SB 1064: insurers; health providers; claim arbitration

PRIME SPONSOR: Senator Brophy McGee, LD 28

BILL STATUS: Chaptered


Department – Department of Insurance
Amendments – BOLD and Stricken (Committee)


☐ Prop 105 (45 votes)	     ☐ Prop 108 (40 votes)      ☐ Emergency (40 votes)	☐ Fiscal NoteRelating to out-of-network claim disputes.


1.       Clarifies an enrollee may dispute a surprise out-of-network bill by filing a request for arbitration with the Department no later than one year after the date of the service noted in the bill provided certain conditions are met.

a.       Modifies the conditions.

b.       Adds, as a condition for filing, that the enrollee has not instituted a civil lawsuit or other legal action against the insurer or provider relating to the bill. (Sec. 4)

2.       Allows an enrollee's authorized representative to participate in an informal settlement teleconference in lieu of the enrollee. (Sec. 4)

3.       Stipulates if the enrollee or the enrollee's representative fails to attend the informal settlement conference, the conference is terminated and the right to arbitrate the bill is forfeited.

a.       Permits the enrollee who fails to attend the conference to request that Department reschedule the conference within 14 days. (Sec. 4)

4.       Requires the Department, within 15 days after receiving a request for arbitration, to do one of the following:

a.       Determine that the surprise out-of-network bill qualifies for arbitration and notify the parties that the request qualifies;

b.       Determine that the surprise out-of-network bill does not qualify for arbitration and notify the parties that the bill does not qualify; or

c.        Request additional information from the parties to determine whether the surprise out-of-network bill qualifies for arbitration.

i.         The parties must respond within 15 days of the request.

ii.       The Department must determine whether the surprise out-of-network bill qualifies for arbitration and notify the parties within 7 days of receiving additional information.

iii.     Deems the request for arbitration eligible if the insurer, provider, or the provider's billing company fails to respond within 15 days.

iv.     Deems the request for arbitration denied if the enrollee fails to respond within 15 days. (Sec. 5)

5.       Declares the Department's determination of whether the surprise out-of-network bill qualifies for arbitration as final and binding with no right of appeal.

a.       States the Department's determination is solely an administrative remedy and does not bar any private right or cause of action for any enrollee, provider, or other person. (Sec. 5)

6.       Asserts the Department is not a party to and may not participate in the informal settlement teleconference. (Sec. 5)

7.       Directs the insurer to notify the Department of the results of the teleconference.

a.       The insurer must notify the terms of the settlement, if settlement was reached, within 7 days. (Sec. 5)

8.       Requires the Department's notice of arbitration to specify whether one party is responsible for the total cost of the arbitration. (Sec. 5)

9.       Allows the insurer and the provider to mutually agree to use an arbitrator who is not on the Department's list. (Sec. 5)

10.   Clarifies the process for selecting an arbitrator. (Sec. 5)

11.   Specifies arbitration must be conducted telephonically unless otherwise agreed by all parties, rather than in a specified county. (Sec. 5)

12.   Clarifies the use of pricing information that is provided in arbitration. (sec. 5)

13.   Declares all information received by the Department or contracted entity for arbitration is confidential and may not be disclosed. (Sec. 5)

14.   Specifies a claim that is reprocessed as a result of a settlement, arbitration decision, or other action is not in violation of statute relating to timely payment of claims. (Sec. 5)

15.   Requires an insurer and provider to make payment arrangements with the arbitrator for respective costs for arbitration. (Sec. 5)

16.   Exempts self-funded or self-insured employee benefit plans from statutory provisions for out-of-network claim disputes if the plan's regulations are preempted by the Employee Retirement Income Security Act of 1974. (Sec. 2)

17.   Modifies the information that must be disclosed as a condition for a bill to qualify as a surprise out-of-network bill. (Sec. 3)

18.   Permits an enrollee who is aggrieved by an arbitration decision to file a civil action in Superior Court within one year of the disputed decision. (Sec. 6)

19.   Exempts the Department from rule-making requirements for 1 year.

a.       The Department must hold at least one public hearing on the proposed rules. (Sec. 7)

20.   Defines emergency services and health care services. (Sec. 1)

21.   Makes clarifying and conforming changes. (Sec. 1, 2, 3, 5)

22.   Contains a delayed effective date of January 1, 2019. (Sec. 8)

Current Law

Laws 2017, Chapter 190, establishes a process, beginning January 1, 2019, for an enrollee who has received a surprise out-of-network bill to seek a dispute resolution for the disputed amount.  A surprise out-of-network bill is a bill for a health care service, a laboratory service, or durable medical equipment that was provided in a network facility by a health care provider that is not a contracted provider. A bill must meet certain criteria to qualify as a surprise out-of-network bill.  The dispute resolution process consists of an informal settlement teleconference and arbitration. 

The Department is required to develop a simple, fair, efficient, and cost-effective arbitration procedure for surprise out-of-network bill disputes, as well as specify time frames, standards and other details for the arbitration proceeding.  The Department must submit an annual report on the resolution of disputed surprise out-of-network bills.




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Fifty-third Legislature                  SB 1064

Second Regular Session                               Version 4: Chaptered


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