2016 -- S 2462 SUBSTITUTE A

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LC004088/SUB A/2

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2016

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A N   A C T

     RELATED TO INSURANCE - SURPRISE BILLS FOR MEDICAL SERVICES

     Introduced By: Senators Archambault, Miller, Nesselbush, Sheehan, and Kettle

     Date Introduced: February 11, 2016

     Referred To: Senate Health & Human Services

     It is enacted by the General Assembly as follows:

     SECTION 1. Title 27 of the General Laws entitled "INSURANCE" is hereby amended

by adding thereto the following chapter:

CHAPTER 81

SURPRISE BILLS FOR MEDICAL SERVICES

     27-81-1. Dispute resolution process established. -- The health insurance commissioner

("commissioner") shall establish a dispute resolution process by which a dispute for a bill for

emergency services or a surprise bill may be resolved. The commissioner shall have the power to

grant and revoke certifications of independent dispute resolution entities to conduct the dispute

resolution process. The commissioner shall promulgate rules and regulations establishing

standards for the dispute resolution process, including a process for certifying and selecting

independent dispute resolution entities. An independent dispute resolution entity shall use

licensed physicians in active practice in the same or similar specialty as the physician providing

the service that is subject to the dispute resolution process of this chapter. To the extent

practicable, the physician shall be licensed in this state.

     27-81-2. Applicability. -- (a) This chapter shall not apply to health care services,

including emergency services, where physician fees are subject to schedules or other monetary

limitations under any other law, including the workers' compensation law, and shall not preempt

any such law.

     (b)(1) With regard to emergency services billed under American Medical Association

current procedural terminology (CPT) codes 99281 through 99285, 99288, 99291 through 99292,

99217 through 99220, 99224 through 99226, and 99234 through 99236, the dispute resolution

process established in this chapter shall not apply when:

     (i) The amount billed for any such CPT code meets the requirements set forth in

subsection (b)(3) of this section, after any applicable co-insurance, co-payment and deductible;

and

     (ii) The amount billed for any such CPT code does not exceed one hundred twenty

percent (120%) of the usual and customary cost for such CPT code.

     (2) The health care plan shall ensure that an insured shall not incur any greater out-of-

pocket costs for emergency services billed under a CPT code as set forth in this subsection than

the insured would have incurred if such emergency services were provided by a participating

physician.

     (3) Beginning January 1, 2017 and each January 1 thereafter, the commissioner shall

publish on a website maintained by the department of business regulation, and provide in writing

to each health care plan, a dollar amount for which bills for the procedure codes identified in this

subsection shall be exempt from the dispute resolution process established in this chapter. Such

amount shall equal the amount from the prior year, beginning with six hundred dollars ($600) in

2016, adjusted by the average of the annual average inflation rates for the medical care

commodities and medical care services components of the consumer price index. In no event

shall an amount exceeding one thousand two hundred dollars ($1,200) for a specific CPT code

billed be exempt from the dispute resolution process established in this chapter.

     27-81-3. Definitions. -- For the purposes of this chapter:

     (1) "Emergency condition" means a medical or behavioral condition that manifests itself

by acute symptoms of sufficient severity, including severe pain, such that a prudent layperson,

possessing an average knowledge of medicine and health, could reasonably expect the absence of

immediate medical attention to result in:

     (i) Placing the health of the person afflicted with such condition in serious jeopardy, or in

the case of a behavioral condition placing the health of such person or others in serious jeopardy;

     (ii) Serious impairment to such person's bodily functions;

     (iii) Serious dysfunction of any bodily organ or part of such person;

     (iv) Serious disfigurement of such person; or

     (v) A condition described in clause (i), (ii) or (iii) of §1867(e)(l)(A) of the Social Security

Act 42 U.S.C. §1395dd;

     (2) "Emergency services" means, with respect to an emergency condition:

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     (i) A medical screening examination as required under §1867 of the Social Security Act,

42 U.S.C. §1395dd, which is within the capability of the emergency department of a hospital,

including ancillary services routinely available to the emergency department to evaluate such

emergency medical condition; and

     (ii) Within the capabilities of the staff and facilities available at the hospital, such further

medical examination and treatment as are required under §1867 of the Social Security Act, 42

U.S.C. §1395dd, to stabilize the patient;

     (3) "Health care plan" means an insurer licensed to write accident and health insurance

pursuant to chapter 18 of title 27; a nonprofit hospital service corporation licensed to write

insurance pursuant to pursuant to chapter 19 of title 27; a nonprofit medical service corporation

licensed to write insurance pursuant to pursuant to chapter 20 of title 27; a health maintenance

organization licensed to write insurance pursuant to chapter 41 of title 27.

     (4) "Insured" means a patient covered under a health care plan's policy or contract.

     (5) "Non-participating" means not having a contract with a health care plan to provide

health care services to an insured.

     (6) "Participating" means having a contract with a health care plan to provide health care

services to an insured.

     (7) "Patient" means a person who receives health care services, including emergency

services, in this state.

     (8)(i) "Surprise bill" means a bill for health care services, other than emergency services,

received by an insured for services rendered by an out-of-network health care provider, where

such services were rendered by such out-of-network provider at an in-network facility, during a

service or procedure performed by an in-network provider or during a service or procedure

previously approved or authorized by the health carrier and the insured did not knowingly elect to

obtain such services from such out-of-network provider;

     (ii) "Surprise bill" does not include a bill for health care services received by an insured

when an in-network health care provider was available to render such services and the insured

knowingly elected to obtain such services from another health care provider who was out-of-

network.

     27-81-4. Billing and reimbursement. -- (a) No health carrier shall require prior

authorization for rendering emergency services to an insured.

     (b) No health carrier shall impose, for emergency services rendered to an insured by an

out-of-network health care provider, a coinsurance, copayment, deductible or other out-of-pocket

expense that is greater than the coinsurance, copayment, deductible or other out-of-pocket

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expense that would be imposed if such emergency services were rendered by an in-network

health care provider.

     (c) If emergency services were rendered to an insured by an out-of-network health care

provider, such health care provider may bill the health carrier directly and the health carrier shall

reimburse such health care provider the greatest of the following amounts:

     (1) The amount the insured's health care plan would pay for such services if rendered by

an in-network health care provider;

     (2) The usual, customary and reasonable rate for such services; or

     (3) The amount Medicare would reimburse for such services. "Usual, customary and

reasonable rate" means the eightieth percentile of all charges for the particular health care 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 commissioner. Such organization shall not be affiliated with any health carrier.

Nothing in this subsection shall be construed to prohibit such health carrier and out-of-network

health care provider from agreeing to a greater reimbursement amount.

     (d) With respect to a surprise bill:

     (1) An insured shall only be required to pay the applicable coinsurance, copayment,

deductible or other out-of-pocket expense that would be imposed for such health care services if

such services were rendered by an in-network health care provider; and

     (2) A health carrier shall reimburse the out-of-network health care provider or insured, as

applicable, for health care services rendered at the in-network rate under the insured's health care

plan as payment in full, unless such health carrier and health care provider agree otherwise.

     (d) If health care services were rendered to an insured by an out-of-network health care

provider and the health carrier failed to inform such insured, if such insured was required to be

informed, of the network status of such health care provider pursuant to the general laws, the

health carrier shall not impose a coinsurance, copayment, deductible or other out-of-pocket

expense that is greater than the coinsurance, copayment, deductible or other out-of-pocket

expense that would be imposed if such services were rendered by an in-network health care

provider.

     27-81-5. Criteria for determining a reasonable fee. -- In determining the appropriate

amount to pay for a health care service, an independent dispute resolution entity shall consider all

relevant factors, including:

     (1) Whether there is a gross disparity between the fee charged by the physician for

services rendered as compared to:

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     (i) Fees paid to the involved physician for the same services rendered by the physician to

other patients in health care plans in which the physician is not participating; and

     (ii) In the case of a dispute involving a health care plan, fees paid by the health care plan

to reimburse similarly qualified physicians for the same services in the same region who are not

participating with the health care plan;

     (2) The level of training, education and experience of the physician;

     (3) The physician's usual charge for comparable services with regard to patients in health

care plans in which the physician is not participating;

     (4) The circumstances and complexity of the particular case, including time and place of

the service;

     (5) Individual patient characteristics; and

     (6) The usual and customary cost of the service.

     27-81-6. Dispute resolution for emergency services. -- (a) Emergency services for an

insured:

     (1) When a health care plan receives a bill for emergency services from a

nonparticipating physician, the health care plan shall pay an amount that it determines is

reasonable for the emergency services rendered by the non-participating physician, except for the

insured's co-payment, co-insurance or deductible, if any, and shall ensure that the insured shall

incur no greater out-of-pocket costs for the emergency services than the insured would have

incurred with a participating physician.

     (2) A non-participating physician or a health care plan may submit a dispute regarding a

fee or payment for emergency services for review to an independent dispute resolution entity

established by the commissioner.

     (3) The independent dispute resolution entity shall make a determination within thirty

(30) days of receipt of the dispute for review.

     (4) In determining a reasonable for the services rendered, the independent dispute

resolution entity shall select either the health care plan's payment or the non-participating

physician's fee. The independent dispute resolution entity shall determine which amount to select

based upon the conditions and factors set forth in §27-81-4. If the independent dispute resolution

entity determines, based on the health care plan's payment and the non-participating physician's

fee, that a settlement between the health care plan and non-participating physician is reasonably

likely, or that both the health care plan's payment and the non-participating physician's fee

represent unreasonable extremes, then the independent dispute resolution entity may direct both

parties to attempt a good faith negotiation for settlement. The health care plan and non-

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participating physician may be granted up to ten (10) business days for this negotiation, which

shall run concurrently with the thirty (30) day period for dispute resolution.

     (b) Emergency services for a patient that is not an insured:

     (1) A patient that is not an insured or the patient's physician may submit a dispute

regarding a fee for emergency services for review to an independent dispute resolution entity

upon approval of the commissioner.

     (2) The independent dispute resolution entity shall determine a reasonable fee for the

services based upon the same conditions and factors set forth in §27-81-4.

     (3) A patient that is not an insured shall not be required to pay the physician's fee in order

to be eligible to submit the dispute for review to the independent dispute resolution entity.

     (c) The determination of the independent dispute resolution entity shall be binding on the

health care plan, physician and patient, and shall be admissible in any court proceeding between

the health care plan, physician or patient, or in any administrative proceeding between this state

and the physician.

     27-81-7. Hold harmless and assignment of benefits for surprise bills for insureds. --

When an insured assigns benefits for a surprise bill in writing to a non-participating physician

that knows the insured is insured under a health care plan, the non-participating physician shall

not bill the insured except for any applicable co-payment, co-insurance or deductible that would

be owed if the insured utilized a participating physician.

     27-81-8. Dispute resolution for surprise bills. -- (a) Surprise bill received by an insured

who assigns benefits.

     (1) If an insured assigns benefits to a non-participating physician, the health care plan

shall pay the non-participating physician in accordance with subsections (2) and (3) of this

section.

     (2) The non-participating physician may bill the health care plan for the health care

services rendered, and the health care plan shall pay the non-participating physician the billed

amount or attempt to negotiate reimbursement with the non-participating physician.

     (3) If the health care plan's attempts to negotiate reimbursement for health care services

provided by a non-participating physician does not result in a resolution of the payment dispute

between the non-participating physician and the health care plan, the health care plan shall pay

the non-participating physician an amount the health care plan determines is reasonable for the

health care services rendered, except for the insured's co-payment, co-insurance or deductible.

     (4) Either the health care plan or the non-participating physician may submit the dispute

regarding the surprise bill for review to an independent dispute resolution entity, provided

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however, the health care plan may not submit the dispute unless it has complied with the

requirements of subsections (a)(1) through (a)(3) of this section.

     (5) The independent dispute resolution entity shall make a determination within thirty

(30) days of receipt of the dispute for review.

     (6) When determining a reasonable fee for the services rendered, the independent dispute

resolution entity shall select either the health care plan's payment or the non-participating

physician's fee. An independent dispute resolution entity shall determine which amount to select

based upon the conditions and factors set forth in §27-81-4. If an independent dispute resolution

entity determines, based on the health care plan's payment and the non-participating physician's

fee, that a settlement between the health care plan and non-participating physician is reasonably

likely, or that both the health care plan's payment and the non-participating physician's fee

represent unreasonable extremes, then the independent dispute resolution entity may direct both

parties to attempt a good faith negotiation for settlement. The health care plan and non-

participating physician may be granted up to ten (10) business days for this negotiation, which

shall run concurrently with the thirty (30) day period for dispute resolution.

     (b) Surprise bill received by an insured who does not assign benefits or by a patient who

is not an insured.

     (1) An insured who does not assign benefits in accordance with subsection (a) of this

section or a patient who is not an insured and who receives a surprise bill may submit a dispute

regarding the surprise bill for review to an independent dispute resolution entity.

     (2) The independent dispute resolution entity shall determine a reasonable fee for the

services rendered based upon the conditions and factors set forth in §27-81-4.

     (3) A patient or insured who does not assign benefits in accordance with subsection (a) of

this section shall not be required to pay the physician's fee to be eligible to submit the dispute for

review to the independent dispute entity.

     (c) The determination of an independent dispute resolution entity shall be binding on the

patient, physician and health care plan, and shall be admissible in any court proceeding between

the patient or insured, physician or health care plan, or in any administrative proceeding between

this state and the physician.

     27-81-9. Payment for independent dispute resolution entity.-- (a) For disputes

involving an insured, when the independent dispute resolution entity determines the health care

plan's payment is reasonable, payment for the dispute resolution process shall be the

responsibility of the non-participating physician. When the independent dispute resolution entity

determines the non-participating physician's fee is reasonable, payment for the dispute resolution

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process shall be the responsibility of the health care plan. When a good faith negotiation directed

by the independent dispute resolution entity pursuant to §27-81-5(a)(4), or §27-81-7(a)(6) results

in a settlement between the health care plan and non-participating physician, the health care plan

and the non-participating physician shall evenly divide and share the prorated cost for dispute

resolution.

     (b) For disputes involving a patient that is not an insured, when the independent dispute

resolution entity determines the physician's fee is reasonable, payment for the dispute resolution

process shall be the responsibility of the patient unless payment for the dispute resolution process

would pose a hardship to the patient. The commissioner shall promulgate rules and regulations to

determine payment for the dispute resolution process in cases of hardship. When the independent

dispute resolution entity determines the physician's fee is unreasonable, payment for the dispute

resolution process shall be the responsibility of the physician.

     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

     RELATED TO INSURANCE - SURPRISE BILLS FOR MEDICAL SERVICES

***

     This act would provide for a dispute resolution process for emergency services and

surprise bills for medical services performed by nonparticipating (out-of-network) health care

providers.

     This act would take effect upon passage.

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