Legislative Initiatives

Surprise Bills
By Michael Dugan
Capitol Consulting LLC
February 15, 2016

During the 2015 legislative session a significant piece of legislation impacting emergency services was included in a major hospital reform proposal.  If unchanged by the General Assembly during the 2016 session, these sections on emergency services will take effect on July 1, 2016.

Public Act 15-146 (formerly SB 811, An Act Concerning Hospitals, Insurers and Health Care Consumers) was approved in the closing days of the session by the House on a 98 to 43 vote and just two days later by the Senate without opposition.  Governor Malloy signed this act into law on June 30, 2015.

Prior Authorization/Out-of-Network Providers
Of interest to emergency medicine this act prohibits health carriers from requiring prior authorization for emergency services.  PA 15-146 prohibits health carriers from charging an insured a coinsurance, copayment, deductible, or other out-of-pocket expense for emergency services performed by an out-of-network health care provider that is greater than that charged when performed by an in-network provider.

The act goes on to require health carriers to reimburse out-of-network providers who perform emergency services for those that are insured the greatest of the: (1) amount the health care plan would pay if the services were rendered by an in-network provider; (2) usual, customary, and reasonable rate; or (3) amount Medicare reimburses for those services.  A health carrier and an out-of-network provider may agree to a greater reimbursement amount.  The health care provider may bill the carrier directly.

Defining “Usual, Customary, and Reasonable Rate”
Under the act “usual, customary, and reasonable rate” means the 80th percentile of all charges for the service performed by a health care provider in the same or similar specialty and provided in the same geographical area, as reported in a benchmarking database maintained by a nonprofit organization specified by the Insurance Commissioner.  That organization must not be affiliated with a health carrier.

As used in this section, “health carriers” include health insurers, HMOs, fraternal benefit societies, hospital and medical service corporations, and other entities that issue health care plans in Connecticut. “Emergency services” are medical screenings to evaluate an emergency condition and examinations and treatment to stabilize the patient.

The act requires each health carrier to tell a covered person or their health care professional, when the person or professional requests a prospective or concurrent benefit review:
1. the professional's network status under the person's health benefit plan;
2. the estimated amount the health carrier will reimburse the professional; and
3. how that amount compares to the usual, customary, and reasonable charge, as determined by the federal Center for Medicare and Medicaid Services.

Under the act, if an out-of-network provider renders services to an insured and the health carrier did not inform the insured of the provider’s network status, the health carrier is prohibited from imposing a coinsurance, copayment, deductible, or other out-of-pocket expense that is more than what would be imposed if an in-network provider rendered services.

Surprise Bills
Under the act, if an insured receives a surprise bill, the insured is only required to pay the coinsurance, copayment, deductible, or other out-of-pocket expense that would apply if an in-network provider had rendered the services. A health carrier must reimburse an out-of-network provider or insured, as applicable, for the services at the in-network rate under the plan as payment in full, unless the carrier and provider agree otherwise.

The act requires a health carrier to include a description of what constitutes a surprise bill (1) in the insurance policy, certificate of coverage, or handbook given to a covered person and (2) prominently displayed on its website.

Under the act, a “surprise bill” is a bill for non-emergency health care services received by an insured for services rendered by an out-of-network provider at an in-network facility during a service or procedure that was performed by an in-network provider or previously approved by the health carrier, and the insured did not knowingly elect to receive the services from the out-of-network provider.  A bill is not a surprise bill if an in-network provider is available but an insured knowingly elects to receive services from an out-of-network provider.

Unfair Billing Practices by Health Care Providers
The act expands what constitutes an unfair trade practice by a health care provider.  Under prior law, it was an unfair trade practice for a health care provider to request payment from a managed care plan enrollee for covered services, except for a copayment or deductible.

The act instead makes it an unfair trade practice for a health care provider to request payment from a health care plan enrollee, except for a copayment, deductible, coinsurance, or other out-of-pocket expense, for:
1. covered health care services or facility fees,
2. covered emergency services rendered by an out-of-network provider, or
3. a surprise bill.

The act also makes it an unfair trade practice for a health care provider to report to a credit-reporting agency an enrollee’s failure to pay a bill for the above listed items when a health carrier has primary responsibility for paying.  Under prior law, it was an unfair trade practice to report to a credit reporting agency an enrollee's failure to pay a bill for medical services that a managed care organization had primary responsibility for paying.

The act requires contracts between HMOs and participating providers to reflect what constitutes an unfair trade practice, as described above.

Summary taken from the Office Legislative Research report on PA 15-146.