Assigned to FIN AS
PASSED BY HOUSE
Assigned to FIN AS
PASSED BY HOUSE
ARIZONA STATE SENATE
Fifty-Third Legislature, Second Regular Session
AMENDED
insurers; health providers; claim arbitration
Purpose
Effective January 1, 2019, makes various clarifying changes to the Arizona out-of-network claim dispute resolution statutes.
Background
Laws 2017, Chapter 190, beginning January 1, 2019, creates a process by which an enrollee of a health insurance plan who receives a surprise out-of-network bill (bill) may seek dispute resolution. The dispute resolution process consists of an informal settlement teleconference (teleconference) between the enrollee, the health care insurer (insurer) and the health care provider (provider), followed by an independent arbitration if no settlement to the disputed bill is reached. An enrollee may seek dispute resolution if: 1) the enrollee has received the bill; 2) the enrollee has resolved any existing health care appeal against the insurer following the insurer's initial adjudication of the claim; and 3) the amount for which the enrollee is responsible, after deduction of their cost sharing requirements and the insurer's allowable reimbursement, is at least $1,000.
The Arizona Department of Insurance (DOI) must develop a simple, fair, efficient and cost‑effective arbitration procedure for resolving bill disputes. DOI may contract with one or more entities in order to provide qualified arbitrators for this purpose. To qualify as an arbitrator, a person must possess at least three years of experience in health care services claims and comply with any other qualifications established by DOI. In an effort to settle the bill prior to arbitration, DOI must arrange the teleconference within 30 days of receiving the enrollee's request for arbitration and notify the insurer and provider regarding the request. The participating parties must notify DOI of the teleconference results. Upon receiving notice that the bill dispute has not been settled or that a party has failed to participate in the teleconference, DOI must appoint an arbitrator and notify the parties of the arbitration and the appointed arbitrator. The following must occur prior to arbitration: 1) the enrollee has paid or has made arrangements in writing to pay the provider the total amount of the enrollee's cost sharing due for the billed services; 2) the enrollee has paid any amount received from the enrollee's insurer as payment for the out-of-network services that were rendered by the provider; and 3) if the insurer pays for out-of-network services directly to a provider, then the insurer has remitted its payment for such services to the provider.
The arbitration must be conducted within 120 days after DOI's notice of arbitration. The arbitrator must issue a final decision within 10 days following the arbitration hearing and provide a copy of the decision to the participating parties. The insurer is required to remit its portion of the payment resulting from either the teleconference or the amount awarded by the arbitrator within 30 days of dispute resolution. Enrollee payment responsibility is limited to only the amount of their cost sharing requirements and any amount received by the enrollee from their insurer as payment for out-of-network services rendered by the provider. A provider is prohibited from issuing any additional balance bill to the enrollee for services that were subject to the teleconference or arbitration (A.R.S. Title 20, Chapter 20, Article 2).
There is no anticipated fiscal impact to the state General Fund associated with this legislation. However, there may be a cost to the state General Fund associated with the implementation and operation of the bill dispute resolution process by DOI as a result of Laws 2017, Chapter 190.
Provisions
1. Specifies the filing period for an enrollee bill dispute resolution request with DOI as being no later than one year after the date of service that is noted in the bill.
2. Adds the absence of a civil lawsuit or other legal action against an insurer or provider as a requirement that must be met before a bill dispute resolution request is made.
3. Provides that the one-year time period for requesting arbitration is tolled from the date that the enrollee files a health care appeal until the date of final resolution of the appeal.
4. Specifies that a teleconference is terminated if the enrollee or their authorized representative fails to attend. The enrollee may request that DOI reschedule the teleconference within 14 days of the first scheduled teleconference. If the enrollee does not request that the teleconference be rescheduled, then the enrollee forfeits the right to arbitrate the bill.
5. Requires DOI to do the following within 15 days of receiving an arbitration request:
a) determine that the bill qualifies for arbitration and notify the enrollee, insurer and provider that the request qualifies;
b) determine that the bill does not qualify for arbitration and notify the enrollee of the fact, stating the reason as to why the determination was made; or
c) if unable to determine whether the bill qualifies for arbitration, request in writing any additional information from the enrollee, insurer, provider or their billing company that is needed to make the determination.
6. Requires the following if a written request for additional information by DOI is made:
a) that the enrollee, insurer, provider or their billing company respond to the request within 15 days of the request date;
b) that DOI determine whether the bill qualifies for arbitration and provide the applicable notices within 7 days of receiving the requested additional information; and
c) that DOI shall deem the arbitration request as eligible for arbitration if the insurer, provider or its billing company fails to respond to the request for additional information within 15 days of the request date. If the enrollee fails to respond within 15 days of the request date, then the arbitration request is denied.
7. Specifies that determination by DOI of whether a bill qualifies for arbitration is a final and binding decision that may not be appealed to DOI.
8. Specifies that a DOI determination of whether a bill qualifies for arbitration is solely an administrative remedy that does not bar any private right or cause of action for or on behalf of any enrollee, provider or other person.
9. Requires the insurer to notify DOI whether the teleconference resulted in settlement of the disputed bill and, if settlement was reached, notify DOI of the terms of the settlement within seven days.
10. Reduces, from five to three, the number of arbitrators that DOI or a contracted entity must randomly assign if the insurer and provider are unable to agree on a mutually acceptable arbitrator choice.
11. Requires the insurer and provider to each strike one of the three arbitrators with the last arbitrator remaining conducting the arbitration. If two of the three arbitrators remain, DOI or the contracted entity would be required to randomly assign the arbitrator.
12. Requires the arbitration of a bill to be conducted telephonically.
13. Restricts the use of pricing information provided in the course of the arbitration to only the resolution of a bill.
14. Specifies that all information received by DOI or a contracted entity in connection with an arbitration is confidential and may not be disclosed to any person other than the arbitrator.
15. Requires the insurer and the provider to make payment arrangements with the arbitrator for their respective shares of the arbitration cost.
16. Exempts self-funded or self-insured employee benefit plans, the regulation of which is preempted by the federal Employee Retirement Income Security Act of 1974, from being subject to Arizona out-of-network claim dispute resolution statutes.
17. Allows an enrollee who is aggrieved by an arbitration decision regarding a disputed bill to file a civil action in superior court no later than one year after the date of the disputed decision to obtain appropriate relief with respect to the same bill.
18. Exempts DOI from rulemaking requirements for one year after the effective date of this bill.
19. Requires DOI to hold at least one public hearing to provide members of the public with an opportunity to comment on the proposed rules.
20. Defines emergency services and health care services.
21. Makes technical and conforming changes.
22. Becomes effective on January 1, 2019.
Amendments Adopted by Committee
1. Adopted the strike-everything amendment.
2. Clarifies applicability of DOI procedures following receipt of an arbitration request to the enrollee.
3. Provides that failure by the enrollee to respond to a DOI request for additional information in a timely manner would result in denial of the arbitration request.
Amendments Adopted by Committee of the Whole
1. Adds an exempt rulemaking provision for DOI.
2. Makes a technical change.
Amendments Adopted by the House of Representatives
1. Allows an enrollee who fails to attend a teleconference the option of rescheduling the teleconference through a request to DOI.
2. Clarifies timelines for enrollee, insurer, provider and billing company responses to DOI requests for additional information.
3. Specifies that a DOI determination regarding a bill qualifying for arbitration does not bar a private right or cause of action.
4. Allows filing of civil action in superior court for enrollees aggrieved by disputed bill arbitration decisions.
5. Makes technical and conforming changes.
Senate Action House Action
FIN 2/14/18 DPA/SE 7-0-0 BI 3/12/18 DP 5-3-0-0
3rd Read 2/22/18 30-0-0 3rd Read 4/18/18 53-6-1
Prepared by Senate Research
April 18, 2018
FB/lb