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:

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

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by adding thereto the following chapter:

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CHAPTER 81

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SURPRISE BILLS FOR MEDICAL SERVICES

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

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

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

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

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resolution process. The commissioner shall promulgate rules and regulations establishing

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

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

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

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

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practicable, the physician shall be licensed in this state.

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

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

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

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any such law.

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

 

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

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

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process established in this chapter shall not apply when:

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

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

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and

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

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

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

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

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

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physician.

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

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

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

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

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

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

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

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

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

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

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

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

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

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immediate medical attention to result in:

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

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

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

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

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     (iv) Serious disfigurement of such person; or

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

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Act 42 U.S.C. §1395dd;

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     (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,

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

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

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emergency medical condition; and

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

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

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

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

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

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

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

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

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

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

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health care services to an insured.

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

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services to an insured.

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

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services, in this state.

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

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

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

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

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

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

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

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

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

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network.

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

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authorization for rendering emergency services to an insured.

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

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

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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

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health care provider.

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

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

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

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

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an in-network health care provider;

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

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

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reasonable rate" means the eightieth percentile of all charges for the particular health care service

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performed by a health care provider in the same or similar specialty and provided in the same

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geographical area, as reported in a benchmarking database maintained by a nonprofit organization

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specified by the commissioner. Such organization shall not be affiliated with any health carrier.

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

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health care provider from agreeing to a greater reimbursement amount.

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     (d) With respect to a surprise bill:

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

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

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

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

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

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

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

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

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

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

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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 services were rendered by an in-network health care

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provider.

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

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

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relevant factors, including:

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

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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

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

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

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

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participating with the health care plan;

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

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

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care plans in which the physician is not participating;

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

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the service;

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     (5) Individual patient characteristics; and

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

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

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insured:

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

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

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

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

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

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incurred with a participating physician.

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

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

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established by the commissioner.

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

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

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

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

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

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

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

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

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

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

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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

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

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

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

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

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upon approval of the commissioner.

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

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

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

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

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

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

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

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and the physician.

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

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

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

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

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be owed if the insured utilized a participating physician.

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

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who assigns benefits.

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

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

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section.

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

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

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

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

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

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

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

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

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

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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

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

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

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

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

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

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

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

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

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

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

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

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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

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

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

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is not an insured.

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

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

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

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

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

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

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

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review to the independent dispute entity.

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

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

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

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this state and the physician.

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

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

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

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

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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

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

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

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

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resolution.

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

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

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

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

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

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

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resolution process shall be the responsibility of the physician.

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     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

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

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

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providers.

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     This act would take effect upon passage.

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