RD261 - Balance Billing Arbitration Process – June 2021

Executive Summary:

In 2020, the Virginia General Assembly passed House Bill 1251/Senate Bill 172 (Chapter 1080 and Chapter 1081 of the Virginia Acts of Assembly) codified as § 38.2-3445 through § 38.2-3445.07 of Chapter 34 of Title 38.2 of the Code of Virginia, effective January 1, 2021, to prohibit the balance billing of enrollees by out-of-network health care providers for emergency services or by out-of-network surgical or ancillary service providers at an in-network facility for any amount other than the enrollee’s applicable cost-sharing requirements.

Under the law, if a provider disputes the amount to be paid by the health carrier for services rendered to an enrollee, the provider and the health carrier shall make a good faith effort to reach a resolution on the amount of the reimbursement. If the health carrier and the provider do not agree to a commercially reasonable payment, either party may seek to resolve the dispute by arbitration.

The State Corporation Commission was directed to establish a framework for arbitration of such disputes to include (i) a timeline for the proceedings; (ii) a method for choosing an arbitrator; (iii) establishment of arbitrator fees; (iv) required and optional factors for the arbitrator to consider; (v) non-disclosure agreements; (vi) reporting requirements; and (vii) an appeals process for appeals based on specified abuse of arbitration proceedings . The Commission was authorized to adopt rules and regulations governing the arbitration process.

In 2020, the Commission promulgated its Rules Governing Balance Billing for Out-of-Network Health Care Services (14VAC5-405-10 et seq.) The Rules, also effective January 1, 2021, apply to all health benefit and managed care plans issued and delivered in this Commonwealth except as provided for in § 38.2-3445.06 of the Code of Virginia.

The Commission was also directed to prepare an annual report summarizing the dispute resolution information provided by arbitrators to be posted on its website and submitted to the Chairs of the House Committee on Labor and Commerce and Committee on Appropriations and the Senate Committee on Commerce and Labor and Committee on Finance and Appropriations annually by July 1.

For this first annual report, the Commission gathered data through May 31, 2021 on the arbitration process for billing disputes between out-of-network health care providers and health carriers:

• The first request eligible for balance billing arbitration was accepted on March 10, 2021.

• A total of 120 arbitration requests were received through May 31, 2021, of which 102 requests were accepted as eligible.

• Of the three arbitration decisions rendered by arbitrators during the reporting period, one arbitration was decided in favor of the health carrier, and two arbitrations were decided in favor of the provider.