Michigan Passes Out-Of-Network Legislation with Pathologist Support

The Michigan Society of Pathologists (MSP) and the CAP worked together to support out-of-network billing legislation, (HB 4459) and (HB 4460), which passed the Michigan Legislature on October 13. The legislation protects patients from balance billing while providing an out-of-network payment methodology that is the greater of 150% of Medicare, or the median in-network rate. Both the MSP and the CAP worked with the Michigan State Medical Society’s physician coalition to advocate for critical changes to the bill. Michigan Governor Gretchen Whitmer is expected to sign both bills into law soon.

Both the MSP and the CAP were engaged through the entire course of the legislative process. In the final stages of the process, health plans urged the state legislature to allow them to divert payment for out-of-network services to the patient who would then have to be billed by providers. Because of grassroots support of Michigan pathologists and testimony from the MSP, the group countered that such a payment diversion would compel providers to collect additional payments from enrollees beyond co-insurance, deductibles, and co-payments. The provision was ultimately removed by a Senate amendment that requires health plans to directly pay out-of-network providers, as is the case with other state out-of-network laws.

Early in the process, the MSP and CAP successfully urged that the Medicare minimum out-of-network payment safeguard be raised from 125% of Medicare to 150% of Medicare. Both groups also asked to remove the initial legislation’s obligation on pathologists and other physicians to provide a written estimate of services before the service’s performance. The final bill clarified that the written estimate is only applicable when the service is scheduled in advance or involves direct patient interaction.

While the final bill does not contain an arbitration mechanism for non-emergency services or health plan network adequacy advocated by pathology, both the MSP and the CAP are pleased with both bills’ outcome. However, both groups still see the need and opportunity for additional legislative work on outstanding issues next year.