A bill pitting physicians against an unusual alliance of insurance industry and consumer advocates on the subject of the arbitration of out-of-network health insurance claims was postponed indefinitely by the Colorado Senate Health & Human Services Committee on April 10.
House Bill 25-1151 was introduced in January and had a bipartisan group of sponsors, Republican Rep. Anthony Hartsook, Democratic Rep. Rebekah Stewart and Democratic Sen. Dylan Roberts.
Stewart said that the bill’s intent was to ensure that emergency care providers were paid the state-mandated rates for out-of-network care, including by giving those providers a method of batching those claims for an arbitration process. She emphasized that the batching process created by the bill for these claims was a narrow one.
Stewart also said that the bill was trying to solve a problem of emergency claims being paid out at a lesser code than originally billed at.
“We as providers have the expertise to know what level of care we are billing for and expect to get paid for that,” Stewart said. “So the second issue is when a particular code is billed for, but what is reimbursed is actually a different code than what was originally billed for. I think all of us can agree that that is a problem.”
Hartsook said that while there was no problem with disagreements in business, there was one when health care providers had to settle them individually. “If you’re doing it one by one, that is very time consuming to you as a provider. It’s very labor intensive, it’s very paper intensive, it costs money and it takes away from your ability to provide health care,” Hartsook said.
The chair of the House committee, Rep. Kyle Brown, noted that similar bills had previously been run and rejected by the legislature. Despite past failures, the House committee voted to advance the bill by a margin of 11-2 on Feb. 19. It also passed in its final reading before the House on a vote of 40-21.
Jill Mullen, a policy advisor at the state’s Division of Insurance, said that the division was in opposition to the bill.
“In 2019, the division worked with a diverse stakeholder group to pass legislation that prohibits balance billing,” Mullen said. “That legislation included a reimbursement rate for out-of-network providers and set up an arbitration process for providers to make the case that given the complexity and circumstances of a particular case, a higher reimbursement rate was warranted. Since the bill passed, the division has set up an arbitration process that we believe has been working for all parties.”
She told the committee that the division had no evidence of down coding or underpayment of out-of-network claims. “The providers have not provided us any evidence or examples that this has taken place,” Mullen said.
Kevin McFatridge, executive director of the Colorado Association of Health Plans, said that the bill would undo the work done in 2019 that protects consumers from balance billing, which is also referred to as surprise billing. A year later, Congress passed additional legislation, the No Surprises Act, also aimed at reducing surprise billing.
“This bill does not simply align Colorado law with the federal No Surprises Act,” McFatridge said. “What it does is cherry-pick a provision, the ability to batch arbitration claims, and leaves behind the rest; the rest being that there is no reimbursement schedule at the federal level.”
Isabel Cruz, policy director at the Colorado Consumer Health Initiative, noted that it wasn’t often that the division, insurers and consumers aligned on something.
“The proposal to batch claims creates a loophole that allows providers to bypass the benchmark rate, inflating costs across countless claims,” Cruz said. “We’ve seen this play out in other states and under the federal No Surprises Act, where large private equity backed provider groups manipulate arbitration to extract higher payments.”
Jasmeet Dhaliwal, an emergency physician and president of the Colorado chapter of the American College of Emergency Physicians, said that his organization supported the bill because the current system for out-of-network claims jeopardizes the viability of emergency physician practices.
“In our cases, physicians in emergency departments, our average pay per claim is about $200-400, that’s our claim amount,” Dhaliwal said. “If we get underpaid by $20, $100, that sounds like lower dollar amounts, but for our practices, it means the difference between a viable practice and a non-viable practice.”
Kim Warner, an obstetrician/gynecologist and president of the Colorado Medical Society, said that right now, physicians are at a disadvantage when it comes to getting paid fairly and are drowning in administrative tasks.
“House Bill 1151 will prevent some health plan gaming of the system,” Warner said. “That’s a key takeaway. Some of these health plans are grinding the health care community down. It’s bad for patients because of decreased access, bad for physicians because of more administrative hassles and huge burnout.”
Senate Democrats on the health and human services committee ultimately dealt the final blow to the bill. The four votes in support of the bill were evenly split by party, with two Democrats, Sens. Kyle Mullica and Lindsay Daugherty voting with Republican Sens. John Carson and Lisa Frizell. The only Republican to vote against the bill was Sen. Scott Bright, who joined Democratic Sens. Dafna Michaelson Jenet, Lisa Cutter, Iman Jodeh and Mike Weissman in voting against the bill.
Frizell said that while she had gone back and forth on the bill, from a pretty strong no at the onset to a yes vote by the end of the hearing. “The idea of claims not being paid by insurers because of some determination that the treatment was non-emergent is a little gob-stopping to me,” Frizell said.
“For somebody in some room in another state to decide that, ‘Gee, that really wasn’t an emergency situation,’ that’s very challenging for me to accept,” Frizell added.
Daugherty said that she was an enthusiastic yes for the bill. “What we are talking about are the folks who, when you have an emergency life or death situation and you go to the emergency room, these are the folks that we are supporting today who save your life and your family’s life,” Daugherty said.
Weissman said that he appreciated the problem that the bill was trying to solve for small and independent provider groups, but that he couldn’t get to a position to support the bill. “I want providers, especially emergency providers, to get paid what their skill is worth,” Weissman said.
“My concern with the bill, as it’s in front of us, is possibly it is going to provide an avenue for the folks I think that you’re bringing this bill for,” Weissman said. “I think in so doing it could open our system to other problems in ways that would ramify in rates.”