Michigan has become the latest in a string of states that have elected to tackle the issue of surprise billing after a number of federal bills to address the issue have stalled out or lost traction in recent years.
Signed by Gov. Gretchen Whitmer on Oct. 22, the package of bills amend Michigan Public Health Code to add surprise billing protections designed both to ensure consumers are made explicitly aware when they are going to receive non-emergent services from an out-of-network provider and create a formula for how insurers must reimburse non-participating providers for their services.
The following is a brief summary of the new law:
- Non-participating health care providers must inform patients in advance of a scheduled procedure that their insurer may not cover all of their medical services and that they can request care from an in-network provider. The notice must inform the patient that a non-participating provider must provide them a good-faith estimate of the cost of the health care services to be provided. The patient or their representative must sign to consent to receive care from a nonparticipating provider.
- When consent is not obtained in advance of treatment, the patient’s insurer is required in such instances to pay either 150% of the Medicare FFS fee schedule, or the median amount negotiated by the patient’s insurer for the region and provider specialty, whichever is greater.
- Beginning July 1, 2021, any nonparticipating provider that believes the amount negotiated by the patient’s insurer was calculated incorrectly may request that the Department of Insurance and Financial Services review the calculation.
- The Department may request data on the median amount negotiated by the patient’s insurer with participating providers or any documents, materials, or other information that it believed was necessary to assist it in reviewing the calculation.
- An arbitration process through the Department is available to providers if an insurer denies a claim.
- Beginning Jan. 1, 2021, those who fail to comply with these practices may face a host of disciplinary actions, including fines of up to $250,000.
The move puts Michigan in line with states such as Oregon and New York, which have also passed similar legislation in recent years. While some federal legislators had attempted to tie a national surprise billing fix to future COVID-19 stimulus packages, those fixes have languished as Republicans and Democrats have been unable to reach a new deal in advance of the presidential election.