Insurance committee holds SB 189 after debate over out‑of‑network penalty

Chair Mr. Sherman said the committee would pause consideration of Senate Bill 189 to give stakeholders more time to resolve disputes over two amendments, including one that would narrowly allow a 10% penalty in limited nonurgent situations. “I’ve decided to hold this bill another week,” Mr. Sherman said.

The bill as discussed would ban a practice of charging hospitals a 10% penalty when an out‑of‑network clinician provides care and an in‑network clinician was available. Amendment 7, as described by the chair, would limit that penalty to cases where a nonurgent, nonemergent facility had an in‑network clinician available but the hospital used an out‑of‑network clinician; it would also create a 60‑day cure period in which the parties would negotiate and require doctors who use the federal independent dispute resolution process (IDR) to notify the hospitals where they practiced.

Supporters of pausing the bill said the IDR system contains gaps and that state action must avoid unintended consequences. “The IDR process is a horrible process the way that it’s set up,” Chair Mr. Sherman said, arguing stakeholders need time to work toward a fix. Representative Campbell said the committee is “being put in the middle” of a federal problem and warned that shifting this dispute to the state level could ultimately raise costs for patients and employers.

Several committee members, including Representative Barrett, described practical scheduling realities that can produce out‑of‑network care even in planned procedures: on‑call coverage, last‑minute replacements, vacations and unanticipated tests can result in clinicians outside a patient’s network providing needed services. “You come in, you know your surgeon, your surgeon’s in network. Now you look up and the head of the table’s anesthesia. . . . So now all of a sudden, you have somebody filling in,” Representative Barrett said, illustrating why strict hospital‑level penalties may be hard to administer in practice.

Representative Shackleford said Amendment 7 does not solve the root federal problem and called the proposed penalty convoluted: “I don’t support the penalty, but I don’t think the amendment even fixes the penalty,” she said. Other members voiced concern that severe exceptions or workarounds could create loopholes or complexity that render the state response ineffective.

Committee members also discussed Amendment 8, which the chair said would allow insurers to pay half price for some preventive tests in wellness visits; he said he was still seeking information about whether those changes comply with federal guidelines.

No vote was taken. The committee’s only formal action was the chair’s announcement that SB 189 is being held for one week to allow additional discussions among insurers, providers and lawmakers. The chair said staff and members expect stakeholders to provide input during the week and that the committee would reconvene to consider revised language.