered by Rep. Pallone)
emergency department of an out-of-network facility and was subsequently admitted
to the out-of-network facility.
Scenario 5: This proposal would apply to any out-of-network services provided to a
consumer post-stabilization if such consumer previously received emergency
services or maternal care for a woman in labor in an emergency department of an
out-of-network facility and was subsequently admitted to the out-of-network
facility.
Scenario 6: This proposal would apply to air ambulance services from an out-ofnetwork provider if such services would have been covered had they been provided
in network.
facility/imaging center (regardless of whether the out-of-network provider is at the
in-network facility).
Applicable Plans
previously received emergency services or maternal care for a woman in labor in an emergency department of an out-of-network facility and was subsequently admitted to the out-of-network facility.
Scenario 5: This proposal would apply to any out-of-network services provided to a consumer post-stabilization if such consumer previously received emergency services or maternal care for a woman in labor in an emergency department of an out-of-network facility and was subsequently admitted to the out-of-network facility.
Scenario 6: This proposal would apply to air ambulance services from an out-of-network provider if such services would have been covered had they been provided in network.
Scenario 1: This proposal would apply to emergency services provided by an out-of-network provider, emergency department of a hospital, or independent freestanding emergency department. Emergency services include post-stabilization items and services that are furnished to a consumer before both the consumer is deemed fit to travel using nonemergency medical transportation and where the provider has yet to satisfy notice and consent requirements (see "Consumer Notification and Consent" row of this table).
Scenario 2: This proposal would apply to nonemergency items or services (further specified to include equipment and devices, telemedicine services, imaging services, laboratory services, and such other items and services as specified by the Secretary) performed by an out-of-network provider during a visit at an in-network hospital, critical access hospital, ambulatory surgical center, laboratory, or radiology facility/imaging center (regardless of whether the out-of-network provider is at the in-network facility).
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Applicable Plans
|
Scenario 1: Including corresponding grandfathered plans, this proposal would apply
to large-group plans, small-group plans, individual plans, and self-insured plans, as
long as such plans cover services in an emergency department of a hospital.
d
d
Scenarios 2-5: Including corresponding grandfathered plans, this proposal would
apply to large-group plans, small-group plans, individual plans, self-insured plans, and
plans offered under the Federal Employee Health Benefits (FEHB) program.
d
d
Scenario 6: This proposal would apply to large-group plans, small-group plans,
individual plans, and self-insured plans.
Scenario 1: Including corresponding grandfathered plans, this proposal would apply
to large-group plans, small-group plans, individual plans, and self-insured plans, as
long as such plans cover services in an emergency department of a hospital or an
independent freestanding emergency department.
d
d
Scenario 2: Including corresponding grandfathered plans, this proposal would apply
to large-group plans, small-group plans, individual plans, and self-insured plans.
d
Consumer Cost Sharing
4 e:
Scenarios 1,
d
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Consumer Cost Sharing
|
Scenarios 1, 4e: This proposal would limit consumer cost-sharing requirements
(expressed as a
“"copayment amount, coinsurance rate, or deductible
”") to what they
would be if such services were furnished in network.
Scenarios 2 and 6: This proposal would limit consumer cost-sharing requirements
(expressed as a
“"copayment amount, coinsurance rate, or deductible
”") to what they
would be if such services were furnished in-network and any coinsurance and
deductible would be based on
“"in-network rates.
”" Such cost-sharing amounts would
be counted toward any in-network deductibles or out-of-pocket maximums as if
they were made for in-network services.
Scenario 3: In instances where the relevant provider did not comply with specified
notice and consent requirements (see
“"Consumer Notification and Consent
”" row),
this proposal would limit consumer cost-sharing requirements (expressed as a
“ "copayment amount, coinsurance rate, or deductible
”") to what they would be if
CRS-35
such services were furnished in-network and any coinsurance and deductible would be based on "in-network rates."
Scenario 5: In instances where the relevant provider did not comply with specified notice and consent requirements (see "Consumer Notification and Consent" row), this proposal would limit consumer cost-sharing requirements (expressed as a "copayment amount, coinsurance rate, or deductible") to what they would be if such services were furnished in network.
Scenario 1: This proposal would limit consumer cost-sharing requirements
(expressed as a
“"copayment amount or coinsurance rate
”") from exceeding what
they would be if such items or services were furnished in network.
It also would specify the total provider charge amount that consumer cost-sharing
amounts would be based on, which varies depending on whether a state has in
effect a law that specifies a methodology for determining
“"the amount of payment
”
" for such out-of-network item or service. Such cost-sharing amounts would be
counted toward any in-network deductibles or out-of-pocket maximums as if they
were made for in-network services.
Scenario 2: In instances where the relevant provider does not comply with specified
notice and consent requirements (see
“"Consumer Notification and Consent
”" row),
this proposal would limit consumer cost-sharing amounts (expressed as a
“ "copayment amount or coinsurance rate
”") from exceeding what they would be if
such items or services were furnished in network.
Title I of S. 1895 (Alexander)
Title IV of the ANS to H.R. 2328a (as offered by Rep. Pallone)
such services were furnished in-network and any coinsurance and deductible would
be based on “in-network rates.”
Scenario 5: In instances where the relevant provider did not comply with specified
notice and consent requirements (see “Consumer Notification and Consent” row),
this proposal would limit consumer cost-sharing requirements (expressed as a
“copayment amount, coinsurance rate, or deductible”) to what they would be if
such services were furnished in network.
such items or services were furnished in network.
It also would specify the total provider charge amount that consumer cost-sharing
amounts would be based on, which varies depending on whether a state has in
effect a law that specifies a methodology for determining
“"the amount of payment
”
" for such out-of-network item or service. Such cost-sharing amounts would be
counted toward any in-network deductibles or out-of-pocket maximums as if they
were made for in-network services.
Amount Providers Can Charge Consumers Above Cost Sharing (i.e., Balance Bill)
Scenarios 1f
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Amount Providers Can Charge Consumers Above Cost Sharing (i.e., Balance Bill)
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Scenarios 1f, 2, 4, and 6: This proposal would explicitly prohibit balance billing by
relevant providers.
Scenarios 3 and 5: This proposal would explicitly prohibit balance billing by relevant
providers if specified notice and consent requirements are not met (see
“Consumer
"Consumer Notification and Consent
” row).
" row).
This proposal would not prohibit relevant providers from balance billing consumers
if specified notice and consent requirements are met.
Scenario 1: This proposal would explicitly prohibit balance billing by relevant
providers.
Scenario 2: This proposal would explicitly prohibit balance billing by relevant
providers if specified notice and consent requirements are not met (see
“Consumer
"Consumer Notification and Consent
”" row).
This proposal would not prohibit relevant providers from balance billing consumers
if specified notice and consent requirements are met.
Amount Providers Can Receive from Plans
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Amount Providers Can Receive from Plans
|
Scenarios 1, 2, and 4: In instances where a state surprise billing law that includes a
method for determining the amount of payment for services would be applicable,
this proposal would require plans to pay providers an amount in accordance with
such law.
In instances where a state surprise billing law does not exist, would not be
applicable, or does not include a method for determining the amount of payment,
this proposal would require plans to pay providers the difference between the
median in-network rate and the consumer cost sharing.
A plan’
A plan's median in-network rate would be the median amount recognized by the
plan as the total maximum payment (including consumer cost sharing) for the same
or similar in-network service provided by a provider in the same or similar specialty
and provided in the geographic region in which the item or service was furnished.
If the plan did not have sufficient information to calculate a median in-network rate
for a particular service or provider type in a geographic area, then the plan would
be required to demonstrate that it would use information from any database that is
free from conflicts of interest and has sufficient information (see
“"Use of Database
to Determine Provider Payment
”" row).
CRS-36
Scenario 1: In instances where a state surprise billing law includes a method for
determining the amount of payment for applicable items or services furnished to a
consumer enrolled in a plan that is regulated by the state, this proposal would
require plans to pay providers not more than the amount determined in accordance
with such state law.
In instances where such a state surprise billing law does not exist,g this proposal
would require plans to pay providers at least the difference between the median
contracted rate and the consumer cost sharing.
For 2021, a plan’s median contracted rate would be the median amount recognized
by the plan as the total maximum payment (including consumer cost sharing) in
2019, and indexed by inflation (CPI-U) for 2019 and 2020, for the same or similar
in-network item or service that is provided by a provider in the same or similar
specialty and provided in the geographic region in which the item or service is
furnished. For 2022 and subsequent years, the median contract rate would be
indexed for inflation (CPI-U) over the previous year’s rate.
If the plan did not have sufficient information to calculate a median contracted rate
for a particular service in a geographic area, then the plan would be required to use
Title I of S. 1895 (Alexander)
Title IV of the ANS to H.R. 2328a (as offered by Rep. Pallone)
The Secretary would, through rulemaking, determine a methodology that plans
would use to determine a median in-network rate.
Scenarios 3 and 5: This proposal would apply the above methodology to plan
payments to providers in instances where the relevant provider did not comply
with specified notice and consent requirements (see “Consumer Notification and
Consent” row).
Scenario 6: This proposal would require plans to pay providers the difference
between the median in-network rate (as defined above) and the consumer cost
sharing. The Secretary would, through rulemaking, determine a methodology that
plans would use to determine a median in-network rate.
information from any database that is free from conflicts of interest and has
sufficient information (see “Use of Database to Determine Provider Payment” row).
If a plan did not offer coverage in that area in 2019, the plan would be required to
reimburse based on the methodologies established by the Secretary, which would
then be subsequently adjusted for inflation (CPI-U).
Further median contracted rate methodologies would be determined by the
Secretary through rulemaking.
The amount a plan would pay a provider could be adjusted in a subsequent
independent resolution process (see “Arbitration of Review Process” row).
Scenario 2: This proposal would apply the same methodology to plan payments to
providers in instances where the relevant provider did not comply with specified
notice and consent requirements (see “Consumer Notification and Consent” row).
Other Consumer Costsh
Scenarios 1, 4, and 5: These scenarios do not make a distinction with respect to
whether a plan covers out-of-network care. Therefore, other consumer cost
situations where a consumer was enrolled in a plan that did not cover out-ofnetwork benefits would not be handled any differently than other out-of-network
billing situations where a consumer was enrolled in a plan that covered out-ofnetwork benefits.
These scenarios would address services that would be covered by the plan if such
services were provided in network. It is unclear whether these scenarios would
address services that are not covered by a consumer’s plan (i.e., excluded services).
Scenarios 2, 3, and 6: These scenarios do not make a distinction with respect to
whether a plan covers out-of-network care. Therefore, other consumer cost
situations where a consumer was enrolled in a plan that did not cover out-ofnetwork benefits would not be handled any differently than other out-of-network
billing situations where a consumer was enrolled in a plan that covered out-ofnetwork benefits.
These scenarios would address services that would be covered by the plan if such
services were provided in network. These scenarios would not address services
that are not covered by consumer’s plan (i.e., excluded services).
Scenarios 1 and 2: These scenarios do not make a distinction with respect to
whether a plan covers out-of-network care. Therefore, other consumer cost
situations would not be handled any differently than other out-of-network billing
situations where a consumer was enrolled in a plan that covered out-of-network
benefits.
These scenarios would address services that would be covered by the plan if such
services were provided in network. It is unclear whether these scenarios would
address services that are not covered by a consumer’s plan (i.e., excluded services).
Use of Database to Determine Provider Payment
Scenarios 1-6: If a plan did not have sufficient information to calculate a median innetwork rate (see “Amount Providers Can Receive from Plans” row) for a
CRS-37
Scenarios 1 and 2: If a plan did not have sufficient information to calculate a median
contracted rate (see “Amount Providers Can Receive from Plans” row) for a
Title I of S. 1895 (Alexander)
Title IV of the ANS to H.R. 2328a (as offered by Rep. Pallone)
particular service or provider type in a geographic area, then the plan would use
information from any database that is free from conflicts of interest and has
sufficient information reflecting allowed amounts in that applicable geographic
region. The plan would be responsible for covering the cost of accessing the
database.
particular item, service, or provider type within a geographic area, then the plan
would use information from any database (e.g., a state all-payer claims database)
that is free from conflicts of interest and has sufficient information reflecting
allowed amounts in that applicable geographic region to determine a median
contracted rate. The plan would be responsible for covering the cost of accessing
the database.
Arbitration or Review Process
This proposal does not establish an arbitration or review process.
CRS-38
Scenarios 1 and 2: After an initial (maximum) 60-day appeal and/or notification
period between a plan and a provider/emergency facility regarding a plan payment
to a provider/facility, an out-of-network provider, out-of-network emergency
facility, or plan could initiate an independent resolution (IDR) process, as
established by the Secretaries of HHS and Labor, in which a nongovernmental,
certified arbitrator (who agreed to comply with a fee structure for his or her
services) would determine the final payment amount. The arbitrator would be
mutually selected by the involved plan and provider/emergency facility or would be
selected by the HHS Secretary at random.
Claims for an item or service with a median contracted rate (see “Amount
Providers Can Receive from Plans” row) that did not exceed $1,250 in 2021 could
not be submitted to the IDR process. The $1,250 threshold would be adjusted for
inflation (CPI-U) in subsequent years.
If, under the IDR process, the arbitrator determined that a settlement between the
two involved entities was likely, the arbitrator would be permitted to direct the
entities to attempt a good-faith negotiation for no more than 10 days. If the
negotiation were not successful, the arbitrator would determine a final amount.
If the settlement were not reached (or not attempted), the plan and the
provider/emergency facility each would be required submit a final offer to the
arbitrator. The arbitrator then would determine which amount was the most
reasonable within 30 days of being selected as an arbitrator. If the plan owed the
provider/emergency facility additional amounts above the initial payment or the
provider/emergency facility was required to repay the plan some amount from the
initial payment, such amounts would be required to be paid within 30 days. The final
payment amount would be considered binding and not subject to judicial review
(except in specified instances).
In making this determination, the arbitrator would be required to decide
reasonability based on a variety of factors specified in the proposal, including the
median contracted rate for comparable items or services furnished in the same
Title I of S. 1895 (Alexander)
Title IV of the ANS to H.R. 2328a (as offered by Rep. Pallone)
geographic area; the provider’s/emergency facility’s level of training, education,
experience, and quality and outcomes measurements; and any extenuating
circumstances relating the complexity of the items and services or the individual’s
acuity. The arbitrator would not be permitted to consider the amount that would
have been billed by the provider/emergency facility had the provider been allowed
to balance bill the consumer.
The non-prevailing party would be responsible for paying the IDR fees, unless a
settlement was reached before an IDR determination, in which case the fees would
be split (though the settling parties could divide the fees another way).
The HHS Secretary and the Secretary of Labor would be responsible for publishing
specified pieces of information regarding the IDR process.
Consumer Point of Service Notification and Consent
Scenarios 1-5: This proposal would require facilities furnishing relevant services to
provide a notice to, and receive a signature from, a consumer upon intake in an
emergency room or upon being admitted at the facility that includes information on
the prohibition on balance billing and who to contact in the event that the
consumer was balance billed.
Scenario 3: This proposal would require in-network facilities to, as soon as
practicable and not later than 48 hours prior to providing a service, provide a
written or electronic notification to, and obtain signed consent from, a consumer in
order to be exempt from the consumer cost-sharing and balance billing
requirements.
Providers would be required to retain the written consent for at least two years.
Scenario 5: This proposal would require in-network facilities and plans to separately
provide, prior to the provision of any post-stabilization, out-of-network service, a
written or electronic notification to a consumer in a condition to receive such
information, including sufficient mental capacity, in order to be exempt from the
consumer cost-sharing and balance billing requirements. The consumer would be
required to provide written consent.
Providers would be required to retain the documentation that the notice was
provided and the consumer confirmed receipt of such information for at least two
years.
Scenario 6: This proposal does not address consumer notification and consent in
this scenario.
CRS-39
Scenario 1: This proposal would stop applying emergency service requirements to
post-stabilization items and services once a consumer was deemed fit to travel and
where the provider had satisfied notice and consent requirements applicable to
Scenario 2.
Scenario 2: This proposal would require out-of-network providers or facilities to
provide a written notification (and an oral explanation of such notification) to, and
obtain signed consent from, a consumer (or a consumer representative) in order to
be exempt from the consumer cost-sharing and balance billing requirements. (Items
or services furnished as a result of unforeseen medical needs would not be
exempted.)
The relevant provider would be required to provide the notice to the consumer on
the date on which the individual was furnished relevant items or services and
(where applicable) on the date the appointment for the items or services was made.
The provider would be required to obtain the consent not less than 72 hours prior
to furnishing items or services.
Providers would be required to retain the written notification for at least two
years.
Title I of S. 1895 (Alexander)
Title IV of the ANS to H.R. 2328a (as offered by Rep. Pallone)
Defined Enforcement Mechanism
This proposal does not explicitly address enforcement with respect to
requirements on plans.
With respect to requirements on providers, the proposal provides the following:
Scenarios 1-5: In the event a facility or provider were to hold consumers
responsible for amounts in addition to consumer cost-sharing amounts established
in the bill (with respect to Scenarios 3 and 5) or failed to provide notice or obtain
consumer consent (see “Consumer Point of Service Notification and Consent” row),
then the provider would be liable to a civil monetary penalty of not more than
$10,000 for each violation (after applying certain provisions in Section 1128A of the
Social Security Act). Such penalty would be waived if a facility or practitioner were
already subject to enforcement action under state law. Penalties would not apply in
situations where a provider reimbursed a consumer within 30 days of any amounts
collected above the allowed amounts. The Secretary would be allowed to establish
a hardship exemption to these penalties.
Scenario 6: In the event an air ambulance service provider were to hold consumers
responsible for amounts in addition to consumer cost-sharing amounts established
in the bill, then the provider would be liable to a civil monetary penalty of not more
than $10,000 for each violation (after applying certain provisions in Section 1128A
of the Social Security Act). Penalties would not apply in situations where a provider
reimbursed a consumer within 30 days of any amounts collected above the allowed
amounts.
This proposal does not explicitly address enforcement with respect to
requirements on plans.
With respect to requirements on providers, the proposal provides the following:
Scenarios 1 and 2: States would be acknowledged as having the authority to require
relevant providers to adhere to consumer balance billing limitations, consumer
consent and notification requirements, and provider participation in the IDR
process.
If the Secretary were to determine that a state had failed to substantially enforce
these requirements, the Secretary would be required to enforce such requirements
through the use of a civil monetary penalty of not more than $10,000 for each
violation. Penalties would not apply in situations where a provider reimbursed a
consumer within 30 days for any amounts collected above the allowed amounts.
The Secretary would be allowed to establish a hardship exemption to these
penalties.
Furthermore, the Secretary would be required to establish a process to receive
consumer complaints and resolve such complaints within 60 days.
State Law Interaction
Scenarios 1-5: If a state had a law in effect that provides an alternative method for
determining the appropriate compensation that a plan must make to a provider for
services in these scenarios, the plan would be required to make a plan payment to a
provider according to the state methodology (see “Amount Providers Can Receive
from Plans” row).
Scenario 6: This proposal does not explicitly indicate how this scenario would
interact with state law.
CRS-40
Scenarios 1 and 2: If a state had in effect a law that includes a method for
determining the amount of payment for applicable items or services furnished to a
consumer enrolled in a plan that is regulated by the state, the plan would be
required to make a plan payment to a provider according to the state methodology
(see “Amount Providers Can Receive from Plans” row). Additionally, consumer
cost-sharing amounts within such a state would be based on a total amount that is
the lesser of the amount determined in accordance with the state law or the
median contracted rate” (see “Amount Providers Can Receive from Plans” row).
Separately, the enforcement provisions within the proposal would not supersede
any state law that establishes, implements, or continues any enforcement
requirement or prohibition except to the extent that state law prohibits federal
enforcement.
Title I of S. 1895 (Alexander)
Title IV of the ANS to H.R. 2328a (as offered by Rep. Pallone)
Other Provisions
This proposal would require the Secretary, in consultation with the Federal Trade
Commission and the Attorney General to study the effects of the proposal,
including impacts on provider and plan consolidation, health care costs, access to
services (including rural and health professional shortage areas), and provide
recommendations for effective enforcement of the in-network rate benchmark and
for addressing anti-competitive consolidation. Certain aspects of the report would
be required to be made in consultation with the Secretary of Labor and the
Secretary of the Treasury.
This proposal would authorize appropriations for one-time grants to states to
establish or maintain state all payer claims databases (APCDs).
This proposal would require the Secretary to consult with appropriate state
agencies to develop an audit process for plan compliance with calculating the
median contracted rate (see “Amount Providers Can Receive from Plans” row).
This proposal would create requirements on plans and providers regarding provider
directories and making information about balance billing requirements publicly
available.
The proposal would establish a statute of limitations with respect to providers
billing consumers.
This proposal would require providers of emergency air medical services to submit
plan claims and cost information to the Secretary. The Secretary would be required
to make such information publicly available and subsequently provide a summary
report to Congress. A provider who violated the requirement could be liable for a
civil monetary penalty of not more than $10,000 for each act. The Comptroller
General would be responsible for subsequently submitting a report to Congress
that analyzes the cost variation of such providers and makes recommendations that
are deemed appropriate by the Comptroller General.
This proposal would require the Government Accountability Office to study profitand revenue-sharing relationships in the commercial health markets, the effects of
the proposal on the prevalence of consumers receiving out-of-network care, the
effects of the proposal on provider shortages and accessibility (focusing on rural and
medically underserved communities), information regarding the grants to states to
establish or maintain state APCDs, and cost variation of air ambulance services.
This proposal would require the Secretary and Secretary of Labor to separately
study the effects of the proposal, including impacts on premiums and out-of-pocket
costs, the adequacy of provider networks, and other impacts deemed relevant by
the Secretary.
Source:
The Secretary would, through rulemaking, determine a methodology that plans would use to determine a median in-network rate.
Scenarios 3 and 5: This proposal would apply the above methodology to plan payments to providers in instances where the relevant provider did not comply with specified notice and consent requirements (see "Consumer Notification and Consent" row).
Scenario 6: This proposal would require plans to pay providers the difference between the median in-network rate (as defined above) and the consumer cost sharing. The Secretary would, through rulemaking, determine a methodology that plans would use to determine a median in-network rate.
Scenario 1: In instances where a state surprise billing law includes a method for determining the amount of payment for applicable items or services furnished to a consumer enrolled in a plan that is regulated by the state, this proposal would require plans to pay providers not more than the amount determined in accordance with such state law.
In instances where such a state surprise billing law does not exist,g this proposal would require plans to pay providers at least the difference between the median contracted rate and the consumer cost sharing.
For 2021, a plan's median contracted rate would be the median amount recognized by the plan as the total maximum payment (including consumer cost sharing) in 2019, and indexed by inflation (CPI-U) for 2019 and 2020, for the same or similar in-network item or service that is provided by a provider in the same or similar specialty and provided in the geographic region in which the item or service is furnished. For 2022 and subsequent years, the median contract rate would be indexed for inflation (CPI-U) over the previous year's rate.
If the plan did not have sufficient information to calculate a median contracted rate for a particular service in a geographic area, then the plan would be required to use information from any database that is free from conflicts of interest and has sufficient information (see "Use of Database to Determine Provider Payment" row).
If a plan did not offer coverage in that area in 2019, the plan would be required to reimburse based on the methodologies established by the Secretary, which would then be subsequently adjusted for inflation (CPI-U).
Further median contracted rate methodologies would be determined by the Secretary through rulemaking.
The amount a plan would pay a provider could be adjusted in a subsequent independent resolution process (see "Arbitration of Review Process" row).
Scenario 2: This proposal would apply the same methodology to plan payments to providers in instances where the relevant provider did not comply with specified notice and consent requirements (see "Consumer Notification and Consent" row).
Other Consumer Costsh
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Scenarios 1, 4, and 5: These scenarios do not make a distinction with respect to whether a plan covers out-of-network care. Therefore, other consumer cost situations where a consumer was enrolled in a plan that did not cover out-of-network benefits would not be handled any differently than other out-of-network billing situations where a consumer was enrolled in a plan that covered out-of-network benefits.
These scenarios would address services that would be covered by the plan if such services were provided in network. It is unclear whether these scenarios would address services that are not covered by a consumer's plan (i.e., excluded services).
Scenarios 2, 3, and 6: These scenarios do not make a distinction with respect to whether a plan covers out-of-network care. Therefore, other consumer cost situations where a consumer was enrolled in a plan that did not cover out-of-network benefits would not be handled any differently than other out-of-network billing situations where a consumer was enrolled in a plan that covered out-of-network benefits.
These scenarios would address services that would be covered by the plan if such services were provided in network. These scenarios would not address services that are not covered by consumer's plan (i.e., excluded services).
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Scenarios 1 and 2: These scenarios do not make a distinction with respect to whether a plan covers out-of-network care. Therefore, other consumer cost situations would not be handled any differently than other out-of-network billing situations where a consumer was enrolled in a plan that covered out-of-network benefits.
These scenarios would address services that would be covered by the plan if such services were provided in network. It is unclear whether these scenarios would address services that are not covered by a consumer's plan (i.e., excluded services).
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Use of Database to Determine Provider Payment
|
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Scenarios 1-6: If a plan did not have sufficient information to calculate a median in-network rate (see "Amount Providers Can Receive from Plans" row) for a particular service or provider type in a geographic area, then the plan would use information from any database that is free from conflicts of interest and has sufficient information reflecting allowed amounts in that applicable geographic region. The plan would be responsible for covering the cost of accessing the database.
|
Scenarios 1 and 2: If a plan did not have sufficient information to calculate a median contracted rate (see "Amount Providers Can Receive from Plans" row) for a particular item, service, or provider type within a geographic area, then the plan would use information from any database (e.g., a state all-payer claims database) that is free from conflicts of interest and has sufficient information reflecting allowed amounts in that applicable geographic region to determine a median contracted rate. The plan would be responsible for covering the cost of accessing the database.
|
|
Arbitration or Review Process
|
|
This proposal does not establish an arbitration or review process.
|
Scenarios 1 and 2: After an initial (maximum) 60-day appeal and/or notification period between a plan and a provider/emergency facility regarding a plan payment to a provider/facility, an out-of-network provider, out-of-network emergency facility, or plan could initiate an independent resolution (IDR) process, as established by the Secretaries of HHS and Labor, in which a nongovernmental, certified arbitrator (who agreed to comply with a fee structure for his or her services) would determine the final payment amount. The arbitrator would be mutually selected by the involved plan and provider/emergency facility or would be selected by the HHS Secretary at random.
Claims for an item or service with a median contracted rate (see "Amount Providers Can Receive from Plans" row) that did not exceed $1,250 in 2021 could not be submitted to the IDR process. The $1,250 threshold would be adjusted for inflation (CPI-U) in subsequent years.
If, under the IDR process, the arbitrator determined that a settlement between the two involved entities was likely, the arbitrator would be permitted to direct the entities to attempt a good-faith negotiation for no more than 10 days. If the negotiation were not successful, the arbitrator would determine a final amount.
If the settlement were not reached (or not attempted), the plan and the provider/emergency facility each would be required submit a final offer to the arbitrator. The arbitrator then would determine which amount was the most reasonable within 30 days of being selected as an arbitrator. If the plan owed the provider/emergency facility additional amounts above the initial payment or the provider/emergency facility was required to repay the plan some amount from the initial payment, such amounts would be required to be paid within 30 days. The final payment amount would be considered binding and not subject to judicial review (except in specified instances).
In making this determination, the arbitrator would be required to decide reasonability based on a variety of factors specified in the proposal, including the median contracted rate for comparable items or services furnished in the same geographic area; the provider's/emergency facility's level of training, education, experience, and quality and outcomes measurements; and any extenuating circumstances relating the complexity of the items and services or the individual's acuity. The arbitrator would not be permitted to consider the amount that would have been billed by the provider/emergency facility had the provider been allowed to balance bill the consumer.
The non-prevailing party would be responsible for paying the IDR fees, unless a settlement was reached before an IDR determination, in which case the fees would be split (though the settling parties could divide the fees another way).
The HHS Secretary and the Secretary of Labor would be responsible for publishing specified pieces of information regarding the IDR process.
|
|
Consumer Point of Service Notification and Consent
|
|
Scenarios 1-5: This proposal would require facilities furnishing relevant services to provide a notice to, and receive a signature from, a consumer upon intake in an emergency room or upon being admitted at the facility that includes information on the prohibition on balance billing and who to contact in the event that the consumer was balance billed.
Scenario 3: This proposal would require in-network facilities to, as soon as practicable and not later than 48 hours prior to providing a service, provide a written or electronic notification to, and obtain signed consent from, a consumer in order to be exempt from the consumer cost-sharing and balance billing requirements.
Providers would be required to retain the written consent for at least two years.
Scenario 5: This proposal would require in-network facilities and plans to separately provide, prior to the provision of any post-stabilization, out-of-network service, a written or electronic notification to a consumer in a condition to receive such information, including sufficient mental capacity, in order to be exempt from the consumer cost-sharing and balance billing requirements. The consumer would be required to provide written consent.
Providers would be required to retain the documentation that the notice was provided and the consumer confirmed receipt of such information for at least two years.
Scenario 6: This proposal does not address consumer notification and consent in this scenario.
|
Scenario 1: This proposal would stop applying emergency service requirements to post-stabilization items and services once a consumer was deemed fit to travel and where the provider had satisfied notice and consent requirements applicable to Scenario 2.
Scenario 2: This proposal would require out-of-network providers or facilities to provide a written notification (and an oral explanation of such notification) to, and obtain signed consent from, a consumer (or a consumer representative) in order to be exempt from the consumer cost-sharing and balance billing requirements. (Items or services furnished as a result of unforeseen medical needs would not be exempted.)
The relevant provider would be required to provide the notice to the consumer on the date on which the individual was furnished relevant items or services and (where applicable) on the date the appointment for the items or services was made. The provider would be required to obtain the consent not less than 72 hours prior to furnishing items or services.
Providers would be required to retain the written notification for at least two years.
|
|
Defined Enforcement Mechanism
|
This proposal does not explicitly address enforcement with respect to requirements on plans.
With respect to requirements on providers, the proposal provides the following:
Scenarios 1-5: In the event a facility or provider were to hold consumers responsible for amounts in addition to consumer cost-sharing amounts established in the bill (with respect to Scenarios 3 and 5) or failed to provide notice or obtain consumer consent (see "Consumer Point of Service Notification and Consent" row), then the provider would be liable to a civil monetary penalty of not more than $10,000 for each violation (after applying certain provisions in Section 1128A of the Social Security Act). Such penalty would be waived if a facility or practitioner were already subject to enforcement action under state law. Penalties would not apply in situations where a provider reimbursed a consumer within 30 days of any amounts collected above the allowed amounts. The Secretary would be allowed to establish a hardship exemption to these penalties.
Scenario 6: In the event an air ambulance service provider were to hold consumers responsible for amounts in addition to consumer cost-sharing amounts established in the bill, then the provider would be liable to a civil monetary penalty of not more than $10,000 for each violation (after applying certain provisions in Section 1128A of the Social Security Act). Penalties would not apply in situations where a provider reimbursed a consumer within 30 days of any amounts collected above the allowed amounts.
|
This proposal does not explicitly address enforcement with respect to requirements on plans.
With respect to requirements on providers, the proposal provides the following:
Scenarios 1 and 2: States would be acknowledged as having the authority to require relevant providers to adhere to consumer balance billing limitations, consumer consent and notification requirements, and provider participation in the IDR process.
If the Secretary were to determine that a state had failed to substantially enforce these requirements, the Secretary would be required to enforce such requirements through the use of a civil monetary penalty of not more than $10,000 for each violation. Penalties would not apply in situations where a provider reimbursed a consumer within 30 days for any amounts collected above the allowed amounts. The Secretary would be allowed to establish a hardship exemption to these penalties.
Furthermore, the Secretary would be required to establish a process to receive consumer complaints and resolve such complaints within 60 days.
|
State Law Interaction
|
|
Scenarios 1-5: If a state had a law in effect that provides an alternative method for determining the appropriate compensation that a plan must make to a provider for services in these scenarios, the plan would be required to make a plan payment to a provider according to the state methodology (see "Amount Providers Can Receive from Plans" row).
Scenario 6: This proposal does not explicitly indicate how this scenario would interact with state law.
|
Scenarios 1 and 2: If a state had in effect a law that includes a method for determining the amount of payment for applicable items or services furnished to a consumer enrolled in a plan that is regulated by the state, the plan would be required to make a plan payment to a provider according to the state methodology (see "Amount Providers Can Receive from Plans" row). Additionally, consumer cost-sharing amounts within such a state would be based on a total amount that is the lesser of the amount determined in accordance with the state law or the median contracted rate" (see "Amount Providers Can Receive from Plans" row). Separately, the enforcement provisions within the proposal would not supersede any state law that establishes, implements, or continues any enforcement requirement or prohibition except to the extent that state law prohibits federal enforcement.
|
|
Other Provisions
|
|
This proposal would require the Secretary, in consultation with the Federal Trade Commission and the Attorney General to study the effects of the proposal, including impacts on provider and plan consolidation, health care costs, access to services (including rural and health professional shortage areas), and provide recommendations for effective enforcement of the in-network rate benchmark and for addressing anti-competitive consolidation. Certain aspects of the report would be required to be made in consultation with the Secretary of Labor and the Secretary of the Treasury.
|
This proposal would authorize appropriations for one-time grants to states to establish or maintain state all payer claims databases (APCDs).
This proposal would require the Secretary to consult with appropriate state agencies to develop an audit process for plan compliance with calculating the median contracted rate (see "Amount Providers Can Receive from Plans" row).
This proposal would create requirements on plans and providers regarding provider directories and making information about balance billing requirements publicly available.
The proposal would establish a statute of limitations with respect to providers billing consumers.
This proposal would require providers of emergency air medical services to submit plan claims and cost information to the Secretary. The Secretary would be required to make such information publicly available and subsequently provide a summary report to Congress. A provider who violated the requirement could be liable for a civil monetary penalty of not more than $10,000 for each act. The Comptroller General would be responsible for subsequently submitting a report to Congress that analyzes the cost variation of such providers and makes recommendations that are deemed appropriate by the Comptroller General.
This proposal would require the Government Accountability Office to study profit- and revenue-sharing relationships in the commercial health markets, the effects of the proposal on the prevalence of consumers receiving out-of-network care, the effects of the proposal on provider shortages and accessibility (focusing on rural and medically underserved communities), information regarding the grants to states to establish or maintain state APCDs, and cost variation of air ambulance services.
This proposal would require the Secretary and Secretary of Labor to separately study the effects of the proposal, including impacts on premiums and out-of-pocket costs, the adequacy of provider networks, and other impacts deemed relevant by the Secretary.
|
Source: Congressional Research Service analysis of Title IV of the amendment in the nature of a substitute (ANS) to H.R. 2328, relevant amendments to the ANS to
H.R. 2328, and S. 1895 (Lower Health Care Costs Act).
Notes: ANS: amendment in the nature of a substitute. The Secretary of Health and Human Services (HHS) is generally referred to as the
“Secretary”"Secretary" in the table. Other
Secretaries are specified where necessary. The bills analyzed for this appendix use different terms to refer to whether or not a provider has a contractual relation with a
plan (e.g., is a participating/non-participating provider), For ease of comparison, this table uses the terms
in network and out of networkin network and out of network to reflect whether or not a
provider has or does not have such relationship, respectively.
CRS-41
a.
b.
c.
d.
e.
f.
g.
h.
CRS-42
a. The analysis of the ANS offered by Rep. Pallone includes other amendments that were offered by other Representatives, were agreed to by voice vote during the
House Committee on Energy and Commerce markup session held on July 17, 2019, and are relevant to surprise billing. Specifically, these are the amendments
offered by Rep. Pallone, Rep. Gianforte, Rep. Matsui, Rep. Kuster, Rep. Blunt Rochester, Rep. Luján, Reps. Ruiz and Bucshon, and Rep. Schrader. A list of all
amendments offered during the markup session can be found at https://energycommerce.house.gov/committee-activity/markups/markup-of-26-bills-full-
committeejulycommittee-july-17-2019
.
.
b. Proposals may define additional terms through reference.
The term facility
c. The term facility is defined in this bill to include
“"hospitals, hospital outpatient departments, critical access hospitals, ambulatory surgery centers, laboratories,
radiology clinics, freestanding emergency rooms, and any other facility that provides services that are covered under a group health plan or health insurance
coverage” coverage" and is explicitly applicable to Scenarios 2 and 3 and only applicable to Scenarios 1, 4, and 5 in limited instances.
d. The Affordable Care Act (ACA; P.L. 114-148, as amended) provided that group health plans and health insurance coverage in which at least one individual was
enrolled as of enactment of the ACA (March 23, 2010) could be
grandfatheredgrandfathered if such plans comply with applicable federal requirements and avoid making specified
changes to the plan. For as long as a plan maintains its grandfathered status, it has to comply with only some, but not all, of the federal health insurance
requirements established under the ACA.
e. Title I of S. 1895 refers to the requirement applicable under 42 U.S.C. §300gg-19a(b)(2)(C)(ii)(II); however, that subsection does not exist. This appendix assumes
that 42 U.S.C. §300gg-19a(b)(1)(C)(ii)(II) should be referenced, as it is elsewhere in the bill.
f. This prohibition on balance billing also applies to plans offered under the FEHB Program in Scenario 1, through reference to 42 U.S.C. §300gg-19a(g) (as such section
is added by this bill).
g. It is unclear whether federal law or state law would apply in instances where a state has a surprise billing law that includes a method for determining the amount of
payment for applicable items or services but such law does not apply to a particular type of plan (e.g., self-insured plans).
h. The costs discussed in this row are outside the scope of a consumer
’'s plan or apply to consumers without a plan. These consumer costs are not considered a
balance bill as the term is used in this report, because balance bills are amounts consumers are charged above what the plan pays. In these instances, the plan pays
nothing.
Surprise Billing in Private Health Insurance: Overview and Federal Policy Considerations
Author Information
Ryan J. Rosso
Analyst in Health Care Financing
Wen S. Shen
Legislative Attorney
Noah D. Isserman
Analyst in Health Insurance and Financing
Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
shared staff to congressional committees and Members of Congress. It operates solely at the behest of and
under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in
connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not
subject to copyright protection in the United States. Any CRS Report may be reproduced and distributed in
its entirety without permission from CRS. However, as a CRS Report may include copyrighted images or
material from a third party, you may need to obtain the permission of the copyright holder if you wish to
copy or otherwise use copyrighted material.
Congressional Research Service
R46116 · VERSION 1 · NEW
43
nothing.
Author Contact Information
Ryan J. Rosso, Analyst in Health Care Financing
([email address scrubbed], [phone number scrubbed])
Noah D. Isserman, Analyst in Health Insurance and Financing
([email address scrubbed], [phone number scrubbed])
Wen S. Shen, Legislative Attorney
([email address scrubbed], [phone number scrubbed])
Footnotes
| 1.
|
A consumer may be surprised to receive larger-than-expected medical bills for other reasons. For example, the surprise component may arise because a consumer misunderstands the terms of his or her health insurance policy and receives a bill for an unexpected amount. In another example, a consumer may be covered under a plan with different cost-sharing amounts for emergency services and other nonemergency services (e.g., the plan has higher cost sharing to disincentivize emergency department use as compared with care that can be provided in another outpatient setting). In the event a consumer receives a bill for services furnished in an emergency department of a hospital, the consumer may be surprised to receive a bill for a larger amount than expected because the insurer determined that the visit was not an emergency. Such other reasons generally are outside the scope of this report and are not included in this report's usage of the term surprise billing.
|
| 2.
|
In some instances, an insurer may jointly negotiate with multiple entities. For example, an insurer may negotiate one contract with a large health system that combines physicians and hospitals.
|
| 3.
|
The negotiated amount an insurer pays for particular services typically varies among all providers that have contracted with the insurer. Such discrepancies may be the result of various factors, including provider and insurer market concentration.
|
| 4.
|
Some services may be provided without cost to the consumer. For example, plans generally are required to provide coverage for certain preventive health services without imposing cost sharing. 42 U.S.C. §300gg-13.
|
| 5.
|
For definitions of such cost-sharing terms, see Centers for Medicare & Medicaid Services (CMS), Glossary, at https://www.healthcare.gov/glossary/.
|
| 6.
|
See footnote 11 and "Emergency Services."
|
| 7.
|
CMS, "UCR (Usual, Customary, and Reasonable)," at https://www.healthcare.gov/glossary/ucr-usual-customary-and-reasonable/.
|
| 8.
|
Loren Adler et al., State Approaches to Mitigating Surprise Out-of-Network Billing, USC-Brookings Schaeffer Initiative for Health Policy, February 2019, p. 6, at https://www.brookings.edu/wp-content/uploads/2019/02/Adler_et-al_State-Approaches-to-Mitigating-Surprise-Billing-2019.pdf. Hereinafter, Adler et al., State Approaches.
|
| 9.
|
Under federal statute, plans that cover in-network emergency services are required to cover out-of-network emergency services, even if the plan would not otherwise cover other out-of-network care. See "Emergency Services." For ease of discussion, this report will use the term plans that do not cover out-of-network services to describe plans that do not contribute some amount to pay for out-of-network care with this exception.
|
| 10.
|
A consumer generally is also responsible for the entire bill if he or she receives a service that is not covered by the plan (i.e., an excluded service), regardless of whether they received the service from an in-network provider.
|
| 11.
|
Emergency services include medical screening examinations that are within the capability of the emergency department of a hospital and any further medical examination and treatment that are within the capabilities of the staff and facilities available at the hospital and necessary to stabilize the consumer. The plan is also required to cover emergency services without the need for any prior authorization and without the imposition of coverage limitations. 42 U.S.C. §300gg-19a(b). For a description of the distinction between self-insured and fully funded plans and how federal private health insurance requirements apply to such plans, see CRS Report R45146, Federal Requirements on Private Health Insurance Plans.
|
| 12.
|
If there is no per-service amount negotiated with in-network providers (such as under a capitation or other similar payment arrangement), this amount is disregarded and insurers determine an appropriate total allowed amount based on the other two factors. 45 C.F.R. §147.138(b)(3)(i)(A).
|
| 13.
|
45 C.F.R. §147.138(b)(3). The greatest-of-three payment standard does not apply in cases where state law prohibits a consumer from being balanced billed or where the issuer is contractually responsible for such amounts. 45 C.F.R. §147.138(b)(3)(iii).
|
| 14.
|
42 U.S.C. §300gg-19a(b)(1)(C)(ii)(II) and 45 C.F.R. §147.138(b)(3).
|
| 15.
|
In the event that the total allowed amount determined in accordance with 45 C.F.R. §147.138(b)(3) is larger than the negotiated rate for in-network services, the consumer would pay a larger amount for the out-of-network services as compared with the in-network services, even though the coinsurance rate would be identical. The opposite would be true should the total allowed amount determined in accordance with 45 C.F.R. §147.138(b)(3) be smaller than the negotiated rate for in-network services.
|
| 16.
|
45 C.F.R. §156.230. In general, health insurance plans offered through exchanges must be qualified health plans (QHPs). As defined in 42 U.S.C. §18021, a QHP is a plan that is offered by a state-licensed health insurance issuer that meets specified requirements, is certified by an exchange, and covers the essential health benefits (EHB) package. For more information on essential health benefits, see CRS In Focus IF10287, The Essential Health Benefits (EHB).
|
| 17.
|
Maanasa Kona, The Commonwealth Fund, State Balance Billing Protections, July 31, 2019, at https://www.commonwealthfund.org/publications/maps-and-interactives/2019/jul/state-balance-billing-protections. Hereinafter Kona, State Balance Billing Protections.
|
| 18.
|
Kona, State Balance Billing Protections, Jack Hoadley, Sandy Ahn, and Kevin Lucia, The Center on Health Insurance Reforms, Balance Billing: How Are States Protecting Consumers from Unexpected Charges?, June 2019, at https://www.rwjf.org/en/library/research/2015/06/balance-billing—how-are-states-protecting-consumers-from-unexpe.html (hereinafter Hoadley, Ahn, and Lucia, Balance Billing), and National Academy of State Health Policy (NASHP), Comprehensive State Laws Enacted to Address Surprise Balance Billing, March 2019, at https://nashp.org/wp-content/uploads/2019/03/Surprise-Billing-Laws-Chart-final-for-pdf-3.14.19.pdf (hereinafter NASHP, Comprehensive State Laws).
|
| 19.
|
NASHP, Comprehensive State Laws.
|
| 20.
|
Adler, et al., State Approaches, p. 30.
|
| 21.
|
Of the four states that attempted to limit air ambulance balance billing, as identified by the Government Accountability Office (GAO) in its report on air ambulance private health insurance billing, three faced litigation regarding such laws and regulations. One case was dismissed for lack of subject matter jurisdiction, and the other two cases were decided with both state policies being preempted by the Airline Deregulation Act of 1978. GAO, Air Ambulance: Available Data Show Privately-Insured Patients Are at Financial Risk, March 20, 2019, p. 21, at https://www.gao.gov/assets/700/697684.pdf. Hereinafter, GAO, Air Ambulance.
|
22.
|
The summary of Title IV of the amendment in the nature of a substitute (ANS) to H.R. 2328 in the Appendix also incorporates language from amendments to the ANS related to surprise billing, including the amendment to the ANS offered by Rep. Ruiz and Rep. Bucshon. A full list of all amendments can be found in the Appendix footnotes.
| 23.
|
For an overview of federal requirements on private health insurance plans, see CRS Report R45146, Federal Requirements on Private Health Insurance Plans.
|
| 24.
|
Consumers may have other types of private coverage (e.g., short-term, limited-duration insurance) that may not be subject to the same requirements applicable to individual, small-group, large-group, or self-insured plans.
|
| 25.
|
It is unclear the extent to which self-insuring entities within the state have opted in. P.L. 2018, Chapter 32, 218th Legislature (2018), New Jersey, at https://www.njleg.state.nj.us/2018/Bills/AL18/32_.PDF.
|
| 26.
|
Zack Cooper, Fiona Scott Morton, and Nathan Shekita, Surprise! Out-Of-Network Billing for Emergency Care in the United States, National Bureau of Economic Research, Working Paper no. 23623, July 2017, Revised January 2018 p. 32. Hereinafter, Cooper, Scott Morton, and Shekita, Surprise!
|
| 27.
|
The Federal Employees Health Benefits (FEHB) Program provides health insurance to federal employees, retirees, and their dependents. For more information on this program, see CRS Report R43922, Federal Employees Health Benefits (FEHB) Program: An Overview.
|
| 28.
|
Christopher Garmon and Benjamin Chartock, "One in Five Inpatient Emergency Department Cases May Lead to Surprise Bills," Health Affairs, vol. 36, no. 1 (2017), at https://www.healthaffairs.org/doi/pdf/10.1377/hlthaff.2016.0970. Hereinafter, Garmon and Chartock, "One in Five." The authors looked at a nationwide claims database that included claims from 2007 to 2014 for individuals with employer-sponsored health insurance. Such data may not be representative of all private insurers.
|
| 29.
|
Eric C. Sun et al., "Assessment of Out-of-Network Billing for Privately Insured Patients Receiving Care in In-Network Hospitals," August 12, 2019. Hereinafter, Sun et al., "Assessment of Out-of-Network Billing." The authors looked at a nationwide health insurance claims database that included claims from 2010 to 2016 for individuals from all 50 states receiving private health insurance from a large commercial insurer. Such data may not be representative of all private insurers.
|
| 30.
|
Adler, et al., State Approaches, p. 4, and Cooper, Scott Morton, and Shekita, Surprise!, p. 3.
|
| 31.
|
Other market forces also affect a provider's decision to join a network (e.g., provider or insurer market concentration, reputational concerns).
|
| 32.
|
Researchers have hypothesized that one of the largest emergency department physician staffing companies (TeamHealth) has leveraged its ability to go out of network to facilitate higher in-network payment rates for services during negotiations with insures. TeamHealth, along with another large emergency department physician staffing company, EmCare, which has a high rate of out of network billing according to researchers, were both recently acquired by private equity firms and were explicitly identified in a press release announcing the launch of a congressional investigation into private equity firms' role in surprise billing. Cooper, Scott Morton, and Shekita, Surprise!, p. 25. House Committee on Energy and Commerce, "Pallone and Walden Launch Bipartisan Investigation into Private Equity Firms' Role in Surprise Billing Practices," press release, September 16, 2019, at https://energycommerce.house.gov/newsroom/press-releases/pallone-and-walden-launch-bipartisan-investigation-into-private-equity-firms.
|
| 33.
|
For research on the prevalence of surprise medical billing among different specialties, see Kevin Kennedy, Bill Johnson, and Jean Funglesten Biniek, "Surprise Out-of-Network Medical Bills During In-Network Hospital Admissions Varied by State and Medical Specialty, 2016," #HealthyBytes (blog), Health Care Cost Institute, March 28, 2019, at https://www.healthcostinstitute.org/blog/entry/oon-physician-bills-at-in-network-hospitals; and Sun et al., "Assessment of Out-of-Network Billing."
|
| 34.
|
GAO, Air Ambulance, p. 8.
|
| 35.
|
GAO acknowledges that its findings "reflect the subset of transports in the FAIR Health data set with information on network status." FAIR Health is an "independent, nonprofit organization that collects data [from private insurers] for and manages a database of private health insurance claims data." The FAIR Health data set may not be representative of all private insurers. GAO, Air Ambulance, p. 16.
|
| 36.
|
Restrictions on the total consumer liability in certain billing situations would not necessarily mean that the provider would receive an offsetting amount from a consumer's plan (i.e., that the total amount the provider received for such services would be equal to what he or she would have received under current law). Therefore, surprise billing proposals that include consumer financial protections also generally include provisions that would address the amount providers would receive for such services (e.g., by incorporating a benchmark payment for services, by incorporating an arbitration process that would be used to determine payment for such services). In other words, most surprise billing proposals effectively specify how the costs associated with a reduced consumer payment should be shared between the consumer, insurer, and provider. Such considerations are discussed further in "How Could a Proposal Address Insurer and Provider Financial Responsibilities in Surprise Billing Situations?"
|
| 37.
|
For example, a proposal could address only plans that cover out-of-network care (i.e., the proposal would not address other consumer costs), as is the case with some surprise billing protections in Arizona. Kona, State Balance Billing Protections.
|
| 38.
|
NASHP, Comprehensive State Laws.
|
| 39.
|
42 U.S.C. §300gg-19a(b)(1)(C)(ii)(II) and 45 C.F.R. §147.138(b)(3)(ii).
|
| 40.
|
For out-of-network services, this amount is referred to as the total allowed amount. See "Insurer Pays for Out-Of-Network Services."
|
| 41.
|
Balance billing does not occur when insurers do not contribute any amount toward an out-of-network service.
|
| 42.
|
Hoadley, Ahn, and Lucia, Balance Billing, p. 6.
|
| 43.
|
Kona, State Balance Billing Protections.
|
| 44.
|
Under current law, plans that cover emergency services are required to contribute some amount to a provider that furnishes out-of-network emergency services to a consumer, even if it would not contribute any amount for services furnished by other types of out-of-network service providers. Therefore, emergency service cost-sharing requirements and balance billing restrictions would apply to all plans that cover emergency services, regardless of whether the plan would cover any other out-of-network services. See "Emergency Services" and 42 U.S.C. §300gg-19a.
|
| 45.
|
For example, Arizona's surprise billing arbitration process does not apply to health plans that exclude out-of-network coverage. Arizona Department of Insurance, Surprise Out-of-Network Bill Dispute Resolution, at https://insurance.az.gov/soonbdr.
|
| 46.
|
Under current law, consumers with plans that cover out-of-network benefits generally pay less out-of-pocket for out-of-network services than consumers enrolled in plans that do not cover out-of-network services.
|
47.
|
Using Figure 1 as an example, this would effectively make column 3 situations function similar to column 2 situations, though other requirements in the proposal may limit the extent to which a provider may balance bill.
| 48.
|
For an example of explicit language, see 42 U.S.C. §300gg-19a(b)(1)(B) and "Emergency Services."
|
| 49.
|
Although such requirements may reduce the prevalence of surprise billing, consumers who receive out-of-network care, expectedly or unexpectedly, still may be balance billed or responsible for other consumer costs.
|
| 50.
|
Many states require insurers to provide consumers with information in plan summaries regarding the financial consequences of going out of network. Hoadley, Ahn, and Lucia, Balance Billing.
|
| 51.
|
There are some existing federal private health insurance provider directory requirements, which apply to insurers offering plans on exchanges. 45 C.F.R. 156.230(b).
|
| 52.
|
With respect to alternative dispute resolution, this report will focus on arbitration. Another type of alternative dispute resolution is mediation. The state of Texas passed a law that requires providers and insurers to use a mediation process to settle payment disputes for surprise bills over $500.
|
| 53.
|
The Massachusetts Health Policy Commission evaluated Massachusetts claims data to produce a study that illustrates how payments to Massachusetts providers for certain services would vary under different benchmarks. Massachusetts Health Policy Commission, The Price is Right? Variation in Potential Out-of-Network Provider Payment Benchmarks, August 14, 2019, at https://www.mass.gov/files/documents/2019/08/12/Datapoints_OON.pdf.
|
54.
|
Daria Pelech, An Analysis of Private-Sector Prices for Physicians Services, Congressional Budget Office, Working Paper 2018-01, January 2018, at https://www.cbo.gov/publication/53441, Erin Trish et al., "Physician Reimbursement in Medicare Advantage Compared with Traditional Medicare and Commercial Health Insurance," JAMA Internal Medicine, vol. 177, no. 9 (September 2017), pp. 1287-1295, at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5710575/.
| 55.
|
As an example, the state of California established a payment standard requiring insurers to pay the greater of the average contracted rate for a service or 125% of Medicare.
|
| 56.
|
Massachusetts Health Policy Commission, HPC Datapoints: The Price is Right? Variation in Potential Out-of-Network Provider Payment Benchmarks, August 14, 2019.
|
| 57.
|
Not all states have established state all-payer claims databases (APCDs). All-Payer Claims Database Council, Interactive State Report Map, at https://www.apcdcouncil.org/state/map.
|
| 58.
|
States that have established APCDs do not collect data on plans preempted from state regulation by the Employee Retirement Income Security Act (ERISA). Gobeille v Liberty Mutual Insurance Co. 136 S. Ct. 936 (2016).
|
| 59.
|
The federal proposal is Title IV of the Amendment in the Nature of a Substitute to H.R. 2328 (as offered by Rep. Pallone), 116th Cong. (2019). Jack Hoadley, Kevin Lucia, and Maanasa Kona, States Are Taking New Steps to Protect Consumers from Balance Billing, But Federal Action is Necessary to Fill Gaps, The Commonwealth Fund, at https://www.commonwealthfund.org/blog/2019/states-are-taking-new-steps-protect-consumers-balance-billing-federal-action-necessary.
|
| 60.
|
Cooper, Scott Morton, and Shekita, Surprise!
|
| 61.
|
45 C.F.R. 156.230.
|
| 62.
|
CMS, 2019 Letter to Issuers in the Federally Facilitated Exchanges, April 9, 2018, at https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/2019-Letter-to-Issuers.pdf.
|
| 63.
|
Garmon and Chartock, "One in Five." Munira Z. Gunja et al., Americans' Experiences with ACA Marketplace Coverage: Affordability and Provider Network Satisfaction, The Commonwealth Fund, July 2016, at https://www.commonwealthfund.org/sites/default/files/documents/___media_files_publications_issue_brief_2016_jul_1883_gunja_americans_experience_aca_marketplace_affordability_v2.pdf. Mark A. Hall and Paul B. Ginsburg, A Better Approach to Regulating Provider Network Adequacy, USC-Brookings Schaeffer Initiative for Health Policy, September 2017, at https://www.brookings.edu/wp-content/uploads/2017/09/regulatory-options-for-provider-network-adequacy.pdf.
|
| 64.
|
Loren Adler, Matthew Fielder, and Benedic Ippolito, "Network Matching: An Attractive Solution to Surprise Billing," Health Affairs, May 29, 2019, at https://www.healthaffairs.org/do/10.1377/hblog20190523.737937/full/.
|
| 65.
|
The Department of Labor would be responsible for enforcing regulations on plans regulated under ERISA (i.e., self-funded plans). The Department of Health and Human Services (HHS) would be responsible for implementation and enforcement when regulating health plans under the Public Health Service Act (PHSA), including fully insured plans in the individual and small-group markets.
|
| 66.
|
See, for example, 42 U.S.C. §§1320a-7a(c) and 1395dd(d)(2).
|
| 67.
|
See, for example, 42 U.S.C. §1395dd(d)(1).
|
| 68.
|
See, for example, S. 3592, 115th Cong. (2018); S. 1531, 116th Cong. (2019).
|
| 69.
|
See 29 U.S.C. §1185d; 26 U.S.C. §9815.
|
| 70.
|
See 42 U.S.C. §300gg-22; 29 U.S.C. §1132; 26 U.S.C. §4980D.
|
| 71.
|
42 U.S.C. §300gg-21(a)(1).
|
| 72.
|
42 U.S.C. §300gg-21(a)(1). Title XXVII of the PHSA also applies to nonfederal governmental group plans. See §300gg-21(a)(2). The Secretary of HHS is the primary enforcer of the PHSA requirements as to these governmental plans. See §300gg-22(b)(1)(B). Prior to enactment of the ACA, these governmental plans could elect to exempt their plans from certain requirements under Title XXVII of the PHSA. See §300gg-21(a)(2)(A). This opt-out election, however, does not apply to the provisions added to the PHSA by the ACA. See §300gg-21(a)(2)(E).
|
| 73.
|
Although the statute does not specify what a state needs to do in order to be considered "substantially enforcing" the PHSA's requirements, regulations outline the procedure the HHS Secretary must follow in making a determination as to whether federal enforcement is needed. See 45 C.F.R. §§150.207 et seq. In general, if CMS, on behalf of the Secretary, receives a complaint or other information indicating that a state is failing to enforce PHSA's requirements, it must assess the information received and consider whether the complainant had made reasonable efforts to exhaust available state remedies. 45 C.F.R. §150.209. If CMS determines there is a reasonable question on whether there has been a substantial failure to enforce, it would issue a written notice to the relevant state officials and provide the state an opportunity to respond. 45 C.F.R. §150.213. If CMS makes a preliminary determination that the state has not substantially enforced the PHSA, it would provide the state with a reasonable opportunity to correct such failure and demonstrate evidence of enforcement. 45 C.F.R. §150.217. If the state cannot do so within the applicable timeline, CMS would issue the state a written notice of its final determination that also identifies the PHSA requirements that CMS would be enforcing. 45 C.F.R. §150.219.
|
| 74.
|
42 U.S.C. §300gg-22(a)(2).
|
| 75.
|
42 U.S.C. §300gg-22(b)(2)(C)(i).
|
| 76.
|
42 U.S.C. §300gg-22(b)(2)(C)(i). With respect to self-funded government group plans, the HHS Secretary is the primary enforcer of the PHSA requirements. 42 U.S.C. §300gg-21(a)(2)(A).
|
| 77.
|
42 U.S.C. §300gg-22(b)(3)(E). As of April 8, 2016, Missouri, Oklahoma, Texas, and Wyoming have notified CMS that they do not have the authority to enforce or are not otherwise enforcing the PHSA's requirements pertaining to the ACA's insurance market reform provisions. See CMS, Center for Consumer Information & Insurance Oversight, "Compliance and Enforcement," at https://www.cms.gov/cciio/programs-and-initiatives/health-insurance-market-reforms/compliance.html (last accessed on July 12, 2019). CMS thus has the responsibility to enforce these provisions in those states.
|
| 78.
|
See 29 U.S.C. §1181.
|
| 79.
|
29 U.S.C. §1132(b)(3).
|
| 80.
|
29 U.S.C. §1132(a).
|
| 81.
|
29 U.S.C. §1132(a)(1)(B).
|
| 82.
|
See 26 U.S.C. §§9801, 9832(a), 5000(b)(1).
|
| 83.
|
26 U.S.C. §4980D.
|
| 84.
|
26 U.S.C. §4980D.
|
| 85.
|
See 26 U.S.C. §4890D(c).
|
| 86.
|
See 26 U.S.C. §§6671-6672.
|
| 87.
|
See footnotes 71, 78 & 82.
|
| 88.
|
See, for example, Lars Noah, Ambivalent Commitments to Federalism in Controlling the Practice of Medicine, 53 Univ. Kan. L. Rev. 149, 149-50 (2004).
|
| 89.
|
See footnotes 90 and 91.
|
| 90.
|
42 U.S.C. §1320a-7a(a) & (b).
|
| 91.
|
42 U.S.C. §1320a-7a(c). Other examples of federal regulations on health care providers may be found under the Controlled Substances Act (CSA) and the Federal Food, Drug & Cosmetic Act (FD&C Act). The CSA imposes certain registration, recordkeeping, and other requirements on health care providers and other "registrants" as part of its regulatory framework governing the manufacture, distribution, and use of certain controlled substances (including prescription drugs). 21 U.S.C. §822(a). The CSA generally enforces these regulatory requirements through civil penalties. 21 U.S.C. §842(c). Certain "knowing" violations may subject a violator to imprisonment of up to two years. 21 U.S.C. §842(c)(2). Under the FD&C Act, the Federal Drug Administration (FDA) may require certain new drugs or biologics to be subject to a distribution safety protocol known as Risk Evaluation and Mitigation Strategies (REMS), which may impose certain dispensing or prescriber requirements on health care providers. See 21 U.S.C. §355-1(e) and (f). Violation of REMS requirements may subject a provider to an FDA enforcement action and civil penalties. See 21 U.S.C. §355(p), 21 U.S.C. §311(a) & (d).
|
| 92.
|
See, for instance, S. 1895, Section 102(b) creating PHSA Section 2795(a). This provision would impose a civil monetary penalty of no more than $10,000 on a provider for violating certain prohibitions and requirements under the bill and would authorize the HHS Secretary to initiate enforcement actions against a provider.
|
| 93.
|
See, for instance, S. 1895, Section 102(b) creating PHSA Section 2795(c)(3). This provision would direct the HHS Secretary to waive the penalties under the bill if the provider has already been subject to enforcement action under applicable state law for a violating conduct.
|
| 94.
|
Kona, State Balance Billing Protections.
|
| 95.
|
As discussed in "Federal and State Regulation of Insurance" in this report, states are precluded from being able to regulate self-insured health plans and therefore have not been able to require that such plans adhere to state surprise billing requirements. However, at least one state (New Jersey) has allowed self-insuring entities to opt in to such requirements. It is unclear the extent to which self-insuring entities within the state have opted in. P.L. 2018, Chapter 32, approved June 1, 2018. Assembly No. 2039, at https://www.njleg.state.nj.us/2018/Bills/AL18/32_.PDF.
|
| 96.
|
In addition, to the extent that a state applies different surprise billing policies on health maintenance organization (HMO) plans and preferred provider organization (PPO) plans, there could be additional discrepancies. For example, as of July 31, 2019, Indiana, Rhode Island, and West Virginia applied surprise billing protections only to HMO plans. Kona, State Balance Billing Protections.
|
| 97.
|
Agency for Healthcare Research and Quality, Table II.B.2.b.(1), "Percent of Private-Sector Enrollees That Are Enrolled in Self-Insured Plans at Establishments That Offer Health Insurance by Firm Size and State: United States, 2017," in Medical Expenditure Panel Survey-Insurance Component, at, https://meps.ahrq.gov/data_stats/summ_tables/insr/state/series_2/2017/tiib2b1.pdf. Hereinafter, Agency for Healthcare Research and Quality, "Percent of Private-Sector Enrollees."
|
| 98.
|
Agency for Healthcare Research and Quality, "Percent of Private-Sector Enrollees."
|
| 99.
|
Although a surprise billing policy that would establish a benchmark approach also would create administrative costs for insurers, the Congressional Budget Office (CBO) has estimated that insurer administrative costs associated with a benchmark approach would be smaller than insurer administrative costs associated with complying with an arbitration process. "Title IV, No Surprises Act" section of CBO score of H.R. 2328. Congressional Budget Office, H.R. 2328, Reauthorizing and Extending America's Community Health Act, September 18, 2019, at https://www.cbo.gov/system/files/2019-09/hr2328.pdf. Hereinafter, CBO, H.R. 2328, Reauthorizing and Extending America's Community Health Act.
|
| 100.
|
Other aspects of the bills are estimated to have additional impacts on providers and insurers. See CBO, H.R. 2328, Reauthorizing and Extending America's Community Health Act and Congressional Budget Office, S. 1895, Lower Health Care Costs Act, July 16, 2019, at https://www.cbo.gov/system/files/2019-07/s1895.pdf (hereinafter, CBO, S. 1895, Lower Health Care Costs Act).
|
| 101.
|
CBO, H.R. 2328, Reauthorizing and Extending America's Community Health Act, and CBO, S. 1895, Lower Health Care Costs Act.
|
| 102.
|
CBO, H.R. 2328, Reauthorizing and Extending America's Community Health Act.
|
| 103.
|
California Office of Administrative Law, Register 2018, No. 31−Z, August 3, 2018, pp. 1225, 1227-1228, at https://oal.ca.gov/wp-content/uploads/sites/166/2018/08/31z-2018.pdf.
|
| 104.
|
Colorado Department of Regulatory Agencies, Report of the Commissioner of Insurance to the Colorado General Assembly on 10-16-704(3), C.R.S. Consumer Protections Against Balance Billing, January 21, 2010, p. 8, at http://hermes.cde.state.co.us/drupal/islandora/object/co%3A8599/datastream/OBJ/view.
|
| 105.
|
Colorado Department of Regulatory Agencies, Report of the Commissioner of Insurance to the Colorado General Assembly on 10-16-704(3), C.R.S. Consumer Protections Against Balance Billing, January 21, 2010, p. 8, at http://hermes.cde.state.co.us/drupal/islandora/object/co%3A8599/datastream/OBJ/view.
|
| 106.
|
Linda A. Lacewell, New York's Surprise Out-Of-Network Protection Law: Report on the Independent, New York State Department of Financial Services, September 2019, at https://www.dfs.ny.gov/system/files/documents/2019/09/dfs_oon_idr.pdf.
|
| 107.
|
For example, in Texas in 2014, 56% of hospitals within Humana's network did not have an emergency room physician within the insurer network. This figure compared with a rate of 45% and 21% for United and Blue Cross, respectively. Stacey Pogue and Megan Randall, Surprise Medical Bills Take Advantage of Texans, Center for Public Policy Priorities, September 15, 2014, p. 3, at https://forabettertexas.org/images/HC_2014_09_PP_BalanceBilling.pdf.
|
| 108.
|
CBO, H.R. 2328, Reauthorizing and Extending America's Community Health Act, and CBO, S. 1895, Lower Health Care Costs Act.
|
| 109.
|
In the event that a consumer receives a service that is not covered by the plan, the consumer generally is responsible for the entire bill, regardless of whether the service was provided by an in-network provider. Such amounts are also considered other consumer costs.
|
| 110.
|
Such interpretations are appropriately indicated within the table.
|