On October 22, 2020, the Michigan Legislature enacted Enrolled House Bills 4459 and 4460. These rules were enacted to create limitations on out-of-network provider payments, require certain disclosures to patients related to costs of services, and to generally protect patients from balance medical billing. Balance billing occurs when a healthcare provider bills a patient for services for the amount the patient’s insurance company does not pay. The typical example of balance or surprise medical billing occurs when a patient goes to the emergency room at a hospital in the patient’s insurance network. The patient may receive care from multiple physicians and not know which is participating with the patient’s insurance, because hospitals often employ out-of-network physicians, or those that have no relationship with a patient’s health insurance. After the patient’s insurance pays its allowed amount for in-network and out-of-network services, the patient is then billed for the remaining out-of-network balance.
House Bill 4459 limits how much an out-of-network provider can collect in certain situations by implementing fee restrictions. The amount an out-of-network provider can collect from the patient is limited in certain circumstances, including:
- Where the service is provided to an emergency patient, is covered by the emergency patient’s health benefit plan, and is provided by a nonparticipating provider at either a participating health facility or nonparticipating health facility.
- Where the service is provided to a nonemergency patient by a nonparticipating provider at a participating health facility and the service covered by the nonemergency patient’s health benefit plan.
- Where a nonemergency patient does not have the ability or opportunity to choose a participating provider or the nonemergency patient has not been provided the disclosures required by HB 4460.
- Where the service is provided by a nonparticipating provider at a hospital that is a participating health facility to an emergency patient who was admitted to the hospital within 72 hours after receiving a health care service in the hospital’s emergency room.
In these circumstances, the provider is limited to collecting the greater of:
- The median amount negotiated by the patient’s carrier for the region and provider specialty, excluding any in-network coinsurance, copayments, or deductibles; or
- 150% of the Medicare fee for service fee schedule for the health care service provided, excluding any in-network coinsurance, copayments, or deductibles.
HB 4460 requires out-of-network providers administering care to non-emergency patients to make certain disclosures to patients, including:
- That the patient’s health insurance may not cover all services the out-of-network provider will offer;
- A good faith estimated cost of services to be provided; and
- That the patient may ask the services to be performed by an in-network provider.
Patients may also have some protections against balance medical bills at the federal level. In December 2020, Congress enacted the No Surprises Act. Under the No Surprises Act, out-of-network healthcare providers administering emergency services are prohibited from balance billing a patient in excess of the applicable in-network cost; all surprise medical bills must be covered by insurers at in-network rates. In addition, out-of-network providers cannot charge patients for an amount that is more than the in-network cost for those services. These federal regulations take effect January 1, 2022.
For over 35 years, Wachler & Associates has represented healthcare providers and suppliers nationwide in a variety of health law matters, and our attorneys can assist providers and suppliers in understanding surprise medical billing laws. If you or your healthcare entity has any questions pertaining to healthcare compliance, please contact an experienced healthcare attorney at 248-544-0888 or wapc@wachler.com.