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 balance billing(*2) 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 innetwork facility. The legislation became law on January 1, 2021, and is codified at § 38.2-3445.01 of the Code of Virginia (Code).

Section 38.2-3445.2 C of the Code directs the State Corporation Commission (Commission) to submit a report annually by December 1 that: (i) presents information reported to the Bureau by health insurance carriers (health carriers) on the number of out-of-network claims(*3) 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, including any difference between the initial payment and final settled amounts. On behalf of the Commission, the Bureau makes the following findings:

• About one-half of out-of-network emergency services (52.3%) and out-of-network non-emergency ancillary and surgical services (40.4%) 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 60% from Calendar Year (CY) 2020 to Fiscal Year (FY) 2023;

• A large majority (72%) of providers reinstated in the same year in which their contract terminated were reinstated at the same payment level as their previous contract;

• All new network providers 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;

• In similar percentages to the prior period, of the 256 resolved arbitration decisions:

o 159 arbitrations (62%) were decided in favor of the health carrier, and
o 97 arbitrations (38%) in favor of the provider; and

• The percentage of bundled arbitrations increased from 24% in 2021, to 53% in 2023, 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) Balance billing occurs when a healthcare provider bills a patient for the difference between the provider's charge and the allowed amount under the patient's insurance plan. This typically happens when a patient receives care from an out-of-network provider, and the insurer covers only a portion of the bill.
(*3) A claim is a request for payment submitted to the insurance carrier for services performed by the health care provider.