By: Jon Jablon, Esq.
You may have read the blog post that my colleague Andrew Silverio wrote about this case just a few days ago. (If you haven’t, check it out!)
After doing a deep dive into this case, there are a few specific things I want to bring up – and to do so, I’ll do some quoting from the complaint. The plaintiffs – certain medical providers that feel they have been victimized by Cigna – have made many allegations, some very specific, and some more sweeping in nature. While we have no basis to question the facts presented by the plaintiffs, it does seem that the logic employed in the arguments leaves something to be desired. Here are a few paragraphs from the complaint that I find most noteworthy from a self-funding point of view:
13. Plaintiffs’ incurred charges for the Cigna Claims total approximately $72,757,456.28, reflecting Plaintiffs’ usual and customary rates for the particular medical services provided. But Cigna has paid only a small fraction of this amount,—$16,937,637.50, which represents only 23% of its legal responsibility.
The plaintiffs are alleging that the 23% of the total billed charges paid to them by Cigna was “only 23% of [Cigna]’s legal responsibility.”
I’ll pause to let that ridiculousness set in.
These plaintiffs are actually alleging that Cigna’s legal responsibility is to pay 100% of billed charges, across numerous claims. Not surprisingly, the complaint doesn’t support that assertion with any plan language, law, or logic, and I can’t help but wonder what the drafter of this complaint was thinking.
20. In this example, Cigna has told the provider that the unlucky Cigna Subscriber owes it $60,316.07 as the amount not covered under the Subscriber’s Plan, but has told the Subscriber that he/she owes the provider only $895.25 because Cigna negotiated a 98% discount with the provider. In doing this, Cigna misrepresents to Cigna Subscribers that the amounts improperly adjusted by Cigna are “discounts.” This misrepresentation appears on most Cigna Claim Patient EOBs.
Here, the plaintiffs allege that the EOBs provided to them identify that the amount Cigna claims to be above its allowable amount is a discount. This is a common folly and one we strongly caution against making! RBP plans often fall into this trap, since their payments are always at an allowable amount lower than the provider’s billed charges; characterizing the disallowed or excess amount as a “discount,” when it is not, is misleading to providers (causing confusion and frustration, and ultimately hurting outcomes when combating balance-billing) and a misrepresentation to members.
121& 122. For emergency services, the ACA Greatest of Three regulation and New Jersey law require Cigna to reimburse Plaintiffs at least at the in-network rate at which Cigna would reimburse contracted providers for the same services. … Plaintiffs are therefore entitled to the total incurred charges for the elective and emergency claims at issue, less Patient Responsibility Amounts not waived by Cigna.
This is not quite accurate for two reasons. First, the plaintiffs misquote the “Greatest of Three” rule; the amount that must be paid is at least the median in-network rate that each individual plan would pay for the same services, rather than the blundering mischaracterization of “the in-network rate at which Cigna would reimburse contracted providers.” Those are important differences, and, frankly, the attorney should have known better.
Second, even if this premise were accurate as written, the conclusion drawn is still nonsensical. The plaintiffs have indicated that since the payment must be at least the in-network rate paid to the same provider, then the payment must be “total incurred charges” minus patient responsibility. In other words, these providers are suggesting that the in-network rate, across thousands of claims with multiple providers, is 100%. It’s true that 0% discounts exist, but they’re somewhat rare, and it is certainly not the case here that every single relevant discount, accessed by any of the relevant health plans, is 0%.
155. Exhaustion is therefore deemed futile pursuant to 29 C.F.R. § 2560.503-1(l) because Cigna failed to provide a clear basis for its denials and has refused to produce the requested documents necessary for Plaintiffs to evaluate the Cigna Claims denials. Cigna thus offered no meaningful administrative process for challenging its denials of the Cigna Claims.
This last example is another one where many self-funded plans run into unexpected issues. Called “futility,” this doctrine holds that appeals are not necessary, and a claimant can jump straight to a civil suit, if the plan renders appeals futile in any of various ways.
Here, if Cigna has truly issued insufficient EOBs, refused to provide substantiating documentation, and generally didn’t follow the applicable regulations, the providers have a very good argument that appeals are futile. What’s more, though, is that these actions constitute a breach of the Plan Administrator’s fiduciary duties to abide by applicable law and the terms of the Plan Document, which could subject the Plan Administrator to penalties as well as work against the payor in court.
We’re excited to see how this suit unfolds, and we’ll give you more updates when we can!
By: Nick Bonds, Esq.
With the Legislature moving at a glacial pace, the Trump administration has doubled down on its policy objective to reduce health care costs through executive action and administrative rulemaking. A key part of their strategy involves a push to increase transparency in the health care industry – taking special aim at hospitals and drug manufacturers. The apparent logic being that if hospitals and drug makers have to share their actual prices, patient reaction will be strong enough to drag prices down. Experts disagree as to how effective these strategies would be in theory, but we may never have the opportunity to see their impact in practice.
High-profile initiatives to emerge from this approach have run in to a number of difficulties. The administration’s proposed rule requiring drug manufacturers to disclose their drugs’ list prices in their television ads has not been largely repulsed by the pharmaceutical industry, who have had a fair amount of success thus far blocking this rule in court. The pharmaceutical industry argued that this disclosure rule lacked authority and violated their free speech. Last summer, a federal judge in Washington, D.C. ruled that HHS exceeded its authority by compelling them to disclose their prices. HHS appealed, but this past week the U.S. Court of Appeals for the D.C. Circuit appeared unsympathetic. The appeals court agreed that HHS had not been granted the requisite authority by Congress to implement this drug pricing rule, and remained unconvinced that this pricing disclosure requirement would in fact help achieve the administration’s goal of bringing down drug costs. WE expect the administration to appeal yet again.
Announced last November, another transparency-minded federal rule requires hospital systems to disclose the price discounts they have negotiated with insurers for a wide swath of procedures. This disclosure is intended to inform patients of their prospective costs before they are incurred, empowering patients to shop around for the best prices. Here again, debate swirls as to whether this tactic would be effective. Meanwhile, hospital groups have implored the D.C. District Court to block these rules from taking effect echoing the arguments of the pharmaceutical companies before them: that the administration lacks the authority to implement its rule, and that the proposed rule violates their First Amendment rights. Time will tell if the courts come down on the administration’s side this time around.
Other Trump administration efforts have seen fewer setbacks: they have slashed regulations on short terms plans and association health plans (“AHPs”), more generic drugs have been approved, and they are plowing ahead with a notice of proposed rulemaking to allow importation of prescription drugs from Canada. Nonetheless, the number of Americans without health insurance continues to rise, as do marketplace premiums and the actual costs of care. The goal of reducing healthcare costs is an admirable one, we will see how effective the administration’s attempts will be.
By: Andrew Silverio, Esq.
In the final hours of 2019, a coalition of New Jersey medical providers filed a voluminous, 150-page complaint against CIGNA in federal court in New Jersey. The providers, in general, are challenging the validity of CIGNA’s reference-based pricing (“RBP”) program, which guides the payments of numerous self-funded plans in and around New Jersey. As would be expected with such a lengthy and thorough complaint, there are various causes of action being pursued – some allege criminal activities like “embezzlement, theft, and unlawful conversion,” and “a pattern of racketeering activity” under RICO. Others strike more directly at basic and common aspects of any RBP program, while others allege practices that, if the allegations are true, would certainly be reasonably classified as problematic. In the coming weeks and months, we will be monitoring this case closely and providing in-depth analysis and commentary in our upcoming webinars and other releases, but for now, we wanted to highlight some key allegations being made. If the case progresses to any sort of substantive holdings, it could have significant effects on RBP as a whole, depending on which causes of action ended up “sticking.”
A key element of many of the complaint’s allegations is that CIGNA and its vendors, in repricing and processing non-contracted claims, fraudulently represent that the amounts paid are in fact agreed-to, contracted amounts which the providers have agreed to accept as payment in full. The providers state that there is in fact no agreement, which is almost certainly true, but also allege that the amounts actually paid are less than is required under the individual plans. For this second element, the complaint cites to no evidence. This issue would certainly be a matter of plan document language, which is not touched on in the complaint.
In support of these allegations that CIGNA fraudulently represents a nonexistent contractual agreement, the providers allege that the EOBs CIGNA sends to plan participants differ from those it sends to providers. Specifically, the patient EOB allegedly describes the portion of charges disallowed after repricing as a contracted discount, stating that the patient has saved money, while the provider EOB describes this same amount as an “amount not covered,” instructing providers not to balance bill the patient, but to contact CIGNA’s repricing company instead with any disputes. The providers give several examples of such claims paid at 1-3% of billed charges and describe a negotiation and dispute process which they allege is a “war of attrition,” aimed at creating delay, expense, and frustration rather than a good faith procedure truly aimed at resolution.
An allegation key to the RICO/racketeering causes of action stems from CIGNA’s billing practices, which the providers describe as a fraudulent scheme to convert plan assets. The complaint claims that CIGNA and its vendors retain a flat percentage of savings fee based on the initial repricing, and importantly, retain that full fee even when, after a negotiation/dispute process, the plans end up paying additional amounts, sometimes up to a full billed charge, negating any actual savings. For illustration, the complaint describes a situation in which a plan pays 1% of a billed charge, a 30% percentage of “savings” fee to CIGNA, then ends up paying the full billed charge after a provider dispute. The end result is the plan paying 130% of a billed charge, with the extra 30% going to CIGNA.
At the complaint stage, it’s important to remember that all the allegations described here are just that – allegations. Some take aim at practices which, if they are actually being engaged in, are objectively problematic, while others strike at core elements of RBP itself. We will be closely monitoring the case as it develops and providing commentary and analysis on an ongoing basis.
By: Philip Qualo, J.D.
The Trump Administration has been very transparent in their efforts to undermine and dismantle the Affordable Care Act (ACA). There have been several milestones in these efforts, such as essentially gutting the ACA Individual Mandate by reducing the penalty to $0 for individuals who forego health plan coverage for the tax year. The Trump Administration has also passed on the torch to the federal courts, as the 5th Circuit Court of Appeals has recently ruled that the Individual Mandate is unconstitutional, and has kicked the case back to the lower courts to determine whether other parts of the ACA should be overturned as well.
However, there appears to be at least one aspect of the ACA that the Trump Administration appears to support – the revenue generated by PCORI fees. The Patient-Centered Outcomes Research Institute (PCORI) fee was established as a part of the ACA to fund medical research. Insurers and employers with self-insured plans are subject to the fee. The last PCORI fee payment was expected to occur on July 31, 2019 (or July 31, 2020 for non-calendar year plans). The ACA mandated payment of an annual PCORI fee was intended to be a temporary measure as it only applied to plan years ending after September 30, 2012, and before October 1, 2019, to provide initial funding for the Washington, D.C. based institute.
This past year, we have consistently advised our clients that PCORI fees would be a thing of the past – based on the law at that time. However, each time I wrote or spoke those words I had this gnawing feeling in my gut. Although the PCORI fee was intended to be a temporary assessment, it was difficult for me to imagine that we would let a revenue-generating assessment just slowly fade away into oblivion.
Well… it looks like I was right (I should have placed a wager on this!). On December 20, 2020, President Trump signed 2020 spending legislation (the 2020 “Further Consolidated Appropriations Act”), repealing three ACA related taxes: the 40% “Cadillac” Tax on high-cost employer-provided health coverage, a 2.3% excise tax on medical devices, and the Health Insurance Tax (HIT) on fully-insured plans. Although these cuts would appear to be in line with the Administration’s efforts to obliterate the ACA’s existence, for some reason, the Trump Administration make a last-minute decision to preserve and extend the PCORI fee for another 10 years through the Act. This means employers with self-funded plans must continue paying the administratively burdensome PCORI fee.
Although the future of the ACA is still a question mark at this time, based on this recent extension of a small portion of the ACA, I think it is fair to conclude that PCORI fees are here to stay. In about 9 years from now, whether the ACA is still here or not, I predict PCORI fees are either extended … again, or written into another legislation to make it a permanent excise tax on health plans.
Please note, that the next PCORI fee is due by July 31, 2020. The IRS has yet to announce the rates for this year, so say tuned!
By: Kevin Brady. Esq.
While businesses who are considering a potential merger or acquisition have a lot on their plates, one thing that should always be addressed is the impact that the transaction will have on the benefit plans of both the buyer and the seller. While it probably does not represent the biggest concern, overlooking the potential impact on benefit plans can cause major headaches when it comes to potential mergers and acquisitions.
Because the impact on the benefit plans will often be determined by the nature of the transaction and the specific agreement between the buyer and seller, it is important that both parties are aligned when determining how employees affected by the merger or acquisition will be provided benefits after the transaction is complete.
For our limited purposes, there are typically three types of transactions when it comes to mergers and acquisitions; an asset sale, a stock sale, and a merger.
In an asset sale for example, the buyer will typically purchase selected assets from another business (i.e. a particular department, facility, or service line). The employees who are affected by the transaction are typically considered terminated and immediately rehired by the new employer. The buyer does not have a legal obligation to hire those employees but often will do so if it aligns with their business practices. Those employees (while they may not notice a significant change in their employment or benefits) are most likely going to be considered terminated and immediately transitioned to the new employer’s health plans. Generally speaking, buyers do not continue ERISA benefit plans in asset purchases. Some, if not most, continue to offer similar benefits either under an existing employer group health plan or a new plan established after the purchase of the assets. If the buyer intends to offer similar benefits under their existing plan, they must ensure that their plan allows coverage for these individuals.
On the other hand, in the event of a stock purchase, the buyer will typically “step into the shoes of the seller” in terms of its rights and responsibilities as it relates to ownership of the business (including ERISA plans). The employees of the seller are not considered terminated in the event of a stock purchase (although this does not guarantee future employment) and ERISA plans in effect at the time of the sale are typically continued after the stock purchase has taken place.
Finally, in a merger, two entities will combine to become one business entity. In this situation, similar to a stock purchase, the employees are not considered terminated at the time of the merger and if an ERISA plan was in effect at the time of the merger it will likely be continued. However, the impact on a particular entities benefit plan will often be determined based on the specific agreement between the parties.
As the nature of the transaction will have a major impact on benefit plans, it is always important to discuss the intent of both parties as it relates to their employees and those employees’ benefits. Often times, a potential merger or acquisition will include a thorough review of an entity’s compliance as well. Has the seller complied with the strict requirements to file form 5500s? Is the plan properly funded? Does the plan document itself allow for another employer to continue benefit under the plan? These are all questions, among many more, that should be asked and answered before moving forward with a potential merger or acquisition.
Finally, the buyer or the new entity (in the event of a merger), must ensure that they are compliance as it relates to their new employees and the benefits being offered to them. Buyers and sellers who could find themselves in a potential merger or acquisition should keep these things in mind as they move forward with those decisions. While a potential merger or acquisition can be a great thing for those involved, it would be a shame for unidentified issues with a benefit plan to hold things up or even prevent a potential transaction.
By: Ron E. Peck, Esq.
I really enjoy the quote, attributed to Haruki Murakami, that “Pain is inevitable. Suffering is optional.” This really hits home for me for a few reasons, personal and professional, but for our purposes – let’s consider how it relates to the health benefits industry and healthcare as a whole.
Anyone paying attention to the media and political debates will no doubt make note of the constant rhetoric regarding healthcare, and more to-the-point, the “cost” of healthcare. I’ve (here and elsewhere) discussed ad-nauseam my position that health “care” and health “insurance” are not the same. That insurance is a means by which you pay for care, and is not care itself. That by addressing solely the cost of insurance, and not the cost of care, you build a home on a rotten foundation. So, you can likely imagine some of the “ad-nauseam” I feel in my stomach when I hear the candidates talking on and on about how they’ll “fix” the problem of rising healthcare costs by punishing insurance carriers and making health “insurance” affordable (including Medicare-for-All).
The issue is that, ultimately, whether I pay via cash, check or credit… and whether I pay out of my own bank account, my wife’s account, or my parent’s account… at the end of the day, a beer at Gillette Stadium still costs more than a beer from the hole-in-the-wall pub, and if I keep buying beer from (and thereby encouraging the up-charging by) the stadium, prices will increase and whomever is paying (and in whatever form they are paying) will be drained, and no longer be able to pay for much longer. In other words, making insurance affordable (or free) without addressing the actual cost itself is simply passing the buck.
So, this brings me to the quote: “Pain is inevitable. Suffering is optional.”
Pain – the pain we feel as we are forced to deal with a costly, yet necessary, thing … healthcare. As technologies improve, research expands, and miracles take place every day, I absolutely understand that with the joys of modern medicine, come too the pain of cost. We must identify ways to reward the innovators, the care takers, the providers of life saving care.
Yet, we – as not only an industry, but as a nation – also assume that with this inevitable pain, so too must come the suffering. Suffering in the form of bankruptcy for hard working Americans and their families. Suffering in the form of unaffordable care, patients being turned away by providers, and steadily rising out of pocket expenses.
I do not believe that this suffering needs to be inevitable. If instead we accept the inevitability of the “pain” inherent in healthcare, and the costs of providing healthcare, but instead identify innovative ways to address those costs, then we can avoid the suffering. Our own health plan, for instance, rewards providers that identify and implement ways to provide the best care, for the least cost. Our plan rewards participants who utilize such providers as well. We educate our plan participants regarding how, unlike in many other aspects of life, in healthcare you do NOT “get” what you “pay for.” That fancy labels, advertisements, and price tags do not equate to better care. We teach our participants how to leverage not only “price transparency,” but also quality measurements to identify the “best of the best” when seeking care – providers that perform as well or better than the rest, for the lowest cost. Rather than accept the “inevitability” of suffering, we embrace the pain – we endure the costs, the time, the resources necessary to actually care, and make ourselves educated consumers of healthcare.
The result? Plan participants – employees that have been on the plan for five or more years – will, beginning in 2020, not make any contribution payment to our plan. That’s right; their “premium” is zero dollars. The cost of their enrollment is covered, 100%, by the plan sponsor. The plan sponsor, meanwhile, can afford to do this thanks to efforts it has made, as well as efforts made by its plan participants, to keep the costs down. Indeed, a self-funded employer like us can make a choice – either assume that the suffering is inevitable, and pass the cost onto the plan members (incurring the wrath of your own employees and politicians alike), or, see that the suffering is optional, and nip it in the bud. We have identified ways to better deal with the inevitable pain, thereby minimizing the suffering endured by our plan participants.
It can be done, and we did it. You can too, but the first step is accepting that some things are inevitable, and others are not. Assigning inevitability to something that is not in fact inevitable is a form of laziness and blame shifting; and the time has come to stop that behavior, accept responsibility, do the painful work necessary to change things, and recognize that – no pain, no gain.
Our consulting team (via PGCReferral@phiagroup.com) is often presented with the following scenario: Patient A visits Hospital, and the Plan pays certain benefits to Hospital which are later discovered to have actually been excluded by the terms of the plan document. This is a classic overpayment scenario, except that Hospital refuses to refund the overpayment to the plan (which it is well within its rights to do). In response, to try to avoid the loss, the Plan decides to activate the right it has given itself to offset future benefits payable against amounts due to the Plan. The right to offset future benefits is a common one, and there is nothing inherently unenforceable about offsetting benefits due to a patient, when that particular patient owes the plan money.
This health plan interprets its offset provision to apply across different patients. Since it is unknown whether or when Patient A will incur more covered claims, the plan instead decides to recoup its overpaid funds by withholding benefits due to Patient B (who had the misfortune of being the next patient to visit Hospital).
The question posed to our consulting team is whether this is an acceptable practice.
Our answer is no.
First, regarding overpayments in general: with some exceptions – such as payments by the Plan in excess of a contracted amount, or in excess of billed charges (for non-contracted claims) – providers do not have a legal obligation to refund money to a health plan. Instead, courts have indicated that the overpayment was technically made to the patient, since the plan paid money that would have been patient responsibility, had the plan correctly denied that amount.
Plan Administrators have certain fiduciary duties pursuant to ERISA and common law, including to act solely in the interest of plan participants, to act with the exclusive purpose of providing benefits and paying reasonable plan expenses, and to strictly abide by the terms of the Plan Document. The most apt interpretation of the practice of cross-patient offsetting is that the Plan has withheld benefits to Patient B in order to benefit the plan, such that Patient B is denied benefits to account for a prior error on the part of the plan. The plan’s attempt to make itself whole at Patient B’s expense – even though Patient B played no role in, nor benefitted in any way from, nor was even aware of, the overpayment – could be interpreted as a violation of an important fiduciary duty.
Cross-patient offsetting negates benefits due to patient B because of the Hospital’s refusal to refund money to the Plan. When we consider that it is not the provider that has technically been overpaid, but Patient A, it becomes more clear that Patient B cannot have benefits withheld to compensate for the overpayment made to Patient A. It’s an attempt to punish Hospital for not refunding money that is legally due from Patient A. Meanwhile, Patient B has paid her contributions in exchange for benefits from the plan; to withhold benefits due to Patient B because another, unrelated patient has not repaid the plan money allegedly owed is a practice we strongly recommend against.
Overpayments happen, and The Phia Group can assist in recouping them – but please, please do not offset a perceived overpayment against future claims incurred by other patients!
With Presidential impeachment eating up the above-the-fold coverage pretty much universally, it is important to remember that Congress has other pressing issues to attend to. While a number of Democratic candidates are worried their mandatory attendance at the Senate trial will eat up valuable campaign time on the ground in the early primary states, the rest of Congress is still trying to keep the country running.
For instance, while Democrats and Republicans have an “agreement in principle” on a stopgap appropriations deal to fund the government through the end of the fiscal year, the spending package still needs to be finalized an passed before December 20 to avoid another looming shutdown. Meanwhile, the House Ways and Means Committee is working to ratify the United States-Mexico-Canada Agreement (USMCA), the Trump Administration’s replacement for NAFTA. Both of these urgent matters of business appear to have bipartisan support, but Congress is certainly feeling the pressure as this week gets underway.
The major sticking point in the USMCA negotiations appears to be the debate around the trade deal’s prescription drug provisions. The pharmaceutical lobby has long been pushing for prescription drug protections in trade deals – remember the TPP – but this time around the White House’s primary objective appears to be lowering drug prices. A concession to strike protections for biologics from the trade agreement appears to have clinched Democratic support, who opposed the deal’s 10 years of regulatory data protection for biologics innovations. Democrats argued that the biologics protections would increase drug prices in the U.S. and delay development of cheaper biosimilar drugs.
While the USMCA appears on track for ratification, Speaker Pelosi’s prize fight of the moment is her drug pricing bill – which passed the House along party lines last Thursday. The bill, named for late Representative Elijah Cummings, aims to expand Medicare, reign in drug prices, and allow the HHS Secretary to negotiate prices of between 50 and 250 prescription drugs (including insulin). President Trump appears poised to veto the Elijah Cummings Lower Drug Costs Now Act, while the Senate is debating a more moderate proposal – the Prescription Drug Pricing Reduction Act (PDPRA). The PDPRA would add consumer protections to cap out-of-pocket (OOP) prescription drug spending, and take measures to redesign Medicare Part D and reign in drug prices.
Congress has a lot of irons in the fire this week. We shall see what they can hammer out.
December 1st marked the 31st observance of World AIDS Day, an opportunity for the world to unite in efforts to stop HIV, support those affected by HIV, and remember those who have lost their lives to HIV-related diseases. The Centers for Disease Control and Prevention (CDC) first called attention to what is now known as AIDS in 1981.
In 1985, the first HIV test became commercially available. But the number of people who died from AIDS kept growing. The first licensed drug, AZT, had to be given intravenously. At the doses initially used, the drug was toxic. Eventually, an oral formulation was made but it had to be taken in high doses every four hours and usually, only people in clinical trials could gain access to it. Activists had to pressure regulatory agencies to test combinations of new drugs because if each drug were tested on its own, any remission would be temporary, as HIV could easily overcome a single drug.
Since the mid-1990s, scientists have developed an array of antiretroviral drug regimens that durably suppress the replication of HIV. Antiretroviral drugs are used to treat HIV, to maintain the health of an individual, and to prevent transmission of the virus. Numerous studies have demonstrated that when people living with HIV use antiretroviral therapy to achieve and maintain a durably undetectable level of virus, they do not sexually transmit HIV. Over the years, these regimens have been updated and refined to be even more effective, with significantly fewer side effects.
Today, antiretroviral drugs combined into a single pill taken once a day can enable a person living with HIV to achieve a nearly normal lifespan. HIV-negative populations at risk for HIV can reduce the risk of acquiring HIV by 99% by taking a single pill daily as pre-exposure prophylaxis, or PreP. Emergency post-exposure prophylaxis, or PEP, also can prevent HIV from becoming established in the body if begun within three days of exposure and taken for an additional 28 days.
The passage of the Affordable Care Act’s (ACA) in 2010 was another major milestone in improving access to care and, ultimately, health outcomes, for people with HIV in the United States. The ACA’s prohibition against denying or canceling coverage based on pre-existing conditions had a significant impact on individuals living with HIV. Prior to the ACA, many people living with HIV or other chronic health conditions experienced obstacles in getting health coverage, were dropped from coverage, or avoided seeking coverage for fear of being denied. Additionally, the ACA requires most group health plans to cover certain recommended preventive services, including HIV testing, without additional cost-sharing, such as copays or deductibles. Since one in eight people living with HIV in the U.S. are unaware of their infection, improving access to HIV testing has helped more Americans learn their status so they can be connected to appropriate care and treatment.
Despite the past 30 years of milestones in treatment, healthcare, and prevention of HIV-related illnesses, there is still no cure for AIDS at this time. However, the remarkable progress that has been made in the past three decades leads one to believe that the goal of discovering a cure may soon be a reality.
Starting in 2020, Washington’s new law aimed at putting an end to a particular form of balance billing, known as “surprise” billing, will go into effect. This includes situations where a patient has no reasonable opportunity to make an informed choice regarding their utilization of in-network versus out-of-network providers, for example in the case of emergency services or non-emergency surgical or ancillary services which are provided by an out-of-network provider within an in-network facility. In these cases, the patient has no way of choosing what providers to utilize, or may not know (and would have no reason to think to ask) that they could be treated by an out-of-network provider while visiting an in-network hospital.
Washington’s law mirrors the approach we have seen in several other states – it takes the patient out of the equation entirely by prohibiting the provider from pursuing any balances from them, and leaves the provider and payer to sort out the issue of any remaining balances.
In resolving outstanding balances, the provider and payer must come to a “commercially reasonable” amount based on payments for similar services in the same geographic area, and in this regard the state actually provides a data set for the parties to reference. If the parties can’t come to an agreement, either can request arbitration, and the arbitrator will choose one of the parties’ last proposed payment, encouraging the parties to submit reasonable amounts (for fear of having to defer to the other party’s offer).
Importantly, the law does not (and cannot, because of federal preemption) apply to private, self-funded plans which are governed by ERISA. However, such plans can opt-in to the law via annual notification to the state. These plans should not expect to enjoy the benefits of the law’s balance billing prohibitions if they choose not to opt-in, and reference to the state’s claims database, available on the Washington Department of insurance website, should help them in determining whether it makes sense to do so.
The full law can be found at http://lawfilesext.leg.wa.gov/biennium/2019-20/Pdf/Bills/Session%20Laws/House/1065-S2.SL.pdf, and a useful summary is available at https://www.insurance.wa.gov/sites/default/files/documents/summary-of-2019-surprise-billing-law.pdf.