SF3993

Purpose

• To require health plan companies to credit enrollees who receive health care services from out-of-network providers when the out-of-network cost would be lower than the plan’s in-network cost.
• To provide a process for enrollees to obtain a good faith cost estimate and to receive an out-of-network credit that lowers the enrollee’s final payment.

Main provisions

• Good faith cost estimates (Section 62J.81, subdivision 1a)

  • Health plan companies must, within ten business days after a complete request, provide an enrollee (or their designee) with:
  • A good faith estimate of the total payment the plan has contracted for with a specified network provider for a health care service, plus the enrollee’s share (out-of-pocket costs), or
  • The lowest total payment the enrollee would owe for the service from any provider comparable to the out-of-network provider, considering geographic accessibility.
  • The estimate is not a legally binding quote.
  • A complete request includes all information the plan needs to issue the estimate (forms may be required).

• Definitions used for credits (Section 62J.829)

  • Estimated in-network cost difference: good faith in-network estimate minus the out-of-network estimate.
  • Out-of-network credit: a credit equal to 50% of the estimated in-network cost difference.
  • The plan may ask for documentation of the good faith estimates but cannot require it before the enrollee receives the service.

• When credits must be issued (Subdivision 2)

  • Plans must issue an out-of-network credit if the enrollee received care from an out-of-network provider and identified a positive estimated in-network cost difference before the service.
  • The credit equals 50% of the estimated difference.
  • The credit may be applied as an offset to the enrollee’s next due payment and should be applied immediately unless the enrollee requests otherwise.
  • The enrollee’s obligation to use the credit is subject to a limit on total credits per plan per enrollee (see below for the cap note).

• Limits and restrictions (Subdivision 2)

  • Credits are not available if:
  • The service is provided outside the United States, or
  • The enrollee is delinquent on premium payments.
  • There is a maximum total amount of out-of-network credits an enrollee may have with a single health plan (the exact cap is not specified in the provided text).

• No punitive design changes (Subdivision 3)

  • Health plans may not impose cost-sharing, utilization review limits, or premium increases that would reduce an enrollee’s ability to receive or use an out-of-network credit.
  • A premium or cost-sharing change tied to the credit is considered a limit on the enrollee’s ability to receive the benefit.

• Notices of credit balance (Subdivision 4)

  • Plans must provide an enrollee with a statement of their credit balance at least periodically (frequency is described in the bill but not specified in the excerpt).

• Credit balance treatment at plan termination (Subdivision 5)

  • If a plan ends for any reason, the plan must pay the available out-of-network credit balance to the enrollee, except in cases of nonpayment of premiums, material misrepresentation, or fraud.

• Application timing (Subdivision 6)

  • If applying the credit before an enrollee meets their deductible would affect tax-advantaged accounts (like an HSA) or catastrophic coverage eligibility, the credit applies only after the enrollee meets the deductible.

• Enforcement (Subdivision 7)

  • The Minnesota Commissioner of Commerce can investigate and enforce these provisions using its existing authority.

• Related amendment to another statute (Section 3)

  • Adds a reference to “out-of-network credit balance” in Minnesota Statutes, indicating how the credit balance is treated for purposes of subtraction in a related provision.

Significant changes to existing law

• Creates a formal framework for out-of-network credits:
  • Introduces the concept of an out-of-network credit equal to 50% of the estimated in-network cost difference.
  • Establishes a process for obtaining and applying good faith estimates.
  • Requires disclosures and ongoing credit balance reporting.
  • Adds enforcement by the Commissioner of Commerce.
• Amends multiple statutes to incorporate the credit system:
  • Adds details to section 62J.81 (disclosures to enrollees) and 62J.829 (credit mechanics) and references to out-of-network credit balances in related statutory provisions (e.g., 290.0132).

How this could affect enrollees and plans

• Enrollees could receive a 50% credit when using an out-of-network provider if the out-of-network cost difference is positive and before the service is performed.
• Credits can be applied immediately to reduce the enrollee’s next payment, and balances must be tracked and disclosed.
• Plans must provide timely good faith estimates and cannot condition the credit on obtaining additional documentation after services are performed.
• The bill imposes safeguards to prevent plans from using credits to justify higher premiums, more cost-sharing, or other limitations on benefits.

Enforcement and oversight

• The Commissioner of Commerce would have authority to investigate and enforce these provisions.

Relevant terms

• out-of-network credit
• in-network cost difference
• estimated in-network cost difference
• good faith estimate
• health plan company
• enrollee
• out-of-network services
• credit balance
• immediate offset
• complete request
• geographic accessibility
• notice of credit balance
• enforcement
• Commissioner of Commerce
• Section 62J.81
• Section 62J.829
• Minnesota Statutes 2024
• 290.0132 Subd.40
• deductible
• out-of-network provider
• cost sharing
• premium
• utilization review
• misrepresentation
• fraud