Michigan Governor Signs Harmful Balance Billing Legislation

On October 22, 2020, Michigan Governor Gretchen Whitmer signed into law two unfavorable measures addressing surprise medical billing, House Bill 4459 and House Bill 4460, both of which prohibit balance billing a patient beyond the patient’s in-network cost-sharing obligations. Due to unfavorable out of network payment language found in the measures and the absence of a fair and efficient dispute resolution process, the American Society of Anesthesiologists (ASA) and the Michigan Society of Anesthesiologists (MSA) opposed both bills. Although negotiation attempts were made, the medical community in Michigan was unable to unhinge insurer lobbying groups’ efforts to enact both bills. 

The new laws, which became effective on October 22, 2020, each amend different sections of Michigan law and include rate setting provisions that benchmark payments at the greater of 150% of Medicare or the median in-network rate negotiated by the carrier based on region and specialty. The payment provisions included in the laws give carriers too much power over determining out of network rates, and the use of the already low Medicare rates as a benchmark for reimbursement will undoubtably have a negative financial effect on both private practice and hospital employed anesthesiologists. ASA and MSA strongly oppose the measures’ payment provisions which will result in lower payments for out of network services – at a time when physician anesthesiologists are already faced with increased financial challenges due to the ongoing pandemic.

The avenue for arbitration found in H 4459 is narrow and requires physicians to meet several burdensome requirements in order prove the occurrence of a “complicating factor” to receive increases in payment for emergency services. In cases when a carrier makes a determination that a complicating factor did not occur, non-participating providers must file a written request for binding arbitration along with extensive documentation to the Michigan Department of Insurance and Financial Services to handle the dispute. While H 4460 does not include arbitration provisions, both bills were ultimately signed into law as a result of bi-partisan compromise negotiations.

Due to the payment provisions, ASA believes the measures are unnecessarily challenging for physicians and threaten to fundamentally disrupt health care delivery. ASA will continue to advocate for fair solutions which put patients first by holding them harmless, while simultaneously balancing the interests of insurance companies and providers.