By: Karina Gonzalez

Earlier this year, the Florida legislature passed prohibitions against balance billing by out-of-network providers for emergency services and where the patient goes to a contracted facility but does not have an opportunity to choose a provider such as emergency room physicians, pathologists, anesthesiologists and radiologists.

Specific reimbursement requirements went into effect on October 1, 2016 for certain out-of-network providers of emergency and non-emergency services, where a patient has no opportunity to choose the provider.

Under these circumstances, an Insurer must pay the greater amount of either:

(a)         The amount negotiated   with an in-network provider   in the same community where services were performed;

(b)        The usual and customary rate received by a provider for the same service in the community where service was provided; or

(c)         The Medicare rate for the service.

On October 1, 2016, revisions were made for reimbursement of  emergency services by HMOs to out-of-network providers.  Fla. Stat 641. 513 (5).

The so called “payment formula” for HMO reimbursement of out-of-network emergency services providers now reads that payment shall be the greater (had been the lessor) of:

(a) The Medicare allowable rate (had been provider’s charges);

(b) The usual and customary reimbursement received by a provider for the same service in the community where the services was provided (had been the usual and customary provider charges for similar services); or

(c) The amount negotiated with a provider under contract   with an HMO in the same community were services were provided, excluding any copayments payable by the patient. (Had been charge mutually agreed on within 60 days of submittal of claim).

Insurers will now reimburse out-of-network exclusive providers  essentially under the same payment formula used for emergency care or at an in-network rate.   These out-of-network providers are also prohibited from balance billing patients and can only collect co-payments, co-insurance and deductibles.

So if the Medicare rate is greater than the usual and customary rate that is what will be paid.  Usual and customary rates are those payments  received by the provider, which means a provider needs to track reimbursement rates and presumably the average of all receipts for the particular service in the same community and that will be the usual and customary rate under those circumstances. It is an increasing trend for the Medicare rate to be used by both HMOs and Commercial Insurers as the bench mark.