Analysis by the Legislative Reference Bureau

This bill creates disclosure, notice, billing, and arbitration requirements for the situation in which an enrollee in a defined network or preferred provider plan (“plan”) may receive services from a health care provider that is not in the plan's network.

Under the bill, a plan must annually provide to enrollees a directory of providers and a list of health care facilities that are in its network. The bill also requires that a provider who is not in the network of the enrollee's plan but is providing a service at an in-network health care facility must disclose that information to the enrollee, provide the enrollee a good faith estimate of the cost of services the enrollee may be responsible for, and inform the enrollee of the availability of arbitration to settle disputes over the cost of services. The health care facility may opt to provide the notice for the provider.

Under the bill, if an enrollee of a plan requires medically necessary services that are not available from an in-network provider within a reasonable time, then the plan must provide an opportunity for referral to an out-of-network provider. The plan must reimburse the out-of-network provider at the usual and customary rate or at a rate agreed to between the provider and the plan and may not require the enrollee to pay more than the enrollee would have paid had the provider been in the plan's network. If there a dispute over the reimbursement, the plan or provider may submit the dispute using the arbitration process described below. The bill requires the enrollee to provide the out-of-network provider an assignment of benefits for any service, item, or supply provided by that provider.

Similarly, under the bill, if an enrollee of a plan receives emergency services from an out-of-network provider, then the plan must reimburse the provider at the usual and customary rate or at a rate agreed to between the provider and the plan and may not require the enrollee to pay more than the enrollee would have paid if the provider was in the plan's network. If there a dispute over the reimbursement, the plan or provider may submit the dispute using the arbitration process described below.

The bill requires the commissioner of insurance to promulgate rules to establish the arbitration process under which enrollees, plans, and out-of-network providers may submit billing disputes to an independent dispute resolution entity. Under the bill, an enrollee may request arbitration for a claim if the amount that the enrollee is financially responsible for, after copayments, deductibles, and coinsurance, is more than $500, unless that amount is less than the good faith estimate provided by the provider. The plan or provider may not use the arbitration process to dispute bills for certain emergency services that do not exceed a specified amount or services for which provider fees are subject by law to monetary limitations.

Once a dispute is filed, the independent dispute resolution entity has 30 days to determine a reasonable fee for the services provided to the enrollee by the out-of-network provider. If the dispute is between the plan and provider, each party submits what it thinks is a reasonable fee for the services, and the independent dispute resolution entity must choose one of those amounts. However, if the entity finds that both sides' amounts are unreasonable or that a settlement between the parties is likely, it may direct the plan and provider to attempt a good faith negotiation for settlement and, if they reach an agreement, the entity will select that amount as its final determination. If the dispute is between the enrollee and provider, the independent dispute resolution entity determines a reasonable fee based upon factors that include whether there is a gross disparity between the fee billed by the provider and other fees charged by that provider; the provider's training and experience; and the circumstances and complexity of the particular case. The entity's determination is binding on the parties.

The bill provides that the losing party must pay the costs of the arbitration with two exceptions. First, if a settlement is reached between a plan and provider at the direction of the independent dispute resolution entity, the costs are evenly divided between the parties. Second, if the enrollee is the losing party, the maximum amount the enrollee may be charged is $100 and the commissioner may waive or reduce the charge if requiring full payment would impose a hardship on the enrollee. The bill requires the commissioner to determine and establish a mechanism to cover the arbitration costs that are otherwise unpaid by enrollees.

For further information see the state fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB1016,1 Section 1 . 609.07 of the statutes is created to read:

AB1016,3,2 609.07 Balance billing. (1) Definitions. In this section:

AB1016,3,6 (a) “Assignment of benefits” means a written instrument signed by an insured or the authorized representative of an insured that assigns to a provider the insured's claim for payment, reimbursement, or benefits under a disability insurance policy as defined in s. 632.895 (1) (a).

AB1016,3,11 (b) “Emergency services” means those services required to treat and stabilize an emergency medical condition in accordance with 42 USC 1395dd and services originating in a hospital emergency department, a freestanding emergency department, or a similar facility following treatment or stabilization of an emergency medical condition.

AB1016,3,15 (c) “Network” means the providers that are under contract with a defined network plan or preferred provider plan to provide services to enrollees at an agreed price, for which the provider receives reimbursement in accordance with the contract.

AB1016,3,20 (2) Notice of network status. (a) A defined network plan or preferred provider plan shall provide, no less frequently than annually, a list of health care facilities that have agreed to facilitate the usage of providers that are in the plan's network. The list shall specify the percentage of providers at those health care facilities that are not in the plan's network.

AB1016,4,6 (b) A defined network plan or preferred provider plan shall provide, no less frequently than annually, a directory of all providers that are in the plan's network and are under contract with health care facilities that are in the plan's network. In the directory, the defined network plan or preferred provider plan shall specify health care facilities that do not have contracts with providers in a particular specialty.

AB1016,4,10 (3) Disclosures. (a) A provider that is not in a defined network plan's or preferred provider plan's network and is under contract to provide services at a health care facility that is in the plan's network shall provide, in writing, to an enrollee of the defined network plan or preferred provider plan all of the following:

AB1016,4,12 1. That the enrollee may receive services from a provider that is not in the defined network plan's or preferred provider plan's network.

AB1016,4,14 2. A good faith estimate of the enrollee's financial responsibility for the services provided under subd. 1.

AB1016,4,16 3. That the enrollee is entitled to arbitration under circumstances described in sub. (6) (a).

AB1016,4,18 (b) In lieu of the provider providing the notice under par. (a), a health care facility may provide the notice described under par. (a).

AB1016,4,22 (4) Emergency services. (a) If an enrollee of a preferred provider plan that restricts or increases cost sharing for use of providers that are not in its network obtains emergency services from a provider not in the plan's network, the preferred provider plan shall do all of the following:

AB1016,4,25 1. Allow the enrollee to obtain services from the provider until the enrollee can be transferred to a provider that is in the preferred provider plan's network in accordance with 42 USC 1395dd.

AB1016,5,2 2. Reimburse the provider at the usual and customary rate or at a rate agreed to by the provider and the preferred provider plan.

AB1016,5,5 3. Require the enrollee to pay an amount for the emergency services that is no more than the enrollee would have paid if the provider had been in the preferred provider plan's network.

AB1016,5,8 (b) If an enrollee of a defined network plan obtains emergency services from a provider that is not in the plan's network, the defined network plan shall do all of the following: