II 

116TH CONGRESS 

1ST SESSION S. 967 

To amend the Public Health Service Act to establish limitations on costsharing 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 limitations on cost-sharing for out-of-network services in the 

individual market, to prohibit balance billing for such 

services, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Reducing Costs for 

5 Out-of-Network Services Act of 2019’’. 


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1 SEC. 2. LIMITATIONS ON COST-SHARING FOR OUT-OF-NET2 WORK SERVICES. 

3 (a) IN GENERAL.—Subpart 2 of part B of title 

4 XXVII of the Public Health Service Act (42 U.S.C. 

5 300gg–51 et seq.) is amended by adding at the end the 

6 following: 

7 ‘‘SEC. 2754. LIMITATIONS ON COST-SHARING FOR OUT-OF8 NETWORK SERVICES. 

9 ‘‘(a) HEALTH INSURANCE ISSUER REQUIREMENT.— 

10 A health insurance issuer offering health insurance cov11 erage, in the individual market in a State, that offers ben12 efits with respect to a health care service provided in the 

13 State by a participating provider shall ensure that the 

14 cost-sharing requirement with respect to such service pro15 vided in the State by a nonparticipating provider does not 

16 exceed the rate selected by the applicable State authority 

17 under subsection (c)(1) for such service. 

18 ‘‘(b) LIMITATION ON CHARGES BY HEALTH CARE

19 PROVIDERS.— 

20 ‘‘(1) IN GENERAL.—A health care provider may 

21 not charge a patient for a health care service at a 

22 rate in excess of the following: 

23 ‘‘(A) In the case of a patient who is en24 rolled in health insurance coverage in the indi25 vidual market that does not provide out-of-net26 work benefits for such service, the health care 


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1 provider may charge such patient no more than 

2 the rate selected by the applicable State author3 ity under subsection (c)(1). 

4 ‘‘(B) In the case of a patient enrolled in 

5 health insurance coverage in the individual mar6 ket that provides out-of-network benefits for 

7 such service, the health care provider may 

8 charge such patient no more than— 

9 ‘‘(i) the rate selected by the applicable 

10 State authority under subsection (c)(1); 

11 minus 

12 ‘‘(ii) the sum of— 

13 ‘‘(I) the payment made by the 

14 health insurance issuer to the health 

15 care provider pursuant to such cov16 erage; and 

17 ‘‘(II) the out-of-network cost18 sharing amount required under such 

19 coverage. 

20 ‘‘(C) In the case of an uninsured indi21 vidual, the health care provider may charge 

22 such patient no more than the lower of— 

23 ‘‘(i) the rate selected by the applicable 

24 State authority under subsection (c)(2); or 


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1 ‘‘(ii) the rate otherwise allowed to be 

2 charged to such an individual for such a 

3 service under an applicable law in the 

4 State. 

5 ‘‘(2) ENFORCEMENT.—A health care provider 

6 that violates the requirement under paragraph (1) 

7 shall be subject to the same civil monetary penalties 

8 described in paragraph (1) of section 922(f), includ9 ing the provisions described in paragraph (2) of such 

10 section, as a person who commits a violation de11 scribed in paragraph (1) of such section. 

12 ‘‘(c) RATE.— 

13 ‘‘(1) INDIVIDUALS ENROLLED IN HEALTH IN14 SURANCE COVERAGE.—An applicable State authority 

15 shall select for the State as applicable for purposes 

16 of subsection (a) and subparagraphs (A) and (B) of 

17 subsection (b)(1) one of the following as a maximum 

18 rate for a health care service for individuals enrolled 

19 in health insurance coverage in the individual mar20 ket in the State: 

21 ‘‘(A) 125 percent (or, in a case described 

22 in paragraph (3) and at the discretion of the 

23 applicable State authority, 200 percent) of the 

24 allowed charges determined for the item or 

25 service under the original Medicare fee-for-servVerDate Sep 11 2014 22:59 Apr 05, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S967.IS S967

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1 ice program under parts A and B of title XVIII 

2 of the Social Security Act. 

3 ‘‘(B) The 80th percentile of usual, cus4 tomary, and reasonable charge rates for the 

5 service for the geographic area, as determined 

6 by a database of usual, customary, and reason7 able charges selected by the applicable State au8 thority and approved as appropriate by the Sec9 retary. 

10 ‘‘(C) 100 percent of the allowed charges 

11 for the service if the service were provided by 

12 a participating provider, which shall be deter13 mined based upon the average actual allowed 

14 rate under the coverage for all participating 

15 providers for such service in the health insur16 ance issuer’s participating provider network. 

17 ‘‘(2) UNINSURED INDIVIDUALS.—An applicable 

18 State authority shall select for the State as applica19 ble for purposes of subsection (b)(1)(C) one of the 

20 following as a maximum rate for a health care serv21 ice for uninsured individuals: 

22 ‘‘(A) The rate described in subparagraph 

23 (A) of paragraph (1). 

24 ‘‘(B) The rate described in subparagraph 

25 (B) of paragraph (1). 


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1 ‘‘(3) SERVICES PROVIDED IN RURAL AREAS.— 

2 A case described in this paragraph is a case in which 

3 the item or service is furnished by a provider of 

4 services (as defined in subsection (u) of section 1861 

5 of the Social Security Act) or supplier (as defined in 

6 subsection (d) of such section) in a rural area (as 

7 defined in section 1886(d)(2)(D) of such Act). 

8 ‘‘(4) DEFAULT RATE.—In the case in which an 

9 applicable State authority does not select a rate 

10 under paragraph (1) or (2) for a service, the max11 imum rate applicable in the State for the service for 

12 purposes of subsections (a) and (b) shall— 

13 ‘‘(A) be the rate described in subparagraph 

14 (A) of paragraph (1), if the service is covered 

15 under the original Medicare fee-for-service pro16 gram under parts A and B of title XVIII of the 

17 Social Security Act; or 

18 ‘‘(B) be a rate established by the Sec19 retary, if the service is not covered under such 

20 program. 

21 ‘‘(5) CLARIFICATION.—In selecting a rate under 

22 paragraph (1) or (2) for a health care service, the 

23 applicable State may select a rate that differs from 

24 the rate selected under such paragraph for a dif25 ferent health care service. 


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1 ‘‘(d) DEFINITIONS.—For purposes of this section: 

2 ‘‘(1) HEALTH CARE PROVIDER.—The term 

3 ‘health care provider’ includes a hospital (as defined 

4 in section 1861(e) of the Social Security Act), a crit5 ical access hospital (as defined in section 1861(mm) 

6 of such Act), a physician (as defined in section 

7 1861(r) of such Act), and other providers as deter8 mined by the Secretary. 

9 ‘‘(2) UNINSURED INDIVIDUAL.—The term ‘un10 insured individual’, with respect to an individual re11 ceiving a health care service, means an individual 

12 who, at the time at which the service was furnished, 

13 was not enrolled in a plan that provides medical care 

14 benefits, including any Federal health benefit pro15 gram, as determined by the Secretary. 

16 ‘‘SEC. 2755. REPORTS TO CONGRESS ON NETWORK ADE17 QUACY. 

18 ‘‘Not later than January 1, 2022, and every year 

19 thereafter, the Secretary shall prepare and submit to the 

20 Committee on Health, Education, Labor, and Pensions of 

21 the Senate and the Committee on Energy and Commerce 

22 of the House of Representatives a report on— 

23 ‘‘(1) how State network adequacy laws, section 

24 2702(c), and any other network adequacy require25 ments for qualified health plans under the Patient 


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1 Protection and Affordable Care Act ensure that pro2 vider networks are broad enough to meet the needs 

3 of enrolled patients; 

4 ‘‘(2) the impact of section 2754 on network 

5 adequacy; and 

6 ‘‘(3) any recommendations for Congress, as 

7 necessary, on how to improve network adequacy.’’. 

8 (b) EFFECTIVE DATE.—Section 2754 of the Public 

9 Health Service Act, as added by subsection (a), shall take 

10 effect on January 1, 2021. 

11 SEC. 3. GRANTS FOR GROUP MARKET. 

12 (a) IN GENERAL.—The Secretary of Health and 

13 Human Services shall award grants to States for the pur14 pose of studying the potential for imposing limitations on 

15 charges for health care services provided to individuals en16 rolled in group health plans or group health insurance cov17 erage that are similar to the limitations that apply under 

18 section 2754 of the Public Health Service Act, as added 

19 by section 2. 

20 (b) AUTHORIZATION OF APPROPRIATIONS.—There 

21 are authorized to be appropriated such sums as may be 

22 necessary to carry out this section. 

23 (c) DEFINITIONS.—In this section, the terms ‘‘group 

24 health plan’’ and ‘‘group health insurance coverage’’ have 


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1 the meanings given such terms in section 2791 of the Pub2 lic Health Service Act (42 U.S.C. 300gg–91). 

Æ 


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