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April 14, 2016 01:00 AM

Florida governor signs law shielding patients from surprise medical bills

Harris Meyer
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    Gov. Rick Scott

    The movement to protect consumers from surprise medical bills won a major victory Thursday when Florida Republican Gov. Rick Scott signed a bipartisan bill that will exempt patients from having to pay balance bills from out-of-network providers in certain situations.

    The new law will apply to patients who go to a healthcare facility in their health plan network and inadvertently receive services from a non-network provider. Patients would only be responsible for paying their usual in-network cost-sharing.

    Plans and non-participating providers would have to work out payment for those services through a state-arranged, voluntary dispute resolution process, with a penalty assessed to the party that refused to accept an offer that was close to the final arbitration order. The negotiation would be based on the usual and customary rate for the particular geographic area. Disputes could be taken to court. The bill would only apply to PPO-type plans, since Florida already bars balance-billing patients in HMOs.

    Consumer groups were delighted.

    “We commend Gov. Scott for signing HB 221 to protect Floridians from unfair medical bills,” said Laura Brennaman, policy director for the Florida Community Health Action Information Network. “With the law signed today, consumers who are forced through no fault of their own to receive care from an out-of-network physician will be protected from surprise balance bills.” She said the bill “simply takes consumers out of the dispute resolution.”

    On Thursday, Scott also signed accompanying legislation to increase price transparency in Florida hospitals. “This legislation is an important first step as we continue to address the high costs hospitals pass on to patients and their families,” Scott said in a written statement. The Republican governor launched his transparency initiative after doing battle last year with Florida hospitals over Medicaid expansion, which hospitals favored and he opposed.

    Numerous consumers told Florida officials about situations where they had to pay hundreds or thousands of dollars in balance bills when they had not known they were being treated by out-of-network providers. Florida Insurance Consumer Advocate Sha'Ron James cited examples including a Boca Raton woman who had to pay more than $80,000 to an out-of-network surgeon at an in-network hospital.

    New York state implemented a similar, though mandatory, dispute resolution system last spring, requiring insurers and providers to resolve out-of-network payment disputes while holding patients harmless.

    The Florida legislation had the backing of the Florida Medical Association and the Florida Association of Health Plans, while the Florida Hospital Association said it agreed with the “general direction” of the bill. Anesthesiology and radiology groups opposed it.

    The health plan association said surprise out-of-network bills are the No. 1 consumer healthcare complaint. “This is the most comprehensive consumer protection legislation in the country on (this issue), and our association is proud to support it,” Audrey Brown, the association's CEO, said last week. “The stakeholders came together and agreed to remove patients from the middle of disputes between insurers and providers.”

    Meanwhile, in California, a broad coalition of payers, unions, consumer advocates and some providers are backing a similar bipartisan bill that nearly passed the Legislature late last year and now is being considered in amended form.

    The bill would establish a binding independent dispute resolution process for insurers and providers in cases where patients received care from out-of-network providers at in-network facilities. Patients would only have to pay their normal in-network cost-sharing, and those payments, unlike now, would apply to their plan's out-of-pocket yearly limits. The proposed system would apply only to non-emergency care, since emergency physicians already are barred from balance-billing patients under a prior state Supreme Court ruling.

    But the California Medical Association strongly opposes the bill, arguing that it would hinder consumers' ability to use their plans' out-of-network benefits and give plans too much negotiating leverage over physicians.

    Legislative and regulatory efforts to address surprise out-of-network medical bills have gained momentum around the country over the past two years. Legislators and insurance officials in Georgia, Hawaii, Missouri, New Jersey and Pennsylvania are studying the issue or considering legislation. “It's not a red or blue issue. It's really bipartisan,” said Betsy Imholz, special projects director at Consumers Union. “Every legislator and staffer understands it and often has been a victim of it.”

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