Reducing Costs for Out-of-Network Services Act of 2019

II 116TH CONGRESS 1ST SESSION S. 967 To amend the Public Health Service Act to establish limitations on cost- sharing for out-of-network services in the individual market, to prohibit balance billing for such services, and for other purposes. IN THE SENATE OF THE UNITED STATES APRIL 1, 2019 Mrs. SHAHEEN (for herself, Ms. BALDWIN, and Mr. MERKLEY) introduced the following bill; which was read twice and referred to the Committee on Health, Education, Labor, and Pensions A BILL To amend the Public Health Service Act to establish limita- tions on cost-sharing for out-of-network services in the individual market, to prohibit balance billing for such services, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Reducing Costs for 4 Out-of-Network Services Act of 2019’’. 5 VerDate Sep 11 2014 22:59 Apr 05, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S967.IS S967 kjohnson on DSK79L0C42 with BILLS 2 •S 967 IS SEC. 2. LIMITATIONS ON COST-SHARING FOR OUT-OF-NET- 1 WORK SERVICES. 2 (a) IN GENERAL.—Subpart 2 of part B of title 3 XXVII of the Public Health Service Act (42 U.S.C. 4 300gg–51 et seq.) is amended by adding at the end the 5 following: 6 ‘‘SEC. 2754. LIMITATIONS ON COST-SHARING FOR OUT-OF- 7 NETWORK SERVICES. 8 ‘‘(a) HEALTH INSURANCE ISSUER REQUIREMENT.— 9 A health insurance issuer offering health insurance cov- 10 erage, in the individual market in a State, that offers ben- 11 efits with respect to a health care service provided in the 12 State by a participating provider shall ensure that the 13 cost-sharing requirement with respect to such service pro- 14 vided in the State by a nonparticipating provider does not 15 exceed the rate selected by the applicable State authority 16 under subsection (c)(1) for such service. 17 ‘‘(b) LIMITATION ON CHARGES BY HEALTH CARE 18 PROVIDERS.— 19 ‘‘(1) IN GENERAL.—A health care provider may 20 not charge a patient for a health care service at a 21 rate in excess of the following: 22 ‘‘(A) In the case of a patient who is en- 23 rolled in health insurance coverage in the indi- 24 vidual market that does not provide out-of-net- 25 work benefits for such service, the health care 26 VerDate Sep 11 2014 22:59 Apr 05, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S967.IS S967 kjohnson on DSK79L0C42 with BILLS 3 •S 967 IS provider may charge such patient no more than 1 the rate selected by the applicable State author- 2 ity under subsection (c)(1). 3 ‘‘(B) In the case of a patient enrolled in 4 health insurance coverage in the individual mar- 5 ket that provides out-of-network benefits for 6 such service, the health care provider may 7 charge such patient no more than— 8 ‘‘(i) the rate selected by the applicable 9 State authority under subsection (c)(1); 10 minus 11 ‘‘(ii) the sum of— 12 ‘‘(I) the payment made by the 13 health insurance issuer to the health 14 care provider pursuant to such cov- 15 erage; and 16 ‘‘(II) the out-of-network cost- 17 sharing amount required under such 18 coverage. 19 ‘‘(C) In the case of an uninsured indi- 20 vidual, the health care provider may charge 21 such patient no more than the lower of— 22 ‘‘(i) the rate selected by the applicable 23 State authority under subsection (c)(2); or 24 VerDate Sep 11 2014 22:59 Apr 05, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S967.IS S967 kjohnson on DSK79L0C42 with BILLS 4 •S 967 IS ‘‘(ii) the rate otherwise allowed to be 1 charged to such an individual for such a 2 service under an applicable law in the 3 State. 4 ‘‘(2) ENFORCEMENT.—A health care provider 5 that violates the requirement under paragraph (1) 6 shall be subject to the same civil monetary penalties 7 described in paragraph (1) of section 922(f), includ- 8 ing the provisions described in paragraph (2) of such 9 section, as a person who commits a violation de- 10 scribed in paragraph (1) of such section. 11 ‘‘(c) RATE.— 12 ‘‘(1) INDIVIDUALS ENROLLED IN HEALTH IN- 13 SURANCE COVERAGE.—An applicable State authority 14 shall select for the State as applicable for purposes 15 of subsection (a) and subparagraphs (A) and (B) of 16 subsection (b)(1) one of the following as a maximum 17 rate for a health care service for individuals enrolled 18 in health insurance coverage in the individual mar- 19 ket in the State: 20 ‘‘(A) 125 percent (or, in a case described 21 in paragraph (3) and at the discretion of the 22 applicable State authority, 200 percent) of the 23 allowed charges determined for the item or 24 service under the original Medicare fee-for-serv- 25 VerDate Sep 11 2014 22:59 Apr 05, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S967.IS S967 kjohnson on DSK79L0C42 with BILLS 5 •S 967 IS ice program under parts A and B of title XVIII 1 of the Social Security Act. 2 ‘‘(B) The 80th percentile of usual, cus- 3 tomary, and reasonable charge rates for the 4 service for the geographic area, as determined 5 by a database of usual, customary, and reason- 6 able charges selected by the applicable State au- 7 thority and approved as appropriate by the Sec- 8 retary. 9 ‘‘(C) 100 percent of the allowed charges 10 for the service if the service were provided by 11 a participating provider, which shall be deter- 12 mined based upon the average actual allowed 13 rate under the coverage for all participating 14 providers for such service in the health insur- 15 ance issuer’s participating provider network. 16 ‘‘(2) UNINSURED INDIVIDUALS.—An applicable 17 State authority shall select for the State as applica- 18 ble for purposes of subsection (b)(1)(C) one of the 19 following as a maximum rate for a health care serv- 20 ice for uninsured individuals: 21 ‘‘(A) The rate described in subparagraph 22 (A) of paragraph (1). 23 ‘‘(B) The rate described in subparagraph 24 (B) of paragraph (1). 25 VerDate Sep 11 2014 22:59 Apr 05, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S967.IS S967 kjohnson on DSK79L0C42 with BILLS 6 •S 967 IS ‘‘(3) SERVICES PROVIDED IN RURAL AREAS.— 1 A case described in this paragraph is a case in which 2 the item or service is furnished by a provider of 3 services (as defined in subsection (u) of section 1861 4 of the Social Security Act) or supplier (as defined in 5 subsection (d) of such section) in a rural area (as 6 defined in section 1886(d)(2)(D) of such Act). 7 ‘‘(4) DEFAULT RATE.—In the case in which an 8 applicable State authority does not select a rate 9 under paragraph (1) or (2) for a service, the max- 10 imum rate applicable in the State for the service for 11 purposes of subsections (a) and (b) shall— 12 ‘‘(A) be the rate described in subparagraph 13 (A) of paragraph (1), if the service is covered 14 under the original Medicare fee-for-service pro- 15 gram under parts A and B of title XVIII of the 16 Social Security Act; or 17 ‘‘(B) be a rate established by the Sec- 18 retary, if the service is not covered under such 19 program. 20 ‘‘(5) CLARIFICATION.—In selecting a rate under 21 paragraph (1) or (2) for a health care service, the 22 applicable State may select a rate that differs from 23 the rate selected under such paragraph for a dif- 24 ferent health care service. 25 VerDate Sep 11 2014 22:59 Apr 05, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S967.IS S967 kjohnson on DSK79L0C42 with BILLS 7 •S 967 IS ‘‘(d) DEFINITIONS.—For purposes of this section: 1 ‘‘(1) HEALTH CARE PROVIDER.—The term 2 ‘health care provider’ includes a hospital (as defined 3 in section 1861(e) of the Social Security Act), a crit- 4 ical access hospital (as defined in section 1861(mm) 5 of such Act), a physician (as defined in section 6 1861(r) of such Act), and other providers as deter- 7 mined by the Secretary. 8 ‘‘(2) UNINSURED INDIVIDUAL.—The term ‘un- 9 insured individual’, with respect to an individual re- 10 ceiving a health care service, means an individual 11 who, at the time at which the service was furnished, 12 was not enrolled in a plan that provides medical care 13 benefits, including any Federal health benefit pro- 14 gram, as determined by the Secretary. 15 ‘‘SEC. 2755. REPORTS TO CONGRESS ON NETWORK ADE- 16 QUACY. 17 ‘‘Not later than January 1, 2022, and every year 18 thereafter, the Secretary shall prepare and submit to the 19 Committee on Health, Education, Labor, and Pensions of 20 the Senate and the Committee on Energy and Commerce 21 of the House of Representatives a report on— 22 ‘‘(1) how State network adequacy laws, section 23 2702(c), and any other network adequacy require- 24 ments for qualified health plans under the Patient 25 VerDate Sep 11 2014 22:59 Apr 05, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S967.IS S967 kjohnson on DSK79L0C42 with BILLS 8 •S 967 IS Protection and Affordable Care Act ensure that pro- 1 vider networks are broad enough to meet the needs 2 of enrolled patients; 3 ‘‘(2) the impact of section 2754 on network 4 adequacy; and 5 ‘‘(3) any recommendations for Congress, as 6 necessary, on how to improve network adequacy.’’. 7 (b) EFFECTIVE DATE.—Section 2754 of the Public 8 Health Service Act, as added by subsection (a), shall take 9 effect on January 1, 2021. 10 SEC. 3. GRANTS FOR GROUP MARKET. 11 (a) IN GENERAL.—The Secretary of Health and 12 Human Services shall award grants to States for the pur- 13 pose of studying the potential for imposing limitations on 14 charges for health care services provided to individuals en- 15 rolled in group health plans or group health insurance cov- 16 erage that are similar to the limitations that apply under 17 section 2754 of the Public Health Service Act, as added 18 by section 2. 19 (b) AUTHORIZATION OF APPROPRIATIONS.—There 20 are authorized to be appropriated such sums as may be 21 necessary to carry out this section. 22 (c) DEFINITIONS.—In this section, the terms ‘‘group 23 health plan’’ and ‘‘group health insurance coverage’’ have 24 VerDate Sep 11 2014 22:59 Apr 05, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S967.IS S967 kjohnson on DSK79L0C42 with BILLS 9 •S 967 IS the meanings given such terms in section 2791 of the Pub- 1 lic Health Service Act (42 U.S.C. 300gg–91). 2 Æ VerDate Sep 11 2014 22:59 Apr 05, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6301 E:\BILLS\S967.IS S967 kjohnson on DSK79L0C42 with BILLS