In 2020, the Virginia General Assembly passed House Bill 1251 and Senate Bill 172.(*1) The legislation prohibited out-of-network health care providers from charging enrollees for any amount other than the enrollee’s applicable cost-sharing requirements for emergency services, and for surgical or ancillary services performed at an in-network facility. The prohibition on this matter, referred to as balance billing, became law on January 1, 2021, and is codified at § 38.2-3445.01, Code of Virginia (Code).

Section 38.2-3445.2 C of the Code directs the State Corporation Commission (Commission) to submit an annual report by December 1 of each year. Prepared by the Bureau of Insurance (Bureau), this report:

(i) presents information reported to the Bureau by health insurance carriers (health carriers) on the number of out-of-network claims(*2) paid;

(ii) studies changes in provider participation in health carrier networks and variances in payment levels if providers are reinstated following termination;

(iii) assesses the potential impact of these changes in participation or payment levels for emergency services on premiums; and

(iv)presents an update on the number and type of claims resolved by arbitration from November 1, 2021 through October 31, 2022, including any difference between the initial payment and final settled amounts.

The Bureau makes the following observations and comparisons in this report:

• About half (46.3%) of out-of-network emergency services and less than half (40.7%) of out-of-network non-emergency ancillary and surgical services are provided at an innetwork facility in Virginia and are fully subject to Virginia’s laws;

• Emergency services claim counts for in-state, out-of-network claims (eligible for arbitration) increased 7% from Calendar Year (CY) 2020 to Fiscal Year (FY) 2022 (July 1, 2021 through June 30, 2022);

• A large majority (78%) of providers reinstated in the same year in which their contract terminated were reinstated at the same payment level as their previous contract;

• Nearly every (94%) provider new to a network rejoined at the same payment level as their previous contract;

• Given the minimal number of out-of-network emergency claims compared to total claims, premiums should not be materially impacted by changes to network participation and payment levels for emergency services;

• There have been 810 decisions since inception of the arbitration process (January 1, 2021 through October 31, 2022):

o 509 arbitrations (63%) in favor of the health carrier, and
o 301 arbitrations (37%) in favor of the provider;

• Of the 264 arbitration decisions resolved during this report period (November 1, 2021 through October 31, 2022):

o 153 arbitrations (58%) were decided in favor of the health carrier, and
o 111 arbitrations (42%) in favor of the provider; and

• The percentage of bundled arbitrations increased from 24% to 36%, with the most notable increase occurring in emergency medicine arbitrations.
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(*1) Chapters 1080 and 1081, respectively, Virginia Acts of Assembly – 2020 Session.
(*2) A claim is a request for payment submitted to the insurance carrier for services performed by the health care provider.