On October 22, 2020, Michigan’s Governor Gretchen Whitmer signed the Surprise Medical Billing legislation, also known as the Surprise Billing Law. The legislation comprises of four bills (HB: 4459, 4460, 4990, and 4991) that collectively provide balance billing protections for patients.

The surprise billing law is to protect patients from surprise medical bills. A surprise medical bill is when a patient receives medical services from an out-of-network provider and receives a statement beyond an in-network amount. This is known as a surprise medical bill. It is not uncommon for a patient to receive medical services at an in-network hospital or ambulatory surgical center (ASC), and the anesthesiologist or radiologist is out-of-network. In such circumstances, the provider bills the patient for any portion not paid for by the insurance company – this is a classic surprise medical bill.

What insurance plans does the state law apply to?

Not all insurances are within reach of the Michigan Surprise Billing Law. Michigan’s law applies to health benefit plans subject to the state’s insurance regulations, including self-funded plans established or maintained by the state or local government for its employees.

What is the impact on Michigan providers?

The impact is significant if the Surprise Billing law is not carefully understood.  The law does not force out-of-network providers to become in-network.  If a physician chooses to remain out-of-network, they can and still balance bill the patient under certain circumstances in compliance with the law.

Balance Billing Prohibitions:  An out-of-network provider is prohibited from balance billing services provided to an emergency patient at an in-network or out-of-network facility.

Timely Filing Limitations:  Claims must be filed within 60 days after the date of service.

Payment by Payer:  A payer must pay the provider within 60 days of receiving the claim.

Reimbursement:  Claims that are subject to the Public Acts surprise billing protections must be paid by the payer at the greater of (1) the median amount negotiated by the patient’s carrier for the region and provider specialty, excluding any in-network coinsurance, copayments, or deductibles or (2)  150% of the Medicare fee for service fee schedule for the health care service provided, excluding any in-network coinsurance, copayments, or deductibles.

A provider may receive an additional 25% reimbursement who provides a health care service involving a complicating factor to an emergency patient.  Specific information must be submitted with the claim to demonstrate a complicating factor.

Disclosure – Notice and Consent:  A nonparticipating provider who provides care to a nonemergency patient must give a proper notice and obtain a consent to preserve their rights to balance bill the patient.  The disclosure must be issued at least 14 days before providing services or as soon as possible if services are scheduled less than 14 days in advance.

Prohibition of Disclosure: A disclosure cannot be issued to an emergency patient at the time of admittance to a hospital or when preparing the non-emergency patient for surgery or another medical procedure.

Disclosure Retention:  A signed disclosure must be retained by the provider for a minimum of 7 years.

What are the appeal rights if a provider disagrees with the payment amount?

There are no appeals rights. If a provider believes the health plan (carrier) incorrectly calculated the median negotiated amount, the provider may request a recalculation review with the Department of Insurance and Financial Services (DIFS).  The form a provider must complete to request a recalculation can be found here.

When is arbitration available?

Arbitration is available only if the payer denies a claim seeking the additional 25% reimbursement on services provided to an emergency patient involving a complicating factor.  The nonparticipating provider may file a written request for binding arbitration with DIFS on the Request for Binding Arbitration form.

Michigan surprise billing

Contact Us to Understand How to Navigate the Surprise Billing Law

Rivet Health Law has been helping physicians understand the Michigan Surprise Billing Law since it was enacted, including the Federal No Surprise Act.  There are several factors to consider under both state and federal law.

We can assist with practice education, arbitration, negotiating claims, drafting policies, and notice and consents.