Consumer out-of-pocket spending on health care costs, including “surprise” medical bills – often incurred for costly, out-of-network care — is on the rise and state lawmakers are responding with legislation to protect consumers.
Surprise bills happen when consumers receive unexpected charges for medical care that they assumed would be comprehensively covered by their insurance plans. This often occurs when consumers unknowingly receive services from providers or facilities that are not covered within their insurance network, such as a specialist who contracts to work in a hospital, but does not participate in that hospital’s network.
Surprise bills can leave consumers on the hook for up to thousands of dollars in unexpected medical costs. This issue is pervasive throughout the health care system and affects consumers regardless of whether they are covered through individual insurance markets, such as an Affordable Care Act marketplace, or their employer. (For background on surprise billing, read NASHP’s report Answering the Thousand-Dollar Debt Question.)
Generally, state laws that address surprise billing fall into four categories:
- Laws that cap or limit charges for services that are delivered out-of-network, especially for emergency care;
- Laws designed to improve cost transparency in service costs and/or provider networks;
- Laws that set up an arbitration process to resolve surprise bills that focus on achieving a resolution between providers and insurers without burdening consumers); and
- State investments in committees to study the impact of surprise billing on state consumers.
Several states took action during the 2018 legislative session to address surprise billing, ranging from New Jersey, whose new law captures most of the above strategies, to California, New Hampshire, and New York, which passed laws to restrict “balance billing” (when providers charge patients for the difference between for what they charge and the insurer’s allowed amount.)
Below is a summary of new state laws designed to protect consumers from surprise bills.
- California AB 2593: California took aggressive action in 2017 to curb surprise billing in the state and its newest law adds to those protections by prohibiting air ambulance providers from charging consumers more than in-network costs, even if the consumer receives services from an out-of-network air ambulance provider. (It is currently awaiting governor’s signature)
- Missouri SB 982: The law requires insurers to pay providers for all emergency services “necessary to screen and stabilize an enrollee” and any additional services authorized by the insurer. Consumers cannot be held liable for cost-sharing for these services, beyond what is allowed under their insurance plans, even if the provider is out-of-network. The law also outlines a specific process for arbitration between insurers and providers to settle costs owed in cases where out-of-network care is provided to consumers.
- New Hampshire HB 1809: This law prohibits specific providers (those performing anesthesiology, radiology, emergency medicine, or pathology services) from balance billing a consumer for services in cases where the provider is out of the consumer’s network but delivers services at a hospital or ambulatory surgical center that is in the consumer’s network. New Hampshire also passed a law to establish a committee to study the balance billing practices of ambulance providers in the state. A report on the committee’s findings is due Nov. 1, 2018.
- New Jersey Chapter 32: This is of the most comprehensive surprise billing laws drafted to date. It requires:
- Health care facilities to provide clear and public information regarding the insurance plans it contracts with, the network status of providers who provide services in that facility, and the costs of services in that facility;
- Providers to share information about the insurance plans they participate in and the health care facilities they are affiliated with;
- Insurers to update and maintain accurate information about their provider networks; and
- Insurers to provide consumers with clear information regarding out-of-network health care benefits.
The law also prohibits out-of-network balance billing in the case of emergency services and sets up a process of arbitration for insurers and providers to resolve billing disputes. Notably, the law includes provisions that attempt to guarantee similar protections for consumers covered by self-insured plans, over which the state has limited authority.
- New York Chapter 57: The state’s Health and Mental Hygiene Budget includes a provision to protect survivors of sexual assault from being balance billed by a hospital, a sexual assault examiner, or a licensed health care provider.
- Oregon Chapter 43: By July 2020, Oregon’s Department of Consumer and Business Services will provide a report to the state legislature on all consumer complaints received by the state related to out-of-network providers working at in-network facilities.
Other states have actively considered bills to outlaw surprise bills and additional legislation is expected during the 2019 legislative sessions. The National Academy for State Health Policy (NASHP) will continue to monitor these bills and other efforts to address surprise billing.
On the federal level, in mid-September a group of nonpartisan US senators unveiled a draft bill that also tackles surprise billing. It adds a cap on out-of-network billing rates, prohibits surprise billing in emergency situations, and requires patients to receive notice before they receive out-of-network medical care.
As states pursue a wide range of legislation to address rising drug costs, four more states have joined Utah and Vermont to introduce bills to import prescription drugs from Canada through a state-run, wholesale operation.
This market-based approach to providing more affordable medicines from Canada, where prescription drugs cost on average 30 percent less than in the United States, is appealing to a politically diverse group of states, and is currently under review by legislators in:
- Colorado (S 80);
- Missouri bill studies the creation of an importation program (SB 722);
- Oklahoma (SB 1381);
- Utah (HB 163);
- Vermont (S 175); and
- West Virginia (HB 4294).
A fiscal analysis recently completed in Utah indicated the potential for millions in reduced spending due to the significant price differences between certain products sold in the United States and Canada. This month, NASHP is convening state legislative sponsors to share information and expertise about the importation policies in their states. Many of the importation bills currently under review are based on National Academy for State Health Policy’s (NASHP) model legislation.
If an importation bill passes in a state legislature and is signed into law by the governor, the next step is to seek certification from the US Health and Human Services Secretary Alex Azar by proving that the state’s importation program meets federal requirements to ensure both product safety and consumer savings.
NASHP’s model legislation was designed to meet federal requirements by taking the form of a state-administered system of wholesale importation and distribution limited to pharmaceuticals from Canada. States can decide whether to purchase lower-cost drugs for public programs only, or to expand the importation initiative to also serve commercial health plans.
The program’s imported drugs would be safe and would produce savings because a state would:
- Select only Canadian suppliers who are licensed and regulated under Canadian law;
- Select only drugs to be imported that are already approved for the Canadian market;
- Provide the drugs only to distributors, pharmacies and other dispensers, and health plans, that volunteer to participate in the program. Participants would agree to purchase and reimburse drugs at the import price and patients would share the cost savings and pay the import price as well. The imported drug costs would be made publicly available to create greater drug pricing transparency for consumers;
- Ensure that the imported products are distributed in-state only; and
- Monitor/audit the system for compliance, safety, and savings.
- As of July 1, 2011, there were 895,998 beneficiaries enrolled in the state’s Medicaid program, known as MO HealthNet; 406,796 of these individuals were enrolled in managed care. Medicaid beneficiaries who receive supplemental security income (SSI), meet the medical definition for SSI, or are eligible for adoption subsidy benefits are not required to enroll in managed care.
- Physical, behavioral, and oral health benefits are provide through 12 Medicaid-only managed care organizations (MCOs).
- 447,317 beneficiaries received transportation services through a prepaid ambulatory health plan (PAHP).
- Children with developmental disabilities may be eligible to receive services from the state’s five Medicaid Home and Community Based Waiver programs, which include the Comprehensive waiver, the Missouri Children with Developmental Disabilities Waiver, the Support Waiver, the Autism Waiver, and the Partnership for Hope Waiver.
Missouri Medicaid defines medically necessary services as those that are:
“reasonable and medically necessary for the prevention, diagnosis, or treatment of a physical or mental illness or injury; to achieve age appropriate growth and development; to minimize the progression of a disability; or to attain, maintain, or regain functional capacity; in accordance with accepted standards of practice in the medical community of the area in which the physical or mental health services are rendered; and service(s) could not have been omitted without adversely affecting the participant’s condition or the quality of medical care rendered; and service(s) is(are) furnished in the most appropriate setting. Services must be sufficient in amount, duration, and scope to reasonably achieve their purpose and may only be limited by medical necessity, and aren’t mainly for the convenience of you or your doctor.”
Missouri’s administration rules on EPSDT echo the federal definition of medical necessity for children, stating that “Medical and dental services which Section 1905(a) of the Social Security Act permits to be covered under MO HealthNet and which are necessary to treat or ameliorate defects, physical, and mental illness or conditions identified by an EPSDT screen are covered regardless of whether or not the services are covered under the Medicaid state plan. “
MO HealthNet collects and publishes HEDIS data on Medicaid managed care plans. Measures collected include:
Behavioral health and substance abuse services provided by MO HealthNet managed care plans include outpatient facility, psychiatry, psychology, and counseling services; for children in the care and custody of the state, these services are reimbursed on a fee-for-services basis. Psychology services for children under the age of 21 are covered by the HCY program.
Support to Providers
MO HealthNet produced a chapter within its provider manual on the Health Children and Youth Program. The chapter includes information on medical necessity, screening components, and general program requirements.
Support to Families
The Missouri Department of Social Services operates a Healthy Children and Youth Program website that includes informationon how to access services, covered services, and a frequently asked questions section. Medicaid beneficiaries can also search for a participating managed care provider using a state developed search tool.
Passed in 2007, Senate Bill 577 requires MO HealthNet to provide all beneficiaries with a health care home in order to improve access to care that is coordinated and person-centered. In 2011, Missouri received CMS approval to implement two Section 2703 Health Homes for enrollees with behavioral health and physical health conditions. For more information on Missouri’s health home initiatives, visit the NASHP health homes page.
Children eligible for the Healthy Children and Youth program receive care coordination services from Special Health Care Needs (SHCN) Public Health Nurse Service Coordinators. Services include health care assessments, home visits, transition planning, family support, and assistance in establishing a medical home.
– See more at: https://www.nashp.org/epsdt/Missouri#sthash.hShy2dzA.dpuf
Many states are developing and implementing strategies for integrating behavioral health with primary care. Integrated care improves patients’ access to behavioral health services, attendance at scheduled appointments, satisfaction with care, and adherence to treatment. Minority populations in particular are more likely to seek mental health treatment from primary care practitioners than from mental health specialists. Medicaid payment policies, including reimbursement for behavioral health screenings, management, and referrals in primary care settings, can facilitate this integration.
The Missouri legislature first promoted medical homes with the passage of SB577 of the 2007 Session Laws, known as the Missouri Health Improvement Act, which including a requirement that MOHealthNet (Medicaid) provide all beneficiaries with a health care home (left undefined in the legislation).
The state is also supporting the Missouri Foundation for Health’s (MFH) Patient-Centered Medical Home Collaborative. MOHealthNet is not a participating payer (the program is currently limited to Anthem Blue Cross Blue Shield and United Healthcare), but practices in the MFH medical home program and MOHealthNet health home program will both participate in the same learning collaboratives. MFH describes the two programs as, “separate, but coordinated.” Additional information on the Missouri Medical Home Collaborative can be found in the RFA.
Medical homes for MOHealthNet enrollees with behavioral health conditions and chronic conditions are currently implemented chiefly through ACA Section 2703 Health Homes.
- On October 20, 2011, Missouri became the first state to receive CMS approval for a state plan amendment (SPA) to implement Affordable Care Act Section 2703 Health Homes for enrollees with chronic conditions. Missouri’s first approved SPA targets behavioral health patients served by community mental health centers. On December 22, 2011, CMS approved a second health home SPA focusing on patients with physical health conditions served by Federally Qualified Health Centers, Rural Health Centers and hospital-based primary care clinics. Both SPAs became effective on January 1, 2012. To learn more about Section 2703 Health Homes, visit the CMS Health Homes webpage.
Last updated: April 2014
|Forming Partnerships||SB577 of the 2007 Session Laws created an 18 member MOHealthNet Advisory Committee to oversee the MOHealthNet program. The Advisory Committee includes government, provider (including physicians, non-physicians and dentists), hospital, and consumer representation.The Missouri Department of Mental Health acknowledges the following partners in developing Affordable Care Act Section 2703 Health Homes:|
|Defining & Recognizing a Medical Home||Definition: Under Missouri’s state plan amendment to provide health homes for MOHealthNet enrollees served by community mental health centers (CMHCs), health homes must provide accessible, coordinated, person-centered, culturally-competent, and linguistically-capable care that is quality driven and cost effective.
Recognition: NCQA PPC-PCMH, with additional expectations.Missouri Health homes participating under Missouri’s state plan amendment for patients with chronic physical health conditions are required to achieve NCQA Level 1 recognition as well as three otherwise-optional standards. See the provider standards section of the state plan amendment (pages 5-7) for additional requirements.
|Aligning Reimbursement & Purchasing||ACA Section 2703 Health Homes – Community Mental Health Centers: Health home teams in community mental health centers receive a combined $78.74 per-member per-month payment to fund the services of a nurse care manager, a primary care physician consultant, a health home director, and health home administrative support.ACA Section 2703 Health Homes – Primary Care Health Homes:Primary care health homes receive clinical care management payments totaling $58.87 per-member per-month to fund the services of nurse care managers, behavioral health consultants, and care coordination and administration support staff.
MOHealthNet will review the payment methodology for both groups of health home providers after 18 months and explore whether tiered payments are appropriate. Payments will be adjusted annually according to the consumer price index. Payments for health home enrollees participating in a managed care plan will be made directly from Medicaid to the health home provider.
|Supporting Practices||All MOHealthNet providers have access to a web-based HIPAA-compliant electronic medical record program for their Medicaid patients, known as CyberAccess.ACA Section 2703 Health Homes – Community Mental Health Centers and Primary Care Health Homes: Missouri state agencies and health care foundations will join providers in spending over $1.5 million to cover training and technical assistance during practice transformation.
Participating community mental health centers and primary care health homes will participate in a number of statewide learning activities, including learning collaboratives, monthly practice team calls to reinforce learning sessions, practice coaching, and monthly practice reporting (data and narrative) and feedback.
Learning activities will focus on teaching practices to coordinate patient- and family-centered, quality-driven, cost-effective, culturally and linguistically appropriate care (including the use of health technology).
|Measuring Results||ACA Section 2703 Health Homes – Community Mental Health Centers: MOHealthNet will use claims, a disease registry, a web-based electronic medical record, monthly health home reports, and annual status reports to measure success in eight specific goals specified in their first health home state plan amendment:
Missouri will assess quality improvement and clinical outcome measures at both the practice and aggregate levels.
Missouri will assess quality improvement and clinical outcome measures at both the practice and aggregate levels.
Under construction–NASHP is continuing to populate this resource so please check back!
If you have any resources about the Medicaid benefit for children and adolescents in your state that you would like to share, please email firstname.lastname@example.org.
NASHP’s Accountable Care Activity map is a work in progress; state activity pages will be launched in waves throughout Fall 2012.
At this time, we have no information on accountable care activity that meets the following criteria: (1) Medicaid or CHIP agency participation (not necessarily leadership); (2) explicitly intended to advance accountable or integrated care models; and (3) evidence of commitment, such as workgroups, legislation, executive orders, or dedicated staff.
If you have information about accountable care activity in your state, please email email@example.com.
Last updated: October 2012
The health home state option provides an enticing opportunity for states to better coordinate care for Medicaid enrollees with serious mental illness or chronic health issues. This NASHP report identifies strategies from the first four states with approved state plan amendments (MO, NY, OR, and RI) to address five key considerations that states will likely face during the development and implementation of the health home option. The five issues discussed in this paper are: coordination with existing programs, financing/payment, integrating behavioral and physical health care, sharing health data, and evaluation considerations. The Commonwealth Fund provided support for the development of this report.