State Implements Regulations to Avert Surprise Billing for Health Services

The Michigan Department of Insurance and Financial Services (DIFS) has implemented new regulations following the enactment of surprise billing legislation in 2020. MHA advocacy efforts resulted in significant changes to the legislation before it became law. As passed, Michigan’s surprise billing law generally exempts direct hospital employees from its requirements through its definition of a healthcare provider. In the context of the surprise billing statute, “provider” means an individual who is licensed or authorized as a health professional under article 15 of the Michigan Public Health Code and does not mean a hospital or other health facility. However, hospitals and health systems should be aware of the new regulations and who must comply with them.

The DIFS regulations and the Michigan statute require healthcare providers to inform consumers of the possibility of surprise billing through a disclosure form sent at least 14 days before a scheduled medical service. The form must explain that the consumer’s insurance company may not cover the entire cost or all services and that the patient would be personally responsible for any uncovered costs. As part of the notice, patients must also be given a good faith estimate of the total cost of the care they will receive, enabling them to budget for these expenses in advance or choose alternative care. The law applies to most health plans.

In addition to establishing disclosure requirements, the new law states that payment for out-of-network emergency services must be negotiated between the provider and the patient’s insurance company, not with the patient directly. Beginning July 1, certain payment disagreements between out-of-network providers and insurers may go to binding arbitration under the law.

DIFS has established a webpage specific to surprise medical billing that hospitals should reference for additional information.

The MHA is also monitoring federal rulemaking on surprise billing and will keep members informed when those requirements, which are expected to be similar to the state requirements, are scheduled to go into effect.

Members with questions should contact Adam Carlson at the MHA.