Balance Billing

Balance bill is defined as "a bill sent to an enrollee by an out-of-network provider or facility for health care services provided to the enrollee after the provider of facility's billed amount is not fully reimbursed by the carrier, exclusive of permitted cost-sharing." In other words, the portion of the out-of-network provider's charge that is not fully reimbursed by the health insurance carrier.

Effective Jan. 1, 2020, a prohibition on balance billing applies to:

• Emergency services provided to an enrollee; or
• Non-emergency health care services provided to an enrollee at an in-network hospital or an in-network ambulatory surgical facility if the services involve surgical or ancillary services and are provided by an out-of-network provider.
• "Surgical or ancillary" services are defined as surgery, anesthesiology, pathology, radiology, laboratory, or hospitalist services.

A health care provider, hospital, or ambulatory surgical facility may not require a patient to sign any document that would attempt to avoid complying with the bill.

Health insurers must reimburse providers and facilities for out-of-network care relevant to the bill at a "commercially reasonable amount," based on payments for the same or similar services provided in a similar geographic area. The payment standard was intentionally open-ended—an alternative to a payment rate set in statute after years of negotiation with the WSMA, WSHA, and other health care stakeholders.

Reimbursement must be made within 30 calendar days of receipt of a claim and paid directly to the out-of-network provider or facility (rather than routing through the patient).

Enrollees of a health plan satisfy their obligation to pay for services relevant to the bill by paying the equivalent of their in-network cost-sharing for the services, determined by using the insurer's median in-network contracted rate for the same or similar service in the same or similar geographic area. Insurers must provide an explanation of benefits (EOB) to the enrollee and the out-of-network provider that specifies the patient's responsibility.

The balance billing prohibition applies to fully insured commercial health plans (i.e. plans subject to regulation under RCW 48.43); public employee plans (RCW 41.05); and self-insured plans that voluntarily elect to comply with the law (more information regarding ERISA plans below).

Self-insured group health plans that are governed by federal law (aka ERISA plans) may elect to comply with the reimbursement and dispute resolution provisions of the balance billing law by notifying the Washington State Office of the Insurance Commissioner.

Out-of-network providers and facilities may continue to balance bill enrollees of ERISA plans that do not opt to comply with the law.

Insurers must make information available through electronic and other methods of communication "generally used by a provider" to allow providers to verify whether an enrollee's health plan is subject to the balance billing prohibition and associated requirements of the law.

The primary method by which insurers must make the information available is through the HIPAA-mandated X12 Health Care Eligibility Benefit Response (271) transaction, using a standard message that is placed in a standard location within the 271 transaction. More details on the electronic notification process can be found on OneHealthPort's webpage.

If an out-of-network provider or facility wishes to dispute an insurer's payment, they must notify the insurer within 30 calendar days after the receipt of payment or payment notification from the insurer. This notification begins a 30-day informal negotiation period between the two parties. The insurer may not require the payment that was made to be rejected or returned by a provider or facility as a condition of putting the payment into dispute.

If informal negotiation does not yield agreement, either party may initiate arbitration to determine a commercially reasonable payment amount. To initiate arbitration, the petitioning entity must provide written notification to the Office of the Insurance Commissioner (OIC) and the non-initiating party within 10 days of the completion of the 30-day informal negotiation period. The notice must include the initiating party's final offer. Within 30 days, the non-initiating party must provide its final offer in response. The parties may reach an agreement on reimbursement during this time.

Multiple claims may be "bundled" for concurrent consideration in arbitration under the following circumstances:

• The claims occur within a two-month timeframe;
• The claims involve the same two parties (i.e. insurer and provider/facility); and
• The claims involve the same or related CPT codes relevant to a particular procedure.

An arbitrator is selected through a defined process, and within 30 days of selection, parties to arbitration must make written submissions to the arbitrator in support of their positions. If one party does not make a timely submission, they are in default and the arbitrator will rule for the participating party and may hold the default party responsible for arbitration costs. Within 30 days of receipt of the written submissions, the arbitrator must issue a written decision, selecting the final offer amount of one of the parties. Expenses incurred in the course of arbitration must be divided equally among the parties to the arbitration (not including attorneys' fees).

In making a determination, arbitrators must consider the following factors:

• The evidence submitted by the parties in support of their positions;
• "Patient characteristics and the circumstances and complexity of the case, including time and place of service and whether the service was delivered at a level I or level II trauma center or a rural facility that are not already reflected in the provider's billing code for the service."
• The data set compiled from the Washington all-payer claims database, including claims for median in-network amounts, median out-of-network allowed amounts, and median billed charges for the same or similar services in a geographic area. Once compiled, the data set is adjusted in subsequent years by applying the consumer price index-medical component from the U.S. Department of Labor, Bureau of Labor Statistics.

Both parties to the arbitration must sign a non-disclosure agreement. The NDA does not preclude the arbitrator from submitting the final decision to the OIC. The OIC compiles arbitration decisions into an annual report, detailing parties to arbitration and the type of health care service at issue.

When determining the adequacy of a provider network, the OIC must consider whether the insurer's proposed network includes a sufficient number of contracted providers of emergency and surgical or ancillary services at the insurer's contracted facilities "to reasonably ensure enrollees have in-network access to covered benefits delivered at that facility."

Health care providers and facilities must include the following information on their website, if they have one, and upon notice to a patient upon request:

• The standard notification of consumer rights developed by the OIC. A link to the notice can be found here.
• A listing of the insurer health plan provider networks with which the provider contracts, based on information that is shared by the contracting insurer. The law requires insurers to "clearly set forth" the provider networks that are included in provider contracts and compensation agreements in a format that would be understandable to a reasonable person.

For any facility or provider that is owned and operated independently from all other businesses and that has more than 50 employees, upon confirming that a patient's health plan is subject to the balance billing law, the notification of consumer rights must be included in any communication to a patient (electronic or otherwise) confirming the scheduling of nonemergency surgical or ancillary services at a facility.

Providers must submit information to insurers about the provider's network status in a timely manner, consistent with the terms of the contract between the two entities.

Insurers must update their provider directories within 30 days of additions or subtractions of facilities or providers.

Upon request, insurers must provide information to enrollees about whether health care providers are in-network or out-of-network and whether there are in-network providers available to provide services at specified in-network facilities. Upon request, insurers must also provide enrollees with an estimated range of the out-of-pocket costs for an out-of-network benefit.

If the OIC has cause to believe that a health care provider or facility has engaged in "a pattern of unresolved violations" of the balance billing law, the OIC may submit information to the relevant disciplining authority at the Department of Health (e.g. the Washington Medical Commission). In advance of submitting information to DOH, the OIC may "provide the health care provider, hospital or ambulatory surgical facility, with an opportunity to cure the alleged violations or explain why the actions in question did not violate" the balance billing law.

The disciplining authority may levy fines or impose cost recovery upon the provider/facility within existing authority. A pattern of violations of the law constitutes unprofessional conduct.

The OIC may levy fines or apply remedies within its regulatory authority upon insurers who fail to comply with the law.

It is stipulated that it is an unfair or deceptive business practice for a health insurer to initiate arbitration "with such frequency as to indicate a general business practice."

Pursuant to the balance billing law, the OIC has contracted with the Washington all-payer claims database (APCD) to compile a data set to provide insurers, providers, facilities, and arbitrators with information pertaining to be a resource for dispute resolution and negotiations.

The data set includes median in-network amounts and median billed charges for services relevant to the law, per CPT code, for services relevant to the law. The data set excludes Medicaid and Medicare claims, as well as claims paid on other than a fee-for-service basis. Claims are displayed on a regional basis (per the OIC geographic rating regions) as well as a statewide basis.

Due to inadequate claims data for anesthesia services (i.e. APCD claims data did not include time components), anesthesia is excluded from the data set.

Going forward, data sets will be adjusted annually by applying the consumer price index-medical component established by the U.S. Department of Labor, Bureau of Labor Statistics.

The data set (and additional information pertaining to it) can be reviewed on the OIC's webpage.