Bill description: HB 506 overrides and makes unenforceable parts 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 506 creates a new chapter of Idaho Code called the "No Surprises Act," which attempts to prohibit health care providers from charging higher rates for out-of-network services. The language explicitly states that an "out of network provider shall not bill or seek reimbursement for amounts in excess of the allowed amount" under the new government regulations.
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 506 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 506 may end up encouraging medical providers to consolidate under large corporate umbrellas. Prohibitions and billing restrictions such as those imposed by HB 506 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 506 violates the freedom of providers by imposing significant limitations on contracts that allow patients to choose out-of-network providers for non-emergency services. It also limits contracts by banning patients from choosing out-of-network providers for emergency services.
Among the limitations placed on contracts allowing patients to choose out-of-network providers for non-emergency services is requiring "a good faith best estimate of the amount the provider will charge for the services." Another limitation is the requirement that the contract be signed "no less than 5 calendar days before the provision of services." Additionally, all such agreements are required to expire "after completion of the imminent health care service for which the agreement is sought."
There are several problems here, the most fundamental of which is that by disallowing the enforcement of certain voluntary contracts, HB 506 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 limitations imposed on voluntary contracts 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 well-being. HB 506, 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 506 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.