SB2423 SD1

SECTION 1. The legislature finds that unanticipated medical billing can cause significant financial hardship to patients. Unanticipated medical billing, also known as surprise medical billing, arises when a patient receives unanticipated out-of-network care from a non-participating provider for emergency or other medical services. The medical services may be from a health care provider or a health care facility that is outside of the patient's insurer's network and, as such, the patient's health care plan ends up paying less than the patient expected for the medical services received.

The legislature also finds that in the case of surprise medical billing for emergency services, patients often do not have the ability to select the emergency room, treating physician and other medical specialists, or ambulance provider. Furthermore, when physician groups and insurers are unable to resolve reimbursement disputes, patients are caught in the middle and saddled with high medical bills, sometimes resulting in significant financial hardship due to the higher out‑of‑network charges and medical reimbursements.

The purposes of this Act are to:

(1) Protect patient access to health care by addressing unanticipated medical coverage gaps for patients who receive emergency services from non-participating providers; and

(2) Require the insurance commissioner to refer certain disputes between insurers and non-participating providers to an independent dispute resolution entity for binding arbitration.

SECTION 2. Chapter 432E, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§432E-A Emergency services; billing. (a) When an enrollee in a managed care plan receives emergency services from a non-participating provider, the non-participating provider shall not be entitled to bill the enrollee any amount in excess of any applicable charges the enrollee would be responsible for if they had received the services from a participating provider. This includes, but is not limited to, any copayment, coinsurance, or deductible amount.

(b) When an enrollee receives emergency services from a non-participating provider, a managed care plan shall be responsible to fulfill its obligation to the enrollee and shall enter into negotiation with the non-participating provider to resolve any sums owed by the managed care plan. If the managed care plan and the non-participating provider cannot come to an agreement on a payment amount within forty-five days of a non-participating provider notifying a managed care plan that they disagree with the payment amount, either party may elect to enter into an independent dispute resolution process, as established in section 432E-B.

(c) Nothing in this section shall be construed to require a managed care plan to cover services not required by law or by the terms and conditions of the managed care plan. Nothing in this section shall be construed to prohibit non-participating providers from seeking the uncovered cost of services rendered from enrollees who have consented to receive the health care services provided by the non-participating provider.

(d) For the purposes of this section, "non-participating provider" means a facility, health care provider, or health care professional that is not subject to a written agreement with the enrollee's health carrier governing the provision of emergency services.

§432E-B Dispute resolution. (a) If an insurer and a non-participating provider are unable to reach an agreement as to the amount to be billed for emergency services provided by a non-participating provider within forty-five days of a non-participating provider notifying an insurer that they disagree with the payment amount, the matter may be submitted to the commissioner, who will refer the matter to an independent dispute resolution entity for binding arbitration.

(b) In determining the appropriate amount to pay a nonparticipating provider for an emergency service, an arbitrator shall consider all relevant factors, including:

(1) Whether there is a gross disparity between the fee charged by the health care provider or hospital for services rendered as compared to:

(A) The fees paid to the involved health care provider or hospital for the same services rendered by the health care provider or hospital to other patients in plans in which the health care provider or hospital is not participating; and

(B) In the case of a dispute involving a managed care plan, fees paid by the managed care plan to reimburse similarly qualified health care providers or hospitals for the same services in the same region who are not participating with the managed care plan;

(2) The level of training, education, and experience of the provider, and in the case of a hospital, the teaching staff, scope of services, and case mix;

(3) The provider's usual billed charge for comparable services with regard to patients in plans in which the health care provider or hospital is not participating;

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

(5) Individual patient characteristics.

(1) The identical managed care plan or insurer and provider;

(2) Claims with the same or related current procedural codes; and

(3) Claims that occur within one hundred eighty days of each other.

(d) For disputes involving an enrollee, when the dispute resolution entity determines the managed care plan's payment is reasonable, payment for the dispute resolution process shall be the responsibility of the non-participating provider. When the dispute resolution entity determines the non-participating provider's fee is reasonable, payment for the dispute resolution process shall be the responsibility of the managed care plan. When a good faith negotiation directed by the dispute resolution entity results in a settlement between the managed care plan and non-participating provider, the plan and the non-participating provider shall evenly divide and share the prorated cost for dispute resolution.

(e) The arbitrator shall issue a decision on a submitted case no later than forty-five days from the commencement of binding arbitration.

(f) The commissioner may adopt rules pursuant to chapter 91 necessary to carry out the purposes of this section."

SECTION 3. Section 432E-8, Hawaii Revised Statutes, is amended to read as follows:

"[[]§432E-8[]] Enforcement. All remedies, penalties, and proceedings in articles 2 and 13 of chapter 431 made applicable hereby to managed care plans and non-participating providers under section 432E-A shall be invoked and enforced solely and exclusively by the commissioner."

SECTION 4. In codifying the new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 6. This Act shall take effect on January 1, 2021.

THE SENATE	S.B. NO.	2423
THIRTIETH LEGISLATURE, 2020		S.D. 1
STATE OF HAWAII