How the Surprise Medical Bill Law is Changing the Out-Of-Network Landscape On March 31, 2015
Last year, as part of its budget agreement, New York State set forth its plan to revamp the out-of-network reimbursement system. A previous newsletter highlighted many of these changes which are scheduled to take effect March 31, 2015. On December 31, 2014, the Department of Financial Services (“DFS”) issued the proposed new 23 N.Y.C.R.R. Part 200. The proposed regulations provide further insight on the independent dispute resolution entities (“IDRE”) as well as what providers can expect in the future.
The primary purpose of the Surprise Medical Bill Law (the “Law”) is to protect consumers against “surprise” medical costs incurred after being treated by out-of-network providers. “Surprise bills” include bills received by patients who received care from an out-of-network provider because: (i) a participating provider was unavailable; (ii) the services were rendered by a non-participating provider without the patient’s consent or knowledge; (iii) unforeseen medical services had to be rendered; (iv) the patient was referred to a non-participating provider without the patient’s explicit written consent; or (v) an uninsured patient did not receive timely required disclosures. Surprise bills do not include those received by patients who elected out-of-network care when a participating physician was available.
Once the Law takes effect, insured consumers will no longer be responsible for paying more for emergency or surprise out-of-network care than they would for in-network care. Non-participating providers will not be allowed to balance bill patients treated in an emergency room or those who did not expressly consent to receive out-of-network care. Providers will need to make certain disclosures to their patients with respect to their out-of-network status and what they typically charge for services. Both participating and non-participating practitioners will need to advise their patients of any other healthcare professional who will be involved in their care so that patients may ascertain their network status. Insurers will also have new disclosure requirements.
If a patient does receive emergency or “surprise” medical services, the patient will be held harmless (excluding co-pays and deductibles) and the insurer and provider will handle any disputes over reimbursement. In the event of a dispute, the insurer must still pay the provider an amount it deems to be reasonable. If the provider finds the payment to be unreasonably low and no resolution can be reached, either the provider or insurer may submit the dispute to the IDRE (uninsured patients may also submit disputes). All determinations must be made in consultation with a licensed physician in the same or similar specialty as the provider at issue.
The parties must submit documentation in support of their position within five business days of receiving an arbitration notice from the IDRE. The IRDE will consider the following factors when determining whose amount is more “reasonable:”
- The fees previously charged by and paid to the physician for the same service
- The fees previously paid by the health insurer for the same service
- The physician’s training, education and experience
- The circumstances and complexity of the case at hand
- The usual and customary cost for the service
In this “baseball style” arbitration, the IDRE will decide whose number is more reasonable, and that number will be award. The regul