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Health Care Law Alerts

Health Care Alert: Medical Billing

12.21.11
Written by: Moses Suarez

Earlier this year, Illinois Governor Pat Quinn signed into law House Bill 5085, which amends the Illinois Insurance Code. It prohibits specific health care providers from billing patients the difference between the amount billed and amount paid by insurance providers, a procedure known as “balance billing.” Instead, this bill provides that when a nonparticipating facility-based provider (NFP) seeks the balance due, the insurer or NFP may initiate binding arbitration to negotiate a payment. The NFPs affected include radiology, anesthesiology, pathology, neonatology, and emergency department services. HB 5085 is designed to limit patients’ exposure to uncovered medical expenses beyond their insurance co-payment or deductible when out-of-network services are provided within an in-network hospital, but not available by an in-network provider. This scenario generally occurs when specialized services are provided at an in-network hospital by contracted providers. In a challenge in federal court soon after taking effect on June 1, 2011, a federal judge upheld its constitutionality as “rationally related” to a legitimate state interest.

This act was intended to address a practice known as “balance billing” by out-of-network providers. Under this practice, insured patients who chose an in-network physician at an in-network hospital received bills from out-of network providers of ancillary medical services, even though ancillary providers were not specifically selected by the patients. The act does not apply to services provided outside a participating network hospital or ambulatory surgery center. 215 ILCS 5/356z.3a(b).

Opponents to HB 5085 argue that the law gives insurance companies an unfair advantage and allows them to apply larger discounts than they would be able to negotiate. Moreover, they argue that arbitration is too expensive and time consuming. Given that HB 5085 is in its infancy, the ultimate impact remains to be seen until rules and regulations are promulgated by the Illinois Department of Insurance. Therefore, health care providers should consider the implications of arbitration and the prohibition of balance billing before participating in a network.

More recently, the Illinois General Assembly passed Senate Bill 1694, which creates a procedure and statutory form to allow family members to obtain medical records of deceased family members without having to open an estate. This act amends the Illinois Health Care Power of Attorney Act to allow an agent to access the principal’s medical records after the principal’s death if the principal delegated that authority in the power of attorney. The act, which became effective November 23, 2011, permits a surviving spouse, the deceased’s adult offspring, parent, or adult sibling to request a copy of the deceased’s records if:

An executor or administrator has not been appointed for the deceased’s estate; or
The deceased did not appoint a health care power of attorney who was authorized to act for the deceased after death, and the deceased did not object to disclosure in writing.

While a deceased’s family member could obtain medical records prior to SB 1694, under the amendment, family members will be able to obtain them easier, without having to open an estate. The result means that health care providers will face new challenges in protecting patient privacy. Under SB 1694, the decedent’s spouse or family member must only sign an “Authorized Relative Certification” in order to obtain the records, but there are no statutory procedures for ensuring the certification is accurate and authentic. Therefore, records custodians must simply rely upon the assertions of a requestor, which, if fraudulent, could potentially lead to breaches of privacy and litigation.