Florida 2016 Legislative Update House Bill 221 & House Bill 1175

Transcription

1 Florida 2016 Legislative Update House Bill 221 & House Bill 1175 Tracy Lutz, Esquire, Managing Partner Specialized Healthcare Partners September 16, 2016

2 House Bill ( HB ) 221- Extends balance billing prohibitions to PPO and EPO Plans. Currently, providers cannot balance bill patients when the insurer is an HMO, Medicaid, Medicare, Workers Comp, or if statute prohibited (e.g. PIP or Med Pay statute). Approved by Governor on April 14, 2016 The effective date of the law is July 1, 2016 House Bill 221

3 House Bill addresses two types of balance billing situations: Surprise Billing, and Out-of-Network Emergency Care: Surprise Billing - The insured seeks care from an innetwork facility, but physicians at the facility may be outof-network with the enrollee s health plan. Out-of-Network Emergency Care - When a member receives emergency care from an out-of-network facility as a result of emergency transport to that facility. In both cases, the member has neither the ability nor the opportunity to elect an in-network provider. House Bill 221

4 House Bill 221 will create a new Section of the Florida Statutes which prohibits: Non-participating providers from balance billing patients for emergency services; 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. House Bill 221

5 Penalties: A Hospital must comply with Section as a condition of licensure. AHCA has discretion to impose sanctions such as administrative fine not to exceed $1,000 per violation, per day or other more severe options for more substantial violations. Penalties are driven by the AHCA Complaint Investigations. AHCA will take into consideration the action taken by the hospital to correct the violation or to remedy the complaint. House Bill 221

6 HB 221 refers to Fla. Stat. Ann (5): Reimbursement for services rendered by a provider who does not have a contract with the insurer shall be the lesser of: The provider's charges; or The usual and customary provider charges for similar services in the community where the services were provided; or The charge mutually agreed to by the insurer and the provider within 60 days of the submittal of the claim; or House Bill 221

7 What is Usual & Customary? Usual and Customary is not clearly defined but does take into account amounts charged by hospital and amounts paid by insurers in hospital s geographic area. Applicable Law

8 Merkle v. Health Options (2006) ER provider sued Health Options, Aetna, and NHP under Fla. Stat. Ann Court held that providers have a private cause of action for violations of Court held that clearly imposes a duty on HMOs to reimburse non-participating providers according to the statute s dictates, not based on Medicare reimbursement rate. Florida Case Law

9 Baker County Med. Services, Inc. v. Aetna Health Mgt., LLC, (Fla. Dist. Ct. App. Feb. 24, 2010) Court considered relevant factors: Contracted rates with other HMOs; Reimbursement from other commercial payors; Worker s Compensation Payments; Private Pay; Charity Care. Florida Case Law

10 Baker County Med. Services, Inc. v. Aetna Health Mgt., LLC, (Fla. Dist. Ct. App. Feb. 24, 2010) Medicare Allowance is NOT Reasonable In determining the fair market value of the services, it is appropriate to consider the amounts billed and the amounts accepted by providers with one exception. The reimbursement rates for Medicare and Medicaid are set by government agencies and cannot be said to be arm s-length. Florida Case Law

11 Watch Out... Recent Virginia Case, court ruled that the reasonable value of hospital services was 25% of charge master fee (i.e., billed charges). Patient brought to out-of-network hospital emergency department by ambulance and admitted inpatient. The patient s insurance remitted payment in an amount equal to approximately 25% of billed charges. The hospital accepts 25% of billed charges as payment-infull for care to uninsured patients. The judge therefore reasoned 25% of billed charges was reasonable even though patient was not uninsured. Applicable Law

12 What Does the Affordable Care Act Consider to be Usual & Customary? Reimbursement for out-of-network emergency care is the greater of: The median amount negotiated with in network providers for the emergency services; The amount for the emergency service calculated using the same method the plan generally uses to determine payments for out-of-network services (such as the usual, customary, and reasonable amount), excluding any innetwork copayment or coinsurance imposed; The amount that would be paid under Medicare Part A or B, less any network copay / coinsurance. Affordable Care Act

13 What Do Insurers Consider to be Usual & Customary? 22% - 28% of Billed Charges 110% - 200% of Medicare Allowable Fair Health Data Base Health Comparison Tools AHCA s Florida Center for Health Information and Transparency Website

14 HB 1175 Transparency in Health Care AHCA is required to contract with a vendor to provide a website that allows consumers to research the cost of healthcare services and procedures. Hospitals and ASCs are required to: Provide access to searchable service bundles on their website. Provide estimated payments received and estimated payment ranges for each bundle. Disclose financial assistance policies & collection procedures. Provide itemized statement within 7 days after the patient s discharge/release or after the patient s request. Such statement must include specific information and particular disclosures (i.e., patients should contact his/her insurer regarding their share of costs. ) Related Statute

15 Itemized Statements Legislature s Feedback Interpretation and execution of the bill lies with AHCA. AHCA will define the components that are required in the itemized statement / bill. The process of creating a relative bill (i.e., something that is between a very high-level bill and a very detailed, multi-hundred page document) will require a significant conversation between hospitals and AHCA. The statute is silent as to the method and format of the itemized statement / bill. Therefore, the method of provision of the itemized statement / bill is open to interpretation and will be subject to rulemaking on the part of AHCA. AHCA cannot enforce this provision of the statute until AHCA defines the method and format of the itemized statement / bill and publishes such rules. HB 1175 Transparency Provision

16 Itemized Statements AHCA Feedback AHCA was invited to Co-Present at this conference and initially agreed however, backed out two weeks ago and scheduled a Workshop this past Monday. AHCA currently has no language at all related to the statute. Feedback from AHCA is ambiguous: Question: With respect to the requirement for an itemized statement to be issued to patients within 7 days of discharge. It is my understanding that the requirement only applies if the patient actually requests a statement, i.e. if no statement is requested by the patient there is no requirement to provide an itemized statement. Is my understanding correct? AHCA Answer: Yes, preparing a bill for a patient that must meet the 7 day response criteria is upon request. HB 1175 Transparency Provision

17 For hospitals, Section 6 of House Bill 221 requires that the following be posted on their websites: Names and links to websites of all health insurers and HMOs for which the hospital contracts as a network provider or participating provider. A statement disclosing the potential that other health care practitioners may separately bill the patient, and that they may or may not participate with the same health insurers or HMOs as the hospital. The names and contact information of practitioners and medical practice groups with which the hospital contracts (13)(b) describes the recommended form of this statement, and also requires a notification advising prospective patients to contact the practitioner who will provide services at the hospital to determine coverage information. House Bill Transparency Provisions

18 Disclosure Requirement Penalties under HB 221 & HB 1175: Given the legislation is very new, AHCA has not worked out any of the details related to implementation. AHCA indicated there is a one (1) year waiting period before fines will be levied. During the one (1) year waiting period, AHCA will check in on facilities and give feedback when conducting surveys. AHCA review system relies on complaints; when a complaint is received (and only when a complaint is received) AHCA conducts a survey to analyze the validity of the complaint. If the facility committed a violation it may receive a fine based on severity of the violation and whether it is a repeat offense. Fines are not necessarily assessed for a first-time offense. Disclosure Requirement Penalties

19 Potential Impact on the Business Office Decreased revenue derived from patient liability for non-contracted PPO and EPO plans. Decreased revenue from PPO and EPO plans these plans will no longer have to worry about their members being burdened with residual balances. Expected account receivable balances will not be accurate there is no determination as to the correct allowed amount / expected payment amount. House Bill 221

20 Potential Impact on the Business Office Increased Workload for Business Office Staff: Staff will be required to negotiate claim reimbursement on a case to case basis. This process is often time consuming and challenging, given there is no benchmark for allowable amount. Balances listed in the accounts receivables system may need to be manually reconciled as there will be a reduced ability to apply a known reduction via a contract management system. Staff time may be spent consolidating accounts and tracking underpayments for future legal action (i.e., arbitration or litigation). House Bill 221

21 Potential Impact on the Physician s Office Physicians may use this change in law to advocate for increased on-call pay. For Non-Emergency Situations (i.e., patient is in an in-network facility but the physician is out-ofnetwork), physicians will need to document carefully the patient s opportunity to select a participating provider. House Bill 221

22 Recommendations / Next Steps: Run report of current inventory of noncontracted PPO / EPO claims to get an idea of volumes and reimbursement by payer. Implement patient accounting system rule that will prevent non-contracted PPO and EPO members from being billed amounts in excess of co-pay, co-insurance, and deductible. Educate staff and update policies. House Bill 221

23 Recommendations / Next Steps: Start to Compile a Library of EOBs to Establish Proofs of Payment at or close to Billed Charges. Create template letters to appeal health insurers underpayments based on Usual and Customary pricing. Create protocol for account escalation within the business office and to business partners. Develop legal strategy for pursuing noncontracted payers for appropriate compensation. House Bill 221

24 Dispute Resolution Process Through Florida s Existing Statewide Provider & Health Plan Dispute Resolution Program. Program administered through Maximus. Participation in the Program is voluntary; Insurers opt out after provider pays $75.00 filing fee but before case goes to arbitrator. What will providers use as proof of Usual & Customary? If the award amount is within 10% of the amount of a settlement offer, the party that rejected the offer is deemed a non-prevailing party and is responsible for costs. House Bill 221

25 Legal Strategy Track data related to underpaid non-contracted payer accounts: Hospital Claim Data (i.e., Account #, Patient Name, DOB, Subscriber ID, Type of Service, DOS, Total Charge) Group Number Employer Type of Plan Fully Insured or Self Funded Payer Claim # Date of Payment Allowed Amount Payment Amount Patient Responsibility (i.e., co-pay, co-ins., deductible) Payment as a Percent of Charges Method Payer Used to Calculate Payment (i.e., 149% of Medicare Allowable) Date of Appeals (first & second level) Project Specific Codes (i.e., codes which convey the strength of Hospital case...)

26 Litigation Preparation Separate Fully Insured Plans from Self Funded Plans (which are governed by Federal Law/Courts). Exhaust Payer Internal Appeals Process (ensure appeal denial letters are scanned into hospital document imaging system). Review Assignment of Benefits (sufficient proof of Standing).

27 Usual & Customary Litigation To determine U&C, we will need to send letters to local hospitals requesting contract reimbursement information; but... Under Florida law, contracts not discoverable absent a protective order because they are considered Trade Secrets. Both sides will hire U&C experts to opine on amounts considered U&C. Litigation will be expensive and lengthy (2 years if you have an aggressive attorney) Payer s strategy is to prolong the process. Court will look to amounts that Hospital obtains from other commercial and managed care payers, PIP carriers, workers compensation carriers, and charity care to determine U&C. Expectations

28 HB 221 Authorization Form Provision Requires insurers which do not provide an electronic prior authorization process to use the prior authorization form approved by the FL Financial Service Commission. Form cannot exceed two pages and must include all clinical documentation necessary for an insurer to make a decision. Form will also include attestation that all information provided is true and accurate. HB 221

29 Applicability of HB 221 to Out-of-State Plans Balance Billing Prohibition is confined to insured covered under an individual or group health insurance policy (i) delivered or issued in Florida by (ii) an insurer authorized to transact business in Florida. HB 221

30 If you have any questions, please contact: Tracy K. Lutz, Esq. Specialized Healthcare Partners 220 Congress Park Drive, Suite 210 Delray Beach, FL (561)