In 2020, the Virginia General Assembly passed House Bill 1251 and Senate Bill 172.(*1) The legislation became law on January 1, 2021, and is codified at §§ 38.2-3445.01 through 38.2-3445.07 of the Code of Virginia (Code). It prohibits 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 in-network facility.

Pursuant to subsections A and B of § 38.2-3445.2 of the Code, health carriers offering individual or group health insurance coverage are required to submit certain claims, network, and other information to the Bureau of Insurance (Bureau). The Bureau must notify the Chairs of the House Committee on Labor and Commerce and the Senate Committee on Commerce and Labor of this and other information reported to the Bureau in accordance with subsection C of § 38.2-3445.2 of the Code no later than December 1 of each year. This report (i) presents information on the number of out-of-network claims(*3) paid by health carriers; (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. Based on the Bureau’s analysis of the data provided, the key takeaways include the following:

• Slightly more than one-half of out-of-network emergency services (59.8%), and slightly fewer than one half of out-of-network non-emergency ancillary and surgical services (40.9%) are provided at an in-network facility in Virginia and are fully subject to Virginia’s laws;

• The overwhelming majority (93%) of providers reinstated in the same year in which their contract terminated were reinstated at the same payment level as their previous contract;

• The overwhelming majority (89%) of new network providers rejoined at the same payment level as under 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 271 resolved arbitration decisions:

o 156 (58%) were decided in favor of the health carrier, and
o 115 (42%) were decided in favor of the provider; and

• The percentage of bundled arbitrations increased from 24% in 2021 to 36% in 2022, peaked at 53% in 2023, and then decreased to 34% in 2024, with emergency medicine arbitrations showing the most significant fluctuations throughout this period.
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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 healthcare provider.