Insurers, hospital owners, doctors and consumers agree that patients ought to know if anyone involved in their care will bill them for charges beyond what their insurance pays.
But getting an agreement in principle written into Virginia code is proving much simpler than writing the rules to enforce it.
Virginia lawmakers earlier this year passed a bill that requires hospitals to consult insurers and notify patients before elective procedures if anyone involved in their care is out of their network and could bill for the balance above what their insurer pays. The law does not halt the practice but is intended to take the surprise out of balance billing, and it does not apply to emergency care.
The State Corporation Commission was tasked with writing the rules to put the law into effect. It came up with one in June that says hospitals must inform patients of any non-network providers possibly involved in their care, and if they fail to provide the notice, the hospitals, not the patients, would be responsible for the balance.
The SCC then opened it up to public comment and will hold a hearing in Richmond on Thursday.
John Mumford and John Buford wrote on behalf of the Medical Society of Virginia that the statute “was the product of good-faith efforts by a wide variety of participants in the health care market, including facilities, providers, patients, and health plans.”
But the proposed rules, they said, “pick winners and losers, pit facilities and providers against one another, and ultimately regulate everyone except health plans … who get to avoid any meaningful burden under the proposed rules without answering for their role in the very out-of-network problem the statute attempts to address.”
Augusta Health CEO Mary Mannix wrote, “If I didn’t know better, it would appear the proposed rules were written by a lobbying group for the insurance industry.”
But insurers, though mostly supportive of the rules, aren’t pleased with all that the SCC Bureau of Insurance wants.
Lindsay Winter of Anthem Blue Cross and Blue Shield said its contracts with facilities contain language requiring them to use in-network providers, but health plans have limited ability to enforce the provisions.
“The only recourse is contract termination which is not practical,” she said, because in much of Virginia, large, geographically dominant health systems are a must-have for Anthem’s networks.
In other words, if Anthem did cancel contracts, even more providers would be out of network, leading to more balance billing.
Some consumers and their advocates wrote that the rules don’t go far enough in providing meaningful information to patients.
“In a non-emergency situation, some carriers may pay nothing for out-of-network services, leaving the entire charge to the consumer,” wrote Jill Hanken of the Virginia Poverty Law Center. “It obviously would make a huge difference to the consumer if the cost was $100 or $1,500 or $10,000. Without clear information about actual charges and estimated costs, consenting to services from an out-of-network provider cannot be considered knowing or voluntary.”
The Virginia Hospital and Healthcare Association is challenging whether the SCC has the power to regulate health care providers, as that authority lies with the Virginia Department of Health and the Department of Medical Assistance Services.
“Instead of attempting to directly regulate the party that it clearly has authority over — the managed care plans — the Bureau proposed these draconian measures to attempt to indirectly regulate a third party that has the least control over the decision of whether a facility-based provider is in-network or out-of network,” wrote William Hurd on behalf of the hospital association.
A number of hospital systems, including the University of Virginia and Carilion Clinic, filed comments in support of the association’s position.
“The proposed rules incorrectly assume that a facility can know at the outset of the treatment process if a covered person ‘will or is likely to receive elective health care services from an out-of-network provider.’ These determinations cannot always be made by the facility or health care providers, and, in any event, can be made most accurately by the carriers/managed care plans,” wrote Nicholas Conte for Carilion. “They have the most complete information regarding participation requirements and are, therefore, in the best position to inform providers and subscribers regarding network participation.”
Douglas Lischke, chief financial officer of UVa Health, said facilities might have an overall contract with a managed care company but not necessarily for all the products it offers.
“We do not have great visibility into these closed networks today, yet these are often an underlying cause of balance bills for out-of-network services,” he said.
The rules apply to “facilities,” which could include more than hospitals, such as ambulatory surgery centers. Quest Diagnostics, a large lab company, asked the SCC to clarify that the term does not include labs.
The SCC also heard from a number of patients who said that bills, which are often in the tens of thousands of dollars, can come months after the treatments were provided, and can be turned over to collection agencies.
The SCC Bureau of Insurance is expected by Sept. 17 to file a response to the legal issues that have been raised and will accept replies to that until Sept. 27. The rule was set to take effect in October.