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Senate panel approves bill to protect 'Hospital Without Walls' participants from payer penalties
Summary
S.B. 603 would require private payers to allow contract restoration and reasonable payment when ambulatory surgery centers temporarily converted to hospitals under CMS 'Hospital Without Walls' during the COVID emergency; committee passed the bill after provider testimony alleging contract termination by some insurers.
Senator Irvin presented Senate Bill 603 to protect ambulatory surgery centers (ASCs) that enrolled in CMS's Hospital Without Walls (Section 1135 waiver) during the COVID public health emergency. The sponsor said the measure aims to ensure private payers do not penalize facilities that temporarily converted to hospital status and that contracts can be restored when the public health emergency ends.
Dr. Scott Schlesinger, a neurological surgeon at Legacy Spine and Neurological Specialist, described enrolling his ASC as a temporary hospital, keeping patients for longer stays under CMS rules and incurring additional staffing and nursing costs. He said one insurer had threatened to terminate his facility's ASC contract and another refused to recognize the temporary hospital status, leaving providers in a difficult position: operating under hospital licensing and expectations but encountering payer network terminations.
Derek Smith, representing UnitedHealthcare in this portion of the hearing, told the committee that many issues of this type are contract negotiations between providers and a small number of carriers; he expressed hope parties could negotiate but acknowledged the bill addresses a real business concern that had created friction. After questions and discussion, and with sponsor emphasis on preserving capacity for future public health emergencies, the committee approved S.B. 603 by voice vote.
