Note: This is a revision to a legal update originally published on June 25, 2020, titled “Governor Kemp Expected to Sign Bill Curbing Surprise Medical Bills.”
House Bill 888, along with regulations announced by the Georgia Insurance Commissioner, went into effect January 1, 2021. The bill and the regulations require insurers to cover emergency services regardless of whether the provider is in a patient’s insurance network. As explained in greater detail below, medical providers and insurance companies will now enter an arbitration process to determine the amount of reimbursement, effectively removing patients from the billing calculus.
These unexpectedly high medical bills, called “surprise” or “balance” billing, can add hundreds or thousands of dollars to a patient’s bill, often without the patient’s prior knowledge. Many of these bills result from specialty procedures like emergency room or trauma surgery and anesthesiology completed by out-of-network specialists.
Previous attempts at curbing these surprise bills have failed due to disagreements over how insurers and medical providers should settle out-of-network costs. However, representatives of the George Hospital Association and the Medical Association of Georgia have supported House Bill 888, in support of the patient.
How Out-of-Network Costs are Determined
The provider may only collect a patient’s deductible, coinsurance, copayment, or other cost-sharing amount, as provided by that patient’s insurance policy. The insurer will then pay the greater of:
- The verifiable contracted amount paid by all eligible insurers for the provision of the same or similar services;
- The most recent verifiable amount agreed to by the insurer and the nonparticipating provider for the provision of the same services during the time the provider was in-network with the insurer; or
- A higher amount that the insurer deems appropriate given the complexity and circumstances.
The amount paid by the insurer is not required to include any deductible, coinsurance, or copayment already paid by the patient.
The contracted amount is the median in-network amount paid during the 2017 calendar year by an insurer for the emergency or non-emergency services provided by in-network providers in the same or nearby geographic area. The contracted amount will be adjusted annually for inflation and will not include Medicare or Medicaid rates.
The Arbitration Process
The arbitration process is available to out-of-network providers who believe they are entitled to additional funds given the complexity and circumstances of the emergency or non-emergency services. These providers have 30 days from receipt of payment to request arbitration. Arbitration requests may involve a single or multiple patients and a single or multiple types of healthcare services. In reaching a decision on a claim, the arbitrator is directed by the regulations to consider (i) whether there is a gross disparity between the fee charged by the provider and (a) the fees paid to the provider for the same services provided to other patients in health care plans in which the provider does not participate and (b) fees paid by the health plan to reimburse similarly qualified out-of-network providers for the same services in the same region; (ii) the provider’s training, education, experience, and usual charge for comparable services; (iii) for hospitals, the teaching status, scope of services, and case mix of the hospital; (iv) the circumstances and complexity of the case; (v) the patient characteristics; and (vi) for physician services, the usual and customary cost of the service.
Hospital Surprise Billing Rating
The regulations announced by the Commissioner of Insurance require insurers to make a health plan surprise bill rating for hospitals available online and in print. These ratings are designed to alert consumers of a hospital’s specialties that are in-network and those that are out-of-network for a health plan.
Please contact MMM’s healthcare group with any questions regarding this update.