On Oct. 22, 2020, the Michigan Legislature enacted Enrolled House Bills 4459 and 4460 to protect consumers from surprise medical billing. The legislation creates limitations on out-of-network provider payments, requires providers to afford certain disclosures to patients regarding the costs of services and, overall, protects patients from excessive balance medical billing. Balance billing occurs when a healthcare provider first submits a claim to a patient’s insurer, and subsequently bills the patient for the outstanding balance that the patient’s insurance company did not cover.

To prevent surprise balance billing, House Bill 4460, now Public Act No. 235, requires out-of-network providers administering care to non-emergency patients to make the following disclosures to the patient:

• That the patient’s health insurance may not cover all services the out-of-network provider is scheduled to provide;
• A good faith estimated cost of services to be provided to the patient; and
• That the patient may ask the services to be performed by an in-network provider.

These disclosures must be provided in a written format with at least 12-point font. MCL § 333.24509 provides sample language that providers may use for their disclosures. An out-of-network provider must also obtain the patient’s signature on its disclosure form. This disclosure must be provided at the earliest of the following:

• 14 days before the provision of services, if the service was scheduled at least 14 days in advance at a hospital, surgical outpatient facility, skilled nursing facility, laboratory, or imaging center;
• At the time of the patient’s first contact regarding the services, if being provided in a physician’s office or certain outpatient setting;
• At the presurgical consultation;
• At the time of the scheduling call for the services;
• At the preoperative review for the services; or
• At the time of any other contact before the health care service.

House Bill 4459, now Public Act No. 234, limits the amount an out-of-network provider can collect in specific circumstances by implementing fee restrictions. These circumstances include:

• Where the service is provided to an emergency patient, is covered by the emergency patient’s health benefit plan, and is provided by a nonparticipating provider at either a participating health facility or nonparticipating health facility
• Where the service is provided to a nonemergency patient by a nonparticipating provider at a participating health facility and the service covered by the nonemergency patient’s health benefit plan
• Where a nonemergency patient does not have the ability or opportunity to choose a participating provider or the nonemergency patient has not been provided the disclosures required by HB 4460
• Where the service is provided by a nonparticipating provider at a hospital that is a participating health facility to an emergency patient who was admitted to the hospital within 72 hours after receiving a health care service in the hospital’s emergency room

In these circumstances, the provider is limited to collecting the greater of:

• The median amount negotiated by the patient’s carrier for the region and provider specialty, excluding any in-network coinsurance, copayments, or deductibles; or
• 150% of the Medicare fee for service fee schedule for the health care service provided, excluding any in-network coinsurance, copayments, or deductibles.
As of Jan. 1, 2021, providers who fail to comply with these practices may face a host of disciplinary actions, including fines up to $250,000 and/or educational training programs. Beginning on July 1, 2021, any out-of-network 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.
For additional information or assistance regarding the information in this article, or any other health professional issue, contact Kaitlin A. Nucci, Esq., at Wachler & Associates at (248) 544-0888.