KHA Shares Hospital Concerns on Surprise Billing Legislation with Congressman Guthrie

Feb 11

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Tuesday, February 11, 2020 2:19 PM  RssIcon

On Monday, KHA Contacted Congressman Brett Guthrie regarding the Ban Surprise Billing Act. As Guthrie is a member of the House Committee on Education and Labor, which will mark up this legislation, it is important he hears the concerns Kentucky hospitals have with the bill.

Based on a summary of the legislation, the Ban Surprise Billing Act relies on a median in-network rate to resolve out-of-network payments. The legislation would require out-of-network providers to accept the median in-network rate unless the amount paid was above $750 and only then could the payment be disputed through an independent dispute resolution process to determine the final payment.

KHA and member hospitals are opposed to payment at the median in-network rate. While it is understandable that insurers may initially pay this amount to comply with prompt pay laws, out-of-network providers should be given the ability to dispute this payment. KHA supports legislation which would set out a period under which the out-of-network provider and the insurer could negotiate a settlement. If no settlement could be reached within that period of time, then the provider should be given the ability to appeal through an independent dispute resolution process.

Kentucky hospitals oppose setting a dollar threshold for both negotiation and IDR. In meetings with physicians, KHA has determined many individual charges do not reach the level of $750; therefore, the proposed legislation would effectively mandate a rate cut if they are forced to accept the median in-network rate without any opportunity for further negotiation or IDR.

KHA has been working at the state level with the Kentucky Medical Association and the Kentucky Association of Health Plans on state-level surprise billing. The parties have agreed to a negotiation, followed by IDR approach. No dollar threshold would apply for negotiation of a payment initially paid at the median in-network rate to comply with the state prompt pay law. The three organizations have discussed a threshold of $675 for triggering the IDR process; however, the $675 would apply to total charges, not at an individual CPT or item level, and providers would be able to bundle several charges into a single IDR in order to keep appeal costs down.

While the bill summary does not specify if it contains any time frames on timely billing, the House Ways and Means draft would prohibit a provider from “initially” billing a patient more than one year after the date of service. This would create a problem in Kentucky because the state prompt pay law allows insurers to retroactively recoup payment for up to two years after the date of service. Therefore, if an insurer takes back payment (for example based on a patient being found as not eligible) providers must have the opportunity to look to the patient for the costs. Therefore, KHA asked the Congressman to assure that any timely billing limit applies equally to insurers such that it would prohibit an insurer from retroactively recouping payments such that the provider would be unable to comply with the timely billing requirement.

If you have any questions, please contact Nancy Galvagni at KHA (ngalvagni@kyha.com).

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