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ARIZONA STATE SENATE
Fifty-Fourth Legislature, Second Regular Session
AMENDED
technical correction; public health
(NOW: out-of-network claims; balance billing; disputes)
Purpose
Applies
out-of-network claim dispute resolution requirements to a self-funded or
self-insured employee benefit plan that is otherwise preempted by the Employee
Retirement Income Security Act (ERISA) if the entity administering the plan
enters into a contract with the Department of Insurance (DOI) to voluntarily
comply with specified requirements. Establishes a balance billing dispute
resolution process for health care services organizations (HCSOs).
Background
Current statute outlines 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 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 resolved any existing health care appeal against the insurer following the insurer's initial adjudication of the claim; 2) the enrollee has not instituted legal action against the insurer or provider related to the same surprise bill or the health care services provided; 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 (A.R.S. § 20-3114).
According to the National Conference of State Legislatures (NCSL), self-insurance refers to coverage that is provided by an organization seeking coverage for its members. These organizations set aside funds and pay for health benefits directly and bear the risk for covering medical expenses. Since self-insured plans are not purchased from an insurance carrier licensed by the state, they are exempt from state requirements and subject only to federal regulation (NCSL).
According
to the U.S. Department of Labor, ERISA is a federal law that sets minimum
standards for most voluntarily established retirement and health plans in
private industry to provide protection for individuals in these plans. ERISA:
1) requires plans to provide participants with plan information; 2) sets
minimum standards for participation, vesting, benefit accrual and funding;
3) provides fiduciary responsibilities for those who manage and control plan
assets; 4) requires plans to establish a grievance and appeals process for
participants to get benefits from their plans; 5) gives participants the right
to sue for benefits and breaches of fiduciary duty; and 6) guarantees payment
of certain benefits through a federally chartered corporation if a defined
benefit plan is terminated. ERISA does not generally cover plans established or
maintained by governmental entities, churches for their employees or plans
which are maintained solely to comply with applicable worker compensation,
unemployment or disability laws (U.S. DOL).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Applies the out-of-network claim dispute resolution process to a self-funded or self-insured employee benefit plan that is otherwise preempted by ERISA if the entity that administers the plan enters into a contract with DOI to voluntarily comply with the outlined claim dispute resolution and arbitration requirements.
2. Removes the exemption from out-of-network claim dispute resolution requirements for health plans that do not include coverage for out-of-network health care services and state health and accident coverage for full-time Arizona officers and employees and their dependents.
3. Allows an entity that administers a self-funded or self-insured employee benefit plan that is otherwise preempted from state regulation by ERISA to enter into a written agreement with DOI where the entity agrees to comply with the specified requirements and DOI agrees to allow the plan's enrollees to participate in the dispute resolution and arbitration proceedings.
4. Authorizes the Director of DOI (Director) to use Health Care Appeals Fund monies to perform the administrative function of the out-of-network dispute resolution process.
5. Establishes a balance billing dispute resolution process for HCSOs or providers seeking to collect a disputed balance bill and prescribes related requirements.
6. Allows an HCSO or a provider to seek dispute resolution by filing a request with the Director within one year of the date of service to which the balance bill applies if:
a) the enrollee has resolved any health care appeal that the enrollee may have had against the HCSO following the initial adjudication of the claim;
b) the enrollee has not instituted a civil lawsuit or other legal action against the HCSO or provider related to the claim or health care services provided; and
c) the amount of the balance bill for which the HCSO is responsible is at least $1,000.
7. Requires a provider or their representative to participate in an informal settlement teleconference with an HCSO if an HCSO requests dispute resolution of a balance bill.
8. Permits HCSOs and providers to submit a balance bill arbitration request to the Director.
9. Requires a provider to refund any overpayment made by an HCSO to a provider for a claim subject to arbitration in an amount exceeding the amount awarded through arbitration.
10. Requires an arbitrator to provide a copy of a final written decision following the arbitration hearing to the enrollee if the dispute is related to a bill.
11. Specifies that an HCSO's obligation to its member to ensure that covered services are delivered in accordance with members' plans is not negated by the arbitration or dispute resolution process.
12. Specifies that all pricing information in connection with the arbitration of a balance bill is confidential.
13. Stipulates that an HCSO enrollee is not a party to any payment dispute between the HCSO and a provider and holds enrollees harmless.
14. Allows DOI to charge an ERISA entity a fee, in an amount determined by the Director, for entering into a written agreement.
15. Defines balance bill and HCSO.
16. Expands the definition of an insurer to include an HCSO.
17. Includes a legislative intent clause.
18. Makes technical and conforming changes.
19. Becomes effective on the general effective date.
Amendments Adopted by Committee
· Adopted the strike-everything amendment.
Amendments Adopted by Committee of the Whole
1. Authorizes the Director to use Health Care Appeals Fund monies to perform the administrative function of the out-of-network dispute resolution process.
2. Establishes a balance billing dispute resolution process for HCSOs or providers seeking to collect a disputed balance bill and prescribes related requirements.
3. Allows an HCSO or a provider to seek dispute resolution by filing a request with the Director if certain criteria are met.
4. Requires a provider or their representative to participate in an informal settlement teleconference with an HCSO if dispute resolution is requested.
5. Permits HCSOs and providers to submit a balance bill arbitration request to the Director.
6. Requires a provider to refund any overpayment made by an HCSO to a provider for a claim subject to arbitration in an amount exceeding the amount awarded through arbitration.
7. Specifies that an HCSO's obligation to its member to ensure that covered services are delivered in accordance with members' plans is not negated by the arbitration or dispute resolution process.
8. Specifies that all pricing information in connection with the arbitration of a balance bill is confidential.
9. Stipulates that an HCSO enrollee is not a party to any payment dispute between the HCSO and a provider and holds enrollees harmless.
10. Defines balance bill and HCSO.
11. Makes technical and conforming changes.
Senate Action
HHS 2/12/20 DPA/SE 8-0-0
Prepared by Senate Research
February 26, 2020
CRS/KS/kja