1. Weldon (Don) Havins, MD, JD, LLM (Health Law)
Out of Network Billing and Payment AB 469 (2019) effective January 1, 2020
Weldon (Don) Havins, MD, JD, LLM (Health Law)
Professor and Director of Medical Jurisprudence
Touro University Nevada

2. AB 469 important concepts for physicians
For emergency medical services only
Patients pay their in-network cost-sharing expenses to provider
Provider has been out of contract for less than 12 months
Provider has had no contract with payor/insurer, or the contract terminated more than 12 months ago, or the contract was terminated by the insurer for-cause
Less than $ 5000 in dispute
More than $ 5000 in dispute
“fair and reasonable” compensatoin
Baseball type mandatory binding arbitration
“loser” pays costs of “winner”
AB469 does not apply to Medicaid patients

3. AB469 Sec 14
“An out-of-network provider shall not collect from a covered person for medically necessary emergency services, and a covered person is not responsible for paying, an amount that exceeds the copayment, coinsurance or deductible required for such services provided by an in- network provider by the coverage for that person.” An out of network provider may bill the patient (covered person) for the copayment, coinsurance or deductible the same as an in-network provider, but no more than that amount, for emergency medical services.

4. AB469 - Provider was contracted with insurer within last 12 months
If the provider terminated the contract for-cause, or the insurer terminated the contract without cause, the provider receives 108% of the contracted rate as payment in full (minus patient’s copay, coinsurance or deductible)
If the provider terminated the contract without cause, the provider receives 100% of the contracted rate (minus patient’s responsible amount) as payment in full
If the contract was simply not renewed, provider receives 100% of contracted rate plus medical CPI interest rate from the previous year (minus the patient’s responsible amount) as payment in full
If the insurer terminated the contract for-cause – the insurer shall pay what the insurer determines as “fair and reasonable” (except for patient’s responsible amount)

5. AB469 – no provider contract within 12 months
Third party that provides coverage to the covered person (insurer) shall submit to provider “an offer of payment in full for the medically necessary emergency services,” except for any copayment, coinsurance or deductible required to be paid by the covered person
The provider shall accept or reject an amount paid by the insurer as payment in full which is offered with 30 days of receiving the payment. If provider does nothing during the 30 days, the amount paid is deemed as payment in full.
If the provider rejects the amount paid, the provider must request an additional amount the provider is willing to accept as payment in full
If the insurer refuses to pay the additional amount requested, or fails to pay that additional amount within 30 days of receiving the request, the provider must request a list of 5 randomly selected arbitrators from an entity authorized by regulations of the Director of DHHS to provide such arbitrators

6. AB arbitration
For claims less than $ 5,000, arbitration will be conducted in an “economically efficient manner”
Arbitrators may include, without limitation, qualified employees of the State and arbitrators from the voluntary program for the use of binding arbitration established in the Judicial District
For claims of $ 5,000 or more, use arbitration of AAA or JAMS

7. AB 469 Arbitration, continued
Upon receiving list of arbitrators, the provider and the insurer may strike two arbitrators from the list. If more than one arbitrator remains, an arbitrator is randomly selected from the remaining arbitrators by the entity providing the list
The insurer or provider may provide the arbitrator with any relevant information to assist the arbitrator in making a determination
Arbitrator decides whether the insurer’s offer will be payment in full or the providers request will be payment in full (minus patient’s responsible amount, in both cases).
The losing party must pay the costs of the arbitrator
Each party must pay its own attorney fees
No interest fees accrue for 30 days after arbitrator renders a decision.

8. AB469 Arbitration, continued
Decision of the arbitrator and any documents associated with the decision are confidential, and are not admissible as evidence during a legal proceeding; however, the decision of the arbitrator and documents may be disclosed as evidence during a legal proceeding to enforce the decision
Any entity or organization not otherwise subject to this law (public agencies, local governmental agencies providing health benefits) may elect for this law to apply
DHHS must publish on the internet a list of third parties making such election, and
DHHS must adopt regulations that establish the procedure for election

9. AB 469 Arbitration, continued
By Dec 31 of each year, arbitrators must report to DHHS information on arbitration conducted that year
By Jan 31, DHHS must compile a report of aggregated information, de-identified as to providers and insurers, and an analysis of identifiable trends of information
DHHS must post the report on the Internet, and submit report to the Director of the LCB
The DHHS is promulgating regulations on AB469, currently.

10. Example 1
Provider renders emergency medical services on out of network patient.
Provider bills insurer for $ 10,000 for the emergency medical services rendered to the covered patient
Insurer sends a payment for $ 4,000 to provider as offer of payment in full
Provider deposits check and, within 30 days, notifies insurer of rejection of the payment in full offer, and requests $ 4,999 additional payment from insurer.
No response by insurer within 30 days; dispute goes to arbitration
Amount in dispute is $ 4,999

11. Example 1 Arbitrator selected from DHHS approved entity list
Cost of arbitrator = $ 1,000
Provider’s attorney fee = $ 1,000
Arbitrator decides in favor of insurer
Insurer entitled to costs of $ 500 from provider
Provider must pay costs of arbitrator = $ 1,000
Thus, Provider nets $ 2,500 for providing emergency medical services when rejecting payment of $ 4,000 as payment in full from insurer

12. Example 1 – same facts, except Provider is awarded the $ 4,999 in dispute
Provider is entitled to costs of $ 500 from insurer
Provider must pay his or her own attorney = $ 1,000
Provider is not liable for any costs of the arbitrator
Provider nets $ 4,000 plus $ 4,999 in dispute, plus $ 500 costs, minus $ 1,000 for attorney
= $ 8,499

13. Example 2
Provider renders emergency medical services on out of network patient.
Provider bills insurer for $ 10,000 for the emergency medical services rendered to the covered patient as “fair and reasonable”
Insurer sends a payment for $ 4,000 to provider as offer of payment in full
Provider deposits check and, within 30 days, notifies insurer of rejection of the payment in full offer, and requests $ 6,000 additional payment from insurer.
No response by insurer within 30 days; dispute goes to arbitration
Amount in dispute is $ 6,000

14. Example 2 Arbitrators decide in favor of the insurer
AAA arbitration was selected; cost $ 2,000
Provider must pay $ 500 costs of insurer
Provider must pay $ 1,000 for his or her own attorney
Provider’s net is $ 4,000, minus $ 500 costs of insurer, minus $ 1,000 for attorney, minus $ 2,000 arbitration costs
= $ 500 net for emergency services rendered to out of network patient

15. Example 2 Arbitrators decide in favor of Provider
AAA arbitration cost = $ 2,000
Provider entitled to $ 500 in costs from insurer
Provider must pay $ 1,000 for his or her attorney
Provider received the $ 6,000 in dispute
Providers net is $ 4,000 plus $ 6,000 awarded, plus $ 500 costs, minus $ 1,000 in attorney fees
= $ 9,500

16. Considerations
The amount in dispute of $ 5,000 or more creates substantially more arbitration costs.
Strategy of Insurer may be to offer the lowest amount which would likely induce a Provider, considering the economics and uncertainty of arbitration, to accept as payment in full OR to intimidate Provider into making a low counter request knowing the potential costs to the Provider if the provider should lose in arbitration.
Provider must decide, based upon the offer of payment in full, whether to reject the offer as payment in full, and make a request for additional fee. The less than $ 5,000 in dispute may be an important determinant.

17. Thank God He Stopped Talking!!!