New York proposes surprise billing crackdown

The New York State Department of Financial Services wants health insurers to pay any extra bills when their out-of-date provider directories send patients to out-of-network doctors and hospitals.

The state has proposed regulations that would require health plans in the state to make up the difference when a patient sees an out-of-network provider because of the use of:

• a stale online directory
• stale information from a customer service call center
• a paper directory that included provider network status information that was wrong on the day the paper directory was published

For health insurance professionals in New York, the proposed regulation could create opportunities to help some clients who are facing unexpected medical bills.

Surprise billing basics

In the past, insurers typically referred to “surprise billing” as “balance billing,” or an effort by a health care provider to ask the patient to pay the balance of charges not covered by insurance.

Health insurers have argued that they need to be able to make out-of-network charges and other cost-sharing arrangements stick to encourage enrollees to shop for care carefully and to defend themselves and enrollees against providers’ pricing power.

Doctors and hospitals have argued that they provide critical services and that, when they are caring for out-of-network patients, they should not have to accept what they see as the unrealistically low prices plans often pay for in-network care.

Patients and their advocates, including health insurance agents and agent groups, have argued that patients often face unexpected balance billing even when they have done their best to seek in-network care. The California Association of Health Underwriters has been talking about the issue since at least 2004.

The federal No Surprises Act

The federal government is now implementing the No Surprises Act, a new federal law that requires plans and providers to handle any extra charges that occur when a patient covered by a plan sees a provider outside the plan’s network because of a medical emergency or because of unintentional use of an out-of-network provider in an in-network hospital.

Adrienne Harris, the acting superintendent of the New York department, said, in the introduction to the proposed regulation and in a comment included in an announcement about the proposal, that she sees the regulation as being consistent with the No Surprises Act.

“Consumers should not be surprised by large out-of-network costs when they receive health care services from providers they believe are in-network based on incorrect information provided by their insurer,” Harris said.