Reducing Costs for Out-of-Network Services Act of 2019

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. Short title This Act may be cited as the Reducing Costs for Out-of-Network Services Act of 2019 2. Limitations on cost-sharing for out-of-network services (a) In general Subpart 2 of part B of title XXVII of the Public Health Service Act ( 42 U.S.C. 300gg–51 2754. Limitations on cost-sharing for out-of-network services (a) Health insurance issuer requirement A health insurance issuer offering health insurance coverage, in the individual market in a State, that offers benefits with respect to a health care service provided in the State by a participating provider shall ensure that the cost-sharing requirement with respect to such service provided in the State by a nonparticipating provider does not exceed the rate selected by the applicable State authority under subsection (c)(1) for such service. (b) Limitation on charges by health care providers (1) In general A health care provider may not charge a patient for a health care service at a rate in excess of the following: (A) In the case of a patient who is enrolled in health insurance coverage in the individual market that does not provide out-of-network benefits for such service, the health care provider may charge such patient no more than the rate selected by the applicable State authority under subsection (c)(1). (B) In the case of a patient enrolled in health insurance coverage in the individual market that provides out-of-network benefits for such service, the health care provider may charge such patient no more than— (i) the rate selected by the applicable State authority under subsection (c)(1); minus (ii) the sum of— (I) the payment made by the health insurance issuer to the health care provider pursuant to such coverage; and (II) the out-of-network cost-sharing amount required under such coverage. (C) In the case of an uninsured individual, the health care provider may charge such patient no more than the lower of— (i) the rate selected by the applicable State authority under subsection (c)(2); or (ii) the rate otherwise allowed to be charged to such an individual for such a service under an applicable law in the State. (2) Enforcement A health care provider that violates the requirement under paragraph (1) shall be subject to the same civil monetary penalties described in paragraph (1) of section 922(f), including the provisions described in paragraph (2) of such section, as a person who commits a violation described in paragraph (1) of such section. (c) Rate (1) Individuals enrolled in health insurance coverage An applicable State authority shall select for the State as applicable for purposes of subsection (a) and subparagraphs (A) and (B) of subsection (b)(1) one of the following as a maximum rate for a health care service for individuals enrolled in health insurance coverage in the individual market in the State: (A) 125 percent (or, in a case described in paragraph (3) and at the discretion of the applicable State authority, 200 percent) of the allowed charges determined for the item or service under the original Medicare fee-for-service program under parts A and B of title XVIII of the Social Security Act. (B) The 80th percentile of usual, customary, and reasonable charge rates for the service for the geographic area, as determined by a database of usual, customary, and reasonable charges selected by the applicable State authority and approved as appropriate by the Secretary. (C) 100 percent of the allowed charges for the service if the service were provided by a participating provider, which shall be determined based upon the average actual allowed rate under the coverage for all participating providers for such service in the health insurance issuer’s participating provider network. (2) Uninsured individuals An applicable State authority shall select for the State as applicable for purposes of subsection (b)(1)(C) one of the following as a maximum rate for a health care service for uninsured individuals: (A) The rate described in subparagraph (A) of paragraph (1). (B) The rate described in subparagraph (B) of paragraph (1). (3) Services provided in rural areas A case described in this paragraph is a case in which the item or service is furnished by a provider of services (as defined in subsection (u) of section 1861 of the Social Security Act) or supplier (as defined in subsection (d) of such section) in a rural area (as defined in section 1886(d)(2)(D) of such Act). (4) Default rate In the case in which an applicable State authority does not select a rate under paragraph (1) or (2) for a service, the maximum rate applicable in the State for the service for purposes of subsections (a) and (b) shall— (A) be the rate described in subparagraph (A) of paragraph (1), if the service is covered under the original Medicare fee-for-service program under parts A and B of title XVIII of the Social Security Act; or (B) be a rate established by the Secretary, if the service is not covered under such program. (5) Clarification In selecting a rate under paragraph (1) or (2) for a health care service, the applicable State may select a rate that differs from the rate selected under such paragraph for a different health care service. (d) Definitions For purposes of this section: (1) Health care provider The term health care provider (2) Uninsured individual The term uninsured individual 2755. Reports to Congress on network adequacy Not later than January 1, 2022, and every year thereafter, the Secretary shall prepare and submit to the Committee on Health, Education, Labor, and Pensions of the Senate and the Committee on Energy and Commerce of the House of Representatives a report on— (1) how State network adequacy laws, section 2702(c), and any other network adequacy requirements for qualified health plans under the Patient Protection and Affordable Care Act ensure that provider networks are broad enough to meet the needs of enrolled patients; (2) the impact of section 2754 on network adequacy; and (3) any recommendations for Congress, as necessary, on how to improve network adequacy. . (b) Effective date Section 2754 of the Public Health Service Act, as added by subsection (a), shall take effect on January 1, 2021. 3. Grants for group market (a) In general The Secretary of Health and Human Services shall award grants to States for the purpose of studying the potential for imposing limitations on charges for health care services provided to individuals enrolled in group health plans or group health insurance coverage that are similar to the limitations that apply under section 2754 of the Public Health Service Act, as added by section 2. (b) Authorization of appropriations There are authorized to be appropriated such sums as may be necessary to carry out this section. (c) Definitions In this section, the terms group health plan group health insurance coverage 42 U.S.C. 300gg–91

Summary: Reducing Costs for Out-of-Network Services Act of 2019 This bill places limits on the cost to insurance plan holders for out-of-network health care services and on the amount charged for services provided to uninsured individuals. First, each state must select one of the following formulas for determining the maximum cost for a service: 125% of fee-for-service rate under Medicare, the 80th percentile of the cost for such service in the geographic area, or 100% of the allowed charges if the service had been provided in network. Health insurance issuers must set the cost-sharing amount for out-of-network services at no more than the state-selected rate for such service. Further, out-of-network health care providers may charge plan holders no more than the state-selected rate for a service. Each state also must set the maximum rate for services that health care providers may charge uninsured individuals at the lower of (1) 125% of the fee-for-service rate under Medicare, (2) the 80th percentile of the cost for such service in the geographic area, or (3) the rate otherwise applicable under state law. If a state does not select a maximum rate for a service provided to an insured or uninsured individual, the maximum rate a provider may charge is (1) 125% of the fee-for-service rate under Medicare, or (2) the rate established by the Department of Health and Human Services if such service is not covered under Medicare.