Thank you for taking action!
SB 259 "Out-of-Network Health Care Provider Charges" was defeated thanks to you and organized medicine!
Our analysis of this bill was that:
- The issues surrounding OON provider charges are more complex than those addressed in this legislation. Not all providers choose to be out of network. Plans are narrowing their networks and are deselecting physicians without cause and disrupting continuity of care between physicians and patients.
- The bill provides unfair bargaining power to health plans during contract negotiations with physicians, even with larger multi and single-specialty practices. These negotiations are often conducted between Fortune 100 insurance companies with huge infrastructure and small physician practices. One of the last remaining bargaining points physicians have is not contracting in order to compel plans to set fair and reasonable business terms for in-network services. Allowing plans to pay their average in network rate for the relevant geographic area places a cap on OON charges, and de facto sets the contract (par) rates. This, in effect, is a rate regulation by health plans.
- The required filing of a lawsuit to collect reasonable OON charges will increase administrative burdens and practice costs on already stressed physician practices. This absolutely adds to physician administrative costs and is literally not financially sustainable for physicians.
- Before services are rendered physicians will be required to notify insured persons of "out of network" status if reasonably practicable. The provider's OON status will often not be known given multiple products being sold by individual health plans and the movement to commercial narrow network plans also being sold. Such notification places the consumer in the untenable position of making a last minute choice or being liable for OON charges.
- Capping out-of-network payments to "at least carrier's average in network rate for the relevant geographic area" will incentivize plans to set their in network rates very low (see Report of Office of the Attorney General, State of NY, The Consumer Reimbursement System is Code Blue - legal precedence that carrier's do not set reimbursement at a fair and reasonable amount.)
- Health plans are required under current law to hold the patient harmless from OON billings. Health plans have failed to put adequate processes in place to assure that these consumer protections are implemented. As a result, consumers are complaining that they feel obligated to pay the OON provider themselves.
- Charitable hardship exemptions will go by the wayside. Threatening physicians with additional liability exposure will shut down charitable hardship exemptions. The bill does not state how carriers will determine if the insured did not qualify for a charitable exemption or what proof would be necessary. The plans will have the unfettered ability to declare that a particular service is a per se deceptive business practice and the physician would have to sue in civil court to get paid for services.
The provisions of this bill are such that when a physician provides out-of-network (OON) services in an emergency or at an in-network facility:
- The OON provider, who does not have a contract with the health plan, is required to submit a bill to the person's health plan, and not collect any payment from the patient, beyond deductibles, copayment and coinsurance and is prohibited from any further balance billing of the patient.
- The health plan is allowed to reimburse the OON physician the average in-network or contract rate for the relevant geographic area as established by the health plan.
- To receive more than the average contracted rate established by the health plan, the OON physician must:
1. Prove that the patient was notified of the provider's non-participation status or that providing such disclosure was not "reasonably practicable" (such disclosure will not waive the patient's rights to be held harmless and "reasonably practicable" is not defined); and,
2. Submit a demand for any remaining amount to the health plan.
The health plan is required to either pay the demanded amount or attempt to negotiate the difference. Because there is no requirement that the negotiations meet an agreement or result in additional payment, to collect usual OON charges, a physician will have to hire an attorney, file a civil action, pay the cost of filing the lawsuit, all on a claim-by-claim basis and wait a minimum of 100 days to be paid. This process is burdensome, time consuming, costly for physician practices and simply not realistic.
If a physician, in the course of business, waives any deductible, copayment or coinsurance on any claim:
Except for schools and charitable purpose (substantial financial hardship), the physician, without any due process, could be determined by the health plan to have engaged in deceptive trade practices and forfeits any right to reimbursement. This imposes strict or per se liability for even one waiver of a copay where the health plan contends the insured did not have a substantial hardship, permits the health plan to deny coverage, without any due process for the physician, and forces the physician to sue for his or her reasonable charges.
For non-emergent services with an OON provider:
For non-emergent services with an OON provider, the bill mandates that a physician get a written patient-disclosure/consent that the patient is knowingly seeking services with an OON provider, including upon request from the patient, the amount or estimated amount of the charges to be billed absent unforeseen circumstances. The physician may not bill the person for OON services unless the person has chosen in writing, at or before the time of services to use the OON provider.