June 08—A plan to protect patients from unexpected and often unpreventable out-of-network medical bills passed the Rhode Island Senate on Thursday.
The product of intense debate between lawmakers, health-care providers and insurance companies over several years, the bill introduced by Sen. Stephen Archambault, D-Smithfield, would create a new arbitration system for settling out-of-network bills that holds the patient involved harmless.
In cases where an insurer and provider can't agree on reimbursement for an out-of-network bill, the legislation would have the patient pay the in-network amount for a service while the insurer and provider settle a dispute over additional out-of-network charges with a third-party arbitrator ruling on a payment if an agreement cannot be reached.
"A patient could be lying on a gurney totally unaware that all the people in lab coats who show up at the bedside may be charging them for services," Archambault said in a news release about out-of-network billing. "So most patients don't realize this practice is a reality—until they get the bill. And the charges can be twice as much, even up to 10 times as much, as they expected."
The bill passed the Senate on a unanimous vote, but a corresponding House version sponsored by Rep. Robert Craven, D-North Kingstown, has yet to make it out of committee.
Archambault's bill was rewritten several times this year, but in the most recent testimony taken in the Senate Health and Human Services Committee, health-insurance companies, the Rhode Island Business Coalition and the Consumers Union opposed to the bill.
Their core critique: while the legislation may protect patients from surprise bills, the arbitration system could actually give doctors, anesthesiologists, radiologists, laboratories and other providers an incentive to stay out of an insurance network and hold out for higher costs.
"The parallel structure for reimbursement creates incentives for providers to remain out of network and demand higher rates," Elizabeth McClaine, manager of commercial products for Neighborhood Health Plan of Rhode Island, wrote in an April 10 letter.
Terrance Martesian, lobbying for America's Health Insurance Plans, called the arbitration process in the bill "convoluted" and would ask insurers to either pay higher charges or enter an "overly burdensome, time consuming and costly dispute process."
Although horror stories about unexpected bills have come form nearly every corner of the country, it's unclear how widespread surprise out-of-network billing is in Rhode Island.
State Health Insurance Commissioner Marie Ganim wrote that her office is "aware of cases of Rhode Islanders receiving bills from out-of-state [out-of-network] providers," but said out-of-state providers might not be subject to the proposed system anyway.
Consumers Union Program Director Chuck Bell wrote the Journal in an email Thursday that Rhode Island has done a better job of reducing out-of-network billing than most states—with 95 percent of Ocean State claims in-network—but the Senate bill could erode that progress.
"Rather than protecting patients, it seems intended to empower out-of-network providers to bill at much higher rates," Bell wrote. "Our concerns have not been addressed, and the bill seems to be getting worse with each new version."
Archambault on Thursday said providers would not be encouraged to stay out of network because they would risk the arbitrator forcing them to take a much lower payment than they expected.
In addition to the out-of-network billing mediation system, Archambault's bill would allow patients to get written cost estimates of procedures before undergoing them and prohibit insurers from requiring prior authorization before providing emergency services to insured patients.
Arbitration of disputed bills would be handled by the American Arbitration Association.