Bill description: HB 387 overrides and makes unenforceable elements of insurance contracts that allow providers to bill for out-of-network services.
Does it give government any new, additional, or expanded power to prohibit, restrict, or regulate activities in the free market? Conversely, does it eliminate or reduce government intervention in the market?
HB 387 creates a new chapter of Idaho Code called the "No Surprises Act" that attempts to prohibit health care providers from charging higher rates for out-of-network services. The language explicitly states that "a provider shall not bill or seek reimbursement for services rendered" for amounts that exceed those stipulated by the new law.
Does it increase barriers to entry into the market? Examples include occupational licensure, the minimum wage, and restrictions on home businesses. Conversely, does it remove barriers to entry into the market?
HB 387 has the potential to shut down independent providers (who may operate outside of an insurance provider's network) by prohibiting them from setting their rates based on market conditions. Furthermore, HB 387 may end up encouraging medical providers to consolidate under large corporate umbrellas. Prohibitions and billing restrictions such as those imposed by HB 387 distort the market and can lead to monopolies and oligopolies.
Does it violate the spirit or the letter of either the U.S. Constitution or the Idaho Constitution? Examples include restrictions on speech, public assembly, the press, privacy, private property, or firearms. Conversely, does it restore or uphold the protections guaranteed in the U.S. Constitution or the Idaho Constitution?
HB 387 is nearly identical to another bill introduced this year, HB 341, but with one additional subsection. Both bills explicitly violate the freedom of contract by stating that "any provision in a consent form or other agreement that purports to permit a provider to bill or seek reimbursement for amounts in excess of the amounts permitted under this chapter is void and unenforceable."
HB 387 contains an exception that HB 341 does not. The exception allows a patient to "agree in writing to accept services at a contracted facility from a provider who is not a contracted provider." If this exception were left alone, it would largely negate the issue, but unfortunately, there are exceptions to the exception. For example, the exception would apply only to non-emergency medical services, and it would require that the patient and provider enter into the agreement seven days (or more) before the service is given. It also requires that the agreement be specific about the services to be rendered and the price to be paid for the services.
There are several problems here, the most fundamental of which is that by disallowing the enforcement of voluntary contracts, HB 387 violates a fundamental right and attempts to substitute government force and central planning for the spontaneous order of the free market. There is a more specific problem, however. The exceptions to the exception prevent a patient from agreeing (either before or during an emergency) to receive the best care from the best provider rather than whatever care is available from the providers in a given insurance network.
We live in a state and a nation that generally honor advance directives about life-saving services because we want to honor the wishes of individuals regarding their medical care and wellbeing. HB 387, however, prevents someone from demanding or agreeing to receive the best care from the best providers if they happen to be out-of-network providers. Because such a directive would be for emergency services and not specific about the services to be rendered or the price to be paid, it would be considered invalid and unenforceable, and the patient would be sent to an in-network provider instead.
HB 387 is presented as a bill to prevent surprise medical billing, but it goes far beyond limiting surprises. It actively blocks patients from prioritizing quality of care over cost of care, even when that decision is calculated and intentional.
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