The Health Insurance and Managed Care (B) Committee and Market Regulation and Consumer Affairs (D) Committee met Sept. 24, 2009. During this joint meeting, the Committees held a public hearing on how usual, customary and reasonable (UCR) rates, including the issue of balance billing, are determined and disclosed to consumers. The hearing focused on the following issues: (1) An explanation of what constitutes a UCR charge; (2) An explanation of how insurers use UCR charges; and (3) A discussion of how UCR practices, including balance billing, have affected consumers.

Testimony from America’s Health Insurance Plans (AHIP) recognized that the issue of balance billing often arises for consumers when they voluntarily use an out-of-network service provider and/or when network service providers are not available when treatment is received at an in-network facility, such as a hospital. AHIP’s testimony focused on how UCR is calculated and the need for greater consumer disclosure to help address the issue of balance billing.

Testimony from the American Medical Association (AMA) focused on the following problems: (1) Consumers not receiving the benefit of the higher premiums they are charged for insurance products offering out-of-network coverage; (2) Insufficient payments by health insurers for out-of-network services, which unfairly burdens patients; (3) A lack of clear and comprehensive information regarding contracted networks and out-of-network policies; and (4) Inadequate provider networks to meet the need of enrollees.

Testimony from Ellen Kuhn (Maryland Assistant Attorney General) focused on how balance-billing practices impact consumers and how the average consumer is unable to determine the potential costs associated with receiving care from an out-of-network physician when medical treatment is received at an in-network facility.

Testimony from Bonita A. Kallestad (Mid-Minnesota Legal Assistance) provided an example of how a family with health insurance found out that their newborn child had a rare heat defect and needed surgery shortly after his birth. Even though treatment was provided at an in-network facility, the surgeon was an out-of-network physician. Today, the family owes more than $40,000 to the service provider, on top of the $900 per month they pay for insurance premiums.

Testimony from Kevin Lucia (Georgetown University) provided an overview of how balance-billing practices occur, how often it occurs and state restrictions on balance billing.