May 16, 2019
On May 16, House Energy & Commerce Committee Chairman Frank Pallone (D-NJ) and Ranking Member Greg Walden (R-OR) released a discussion draft of the No Surprises Act, a bill designed to protect consumers from surprise medical bills from out-of-network providers in certain situations. Specifically, the bill caps cost-sharing obligations for patients who receive care from out-of-network providers at in-network levels and requires plans to pay those providers the difference between the patient’s in-network rate and a benchmark minimum rate (established by the state or based on the median in-network/contracted rate for the plan within a particular geographic region for the same item or service) in the following circumstances:
- When a patient receives emergency care from an out-of-network provider or non-participating emergency department/facility; and
- For plan years beginning on or after January 1, 2021, when a patient receives care from an out-of-network provider at an in-network facility (e.g., hospitals, labs, radiology centers, etc.).
Unlike some states that have created arbitration schemes or independent dispute resolution mechanisms, the legislation appears to only set forth the minimum payment benchmark and associated payment obligations for plans, not a formal process for resolving payment disputes between insurers and out-of-network providers (despite somewhat contrary indications in the Committee’s summary of the bill).
The bill also allows, beginning in 2021, for civil monetary penalties against providers who seek to hold patients liable for more than their in-network cost-sharing amount in the scenarios described above. An exception applies, however, in non-emergency circumstances when the patient’s treatment is scheduled in advance. In these cases, civil penalties will not be applicable if:
- The provider furnishes and the patient receives advance oral and written notice of the provider’s out-of-network status and the estimated amount the patient will be charged for the item/service involved; and
- The patient consents in writing at least 24 hours prior to the treatment by the out-of-network provider and acknowledges that receipt of such services may result in charges greater than if the services were furnished by an in-network provider.
Finally, the bill aims to encourage states to establish all payer claims databases by appropriating $50 million for state grants to establish or maintain such databases.