Senate Bill 172, sponsored by Sen. Barbara Favola, has passed the full Senate 36-4, and is the only option on the table to end surprise billing.
To end surprise billing, SB 172 does not set a rate in the Code and instead protects patients and puts the onus back on the insurers and providers to work out payment — with arbitration as a backstop. The bill is supported by emergency physicians, the Medical Society of Virginia, physician specialties, hospitals and patient advocacy groups.
SB 172 provides a dispute-resolution process as an alternative way to solve the problem of surprise billing. The legislation breaks the stalemate between insurers and healthcare providers and avoids the need for the General Assembly to establish payment rates in statute.
We were able to defeat the insurers' bills that wanted to set out-of-network rates at the lower of 125% of Medicare or the in-network rate. However, the insurers do not support SB 172, and will not quit trying to get their payment benchmark to be the solution.
SB 172 uses an arbitration model that has been very successful in stabilizing emergency care in other states, but in a manner that is specific to Virginia.
More on SB 172:
It proposes dispute resolution as an alternative way to solve the problem of surprise billing to break the stalemate between insurers and providers. It avoids the need for the General Assembly to arbitrarily establish payment rates in statute.
Patients will be guaranteed not to be billed for emergency or non-emergency out-of-network claims.
Doctors and hospitals will only request arbitration if they do not think the “usual and customary payment” is reasonable AND the normal dispute process breaks down. This will not be many cases: a Board of Insurance study showed that 0.3% of claims were out-of-network emergency claims in Virginia. That’s a tiny fraction of claims, meaning the number that could end up in arbitration would not be large, even if you add in non-emergencies. In New York, there were less than 1,000 cases a year in a state with a population twice that of the Commonwealth.
It requires arbitration to be completed in 60 days and also allows providers to batch claims together so no one is arbitrating a single claim at a time, which would be administratively burdensome for both parties.
The goal of arbitration is to serve as a powerful backstop, providing a strong incentive for both insurers and providers to set fair payments and prices right from the start.
We believe the pressure is on to pass legislation this year, and that if we can get our bill to the full House floor, the pressure to pass it will be greater than any opposition.
