With House Bill 221, the last bill to pass during the 2016 legislative session, the Florida legislature took a significant step towards reducing uncertainty for medical costs for persons with Preferred Provider Organization (“PPO”) health insurance by limiting unanticipated, balance billing.  “Balance billing” is the practice of providers charging patients for a bill, or any remainder of a bill, not paid by the health insurance company, together with the applicable copayment or deductible due from the patient. Balance billing is generally not a concern when a patient receives services from a “participating” or “in-network provider, which is a doctor or other health care provider that has entered into a contract with the health insurance company. This is because contracts between health insurance companies and providers delineate the total amount of payment for services and specifically prevent the provider from balance billing the patient.  However, balance billing can be a serious concern when patients receive services from non-participating providers through their PPO health insurance as the patients can be subject to large, unanticipated medical bills.

PPO coverage is fairly typical health insurance coverage and refers to health insurance where the patient has the opportunity to seek services from a participating provider and avoid balance billing, or the patient can be seen by a non-participating provider and be subject to paying the difference between the amount paid by the insurance company and the provider’s charges. Health insurance companies strive to have comprehensive, provider networks for their PPO products so that their members receive appropriate, health-care services for lower costs, and this also makes their health insurance products more marketable.  However, many providers do not contract with health insurance companies for a variety of reasons, including that the provider believes the health insurance reimbursement is too low.  Also, health insurance companies may not contract with specific providers for other reasons including the providers’ costs and the providers’ ranking with quality indicators.

When the patient is aware that a particular provider is not in the PPO network, and alternative, in-network providers are available, balance billing generally does not result in unanticipated medical bills and is not a problem – the patient has the ability to choose an in-network provider and avoid the additional costs, or the patient can make an informed choice to receive services from the out-of-network provider. The balance billing problem primarily arises in situations where the patient does not have a choice – for example when the patient has an emergency and is not able to choose the hospital where he or she is taken, or when the patient receives services at an in-network hospital with an in-network surgeon, but other ancillary, hospital-based providers at the facility, such as pathologists, radiologists and anesthesiologists,  do not have a contract with the insurance company. When hospital services are necessary, for example when a patient has complicated surgery or a high-risk pregnancy, a patient can be charged tens of thousands of dollars in unexpected costs through balance billing by these ancillary, hospital-based providers.  Although balance billing has been legislatively addressed in Florida for Health Maintenance Organization (HMO) members since 2002 (see, e.g., 2000-252, Laws of Florida) and is not an issue with Medicare or Medicaid coverage, and although steps are being taken to reduce its impact through the Federal Affordable Care Act, it has remained a significant problem in Florida for persons with commercial, PPO coverage.

House Bill 221 would create new Section 627.64194 of the Florida Statutes, and explicitly prohibit: (1) non-participating providers from balance billing patients for emergency services; (2) non-participating providers from balance billing patients for services that are provided in a participating facility, and the patient does not have the opportunity to choose a participating provider. The statute also directs that providers of these services are to be reimbursed based upon an amount negotiated with the insurance company or the usual and customary amount for similar services provided in the community.  If there is a dispute as to whether the payment is correct, the provider can sue the insurance company in a court of competent jurisdiction or can seek resolution through the statewide provider and health plan claim dispute resolution program.

Noteworthy, the legislation also amends the section of the code which provides for the health claim dispute resolution program to encourage payment settlements by including penalties for failing to accept offers if the final order amount is greater than 90 percent of the offer, or less than 110 percent of the offer, as applicable. The legislation also includes penalties for health insurance companies and providers that do not comply with the balance billing and payment requirements; it requires posting of information by hospitals as to health insurers and HMOs with which it contracts, and how to contact hospital-based providers to determine whether they also are contracted; it requires that insurance companies post lists of their contracted providers, and relevant information about the providers including their affiliations with participating hospitals; and it requires a specific disclosure in insurance company policies regarding costs that may be applicable when patients choose to utilize a non-participating provider.

Surprise medical costs that occur because of balance billing have been a significant hardship for Florida patients and their families. It is expected that Governor Scott will sign House Bill 221, and that it will take effect on July 1, 2016. When that occurs, Florida will have taken a momentous step in safeguarding Floridians from the balance billing problem. Please contact the author of this blog with any questions about balance billing or other insurance topics.