Assigned to HHS AS
PASSED BY COW
Assigned to HHS AS
PASSED BY COW
ARIZONA STATE SENATE
Fifty-Third Legislature, Second Regular Session
AMENDED
estimated costs; insurers; health providers
Purpose
Prescribes various allowable methods by which a patient may obtain information on estimated health care costs from a health insurer (insurer). Effective January 1, 2019, requires disclosure of such information to patients by an insurer through an interactive mechanism (mechanism). Beginning with the next insurer rate filing, requires an insurer to establish a shared savings program (SSP) to directly incentivize health care plan (plan) enrollees to shop for lower-cost, high quality health care services (services).
Background
Current law requires a health care facility (facility) with more than 50 inpatient beds to make available on request or online the direct pay price for at least 50 most used, diagnosis-related group codes and at least 50 most used outpatient service codes for the facility. A facility with 50 or fewer inpatient beds must make available on request or online the direct pay price for at least 35 most used, diagnosis-related group codes and at least 35 most used outpatient service codes for the facility. The services may be identified by a common procedural terminology code or by a plain-English description. Each facility must update the direct pay prices at least annually based on the services from a 12-month period that occurred within the 18-month period preceding the annual update. The direct pay price must be for the standard treatment provided for the service and may include the cost of treatment for complications or exceptional treatment (A.R.S. § 36-437).
Current law also requires a health care provider (provider) to make available on request or online the direct pay price for at least 25 most commonly provided services for the provider, subject to the same annual update requirements. Providers who are owners or employees of a legal entity with fewer than three licensed providers are exempt from this requirement (A.R.S. § 32-3216).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
Health Care System Interactive Mechanisms
1. Requires, beginning January 1, 2019, an insurer that offers a plan in the Arizona individual or small group market to do the following:
a) establish a mechanism on its website, enabling an enrollee to request and obtain from that insurer:
i. information on the payments made by the insurer to network health care facilities (facilities) or health care providers (providers) for comparable health care services; and
ii. quality data for those facilities and providers to the extent available.
b) notify an enrollee making the above request that these are estimated costs and that the actual total cost of care and total out-of-pocket costs may greater or less, depending on the exact circumstances of the care and treatment provided, among other factors;
c) beginning with the next insurer rate filing, attest to the Arizona Department of Insurance (DOI) that the insurer is complying; and
d) annually thereafter, attest that the information that it provides is current.
2. Requires the mechanism to allow an enrollee who is seeking information about the cost of a particular service to:
a) compare allowed amounts among the facilities or providers;
b) estimate out-of-pocket costs applicable to the enrollee’s plan; and
c) learn the average payment made to facilities or providers for the procedure or service under the enrollee’s plan within a reasonable time frame not to exceed one year.
3. Requires the out-of-pocket cost estimate to provide a good faith estimate of the amount the enrollee will be responsible for paying for a proposed nonemergency procedure or service that is a medically necessary covered benefit from an insurer's network facility or provider, based on the information available to the insurer at the time the enrollee makes the request.
4. Allows an insurer to contract with a third-party vendor to satisfy the above requirements.
5. Specifies that an insurer is not prohibited from imposing cost sharing requirements that are disclosed in an enrollee’s contract or policy for the following:
a) unforeseen services that arise out of a nonemergency procedure or service; or
b) a procedure or service that was provided to an enrollee and not included in the original out-of-pocked cost estimate.
6. Allows an insurer to submit to DOI the reasons why the insurer believes that it is too difficult to provide any required service information. DOI is required to exempt any insurer that provides this type of explanation.
7. Requires an insurer to annually notify eligible enrollees about the availability of any mechanism to compare allowed amounts among network facilities and providers.
Health Insurer SSP
8. Requires, beginning with the next insurer rate filing, an insurer that offers a plan in the Arizona individual or small group market to establish an SSP for all the plans that it offers.
9. Requires enrollees participating in the SSP to be directly incentivized to shop for lower-cost, high-quality participating providers or facilities for comparable services before and after the enrollees' out-of-pocket limit has been met.
10. Specifies that incentives may include:
a) cash payments;
b) gift cards;
c) credits; or
d) reductions in premiums, copayments, coinsurance or deductibles.
11. Requires the insurer to annually provide notice about the availability of the SSP to each enrollee of a plan that is SSP eligible.
12. Specifies that an incentive made by an insurer is not an administrative expense for rate development and filing purposes.
Miscellaneous
13. Allows, beginning January 1, 2020, DOI to expand the list of health care services that will be considered comparable health care services.
14. Defines various terms.
15. Becomes effective on the general effective date, except as otherwise noted.
Amendments Adopted by Committee
1. Narrows applicability of this legislation to insurers only.
2. Delays effectiveness of certain provisions to the next insurer rate filing.
3. Removes provisions related to estimated facility and provider costs.
4. Makes technical changes.
Amendments Adopted by Committee of the Whole
1. Committee amendment was withdrawn.
2. Requires DOI to exempt an insurer from an enrollee service information request if an explanation is provided.
3. Adds an annual enrollee notification requirement regarding mechanism availability for insurers.
4. Adds the ability for DOI to expand what constitutes comparable health care services.
5. Defines allowed amount and comparable health care services.
6. Makes technical and conforming changes.
Senate Action
HHS 2/14/18 DPA 5-2-0
3rd Read 3/1/18 16-14-0
Prepared by Senate Research
March 2, 2018
FB/lat