New regulations intended to reduce out-of-network balance billing, or so-called “surprise billing,” by Indiana physicians are set to take effect July 1, 2020. H.B. 1004 ensures that patients who go to an in-network hospital will not receive surprise bills from out-of-network physicians. As well, the new law requires hospitals and physicians to provide good faith estimates to patients when requested.
In-Network Rates at In-Network Hospitals … Most of the Time
The new law, which was signed on March 18, 2020, by Governor Eric Holcomb, does not apply to emergency services and will mostly affect surgeons, radiologists, pathologists, anesthesiologists, and other healthcare providers who furnish services in hospital settings but operate independently of the hospital.
Essentially, the bill limits out-of-network providers to in-network rates for their services unless the following occurs:
- the covered individual is provided a written good faith estimate of the charges and is informed through a written statement that the practitioner intends to charge more than allowed under the network plan;
- the covered individual signs the statement, consenting to the charge.
If patients do not consent to the out-of-network charge, providers are limited to in-network reimbursement, and every bill sent to the patient must include a notice that the patient is not responsible for more than the in-network rate plus any required copayment, deductible, or coinsurance. As well, if the charges exceed the estimate, providers must offer a written explanation of the difference to the patient.
One possible response to the new legislation would be for providers to work toward aligning their contracted payers with the same in-network plans of the facilities in which they provide services. However, according to the American Society of Anesthesiologists (ASA), many of their physician members are being forced “out of network with little or no notice” by health insurance companies around the country that “are using aggressive negotiating tactics to terminate physician contracts.”
If going or remaining in-network with some payers is not an option, then providers should prepare to send good faith estimates to all out-of-network patients prior to scheduled procedures to attempt to get their permission to charge them out-of-network prices.
Good Faith Estimates
H.B. 1004 also requires providers to provide good faith estimates to any patient who requests it starting July 1, 2020.
Essentially, if a patient is scheduled for a nonemergency procedure, they can request a good faith estimate from the practitioner which must be delivered to them within five days and must be valid for 30 days.
Important to note is that estimate must include both the cost of the professional services offered by physicians, as well as the facility costs, including the use of the facility, services rendered by the staff, any medication, supplies, equipment, and other material items, imaging, laboratory services, diagnostic services, therapy, observation services, and other services expected to be provided to the individual for the episode of care.
The law requires facilities to provide their portion of the estimate to practitioners within two days when requested. As well, since patients might request estimates from facilities rather than practitioners, the law also requires practitioners to provide their portion of estimates back to facilities within two days when requested.
Additionally, the law requires notices to be posted in practitioners’ waiting rooms and on their websites alerting patients to their right to receive good faith estimates.
To learn more about the new restrictions for out-of-network balance billing and the new requirements for good faith estimates, review the following resources:
- Full text of H.B. 1004
- “Surprise Billing Legislation Passes, Some Say It Won’t Reduce Health Care Costs” from WFYI
- “Our Opinion: Indiana Medical Billing Measure Aims for No Surprises” from the South Bend Tribune
- “ANOTHER VIEWPOINT: Bill Is a Victory for Health-Care Consumers” from the Greenfield Daily Reporter
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