Currentpriority healthPolicy N/A

Balance billing and payment limits for nonparticipating providers (Michigan Act 368)

State law (Michigan) governing when nonparticipating providers may bill patients, required disclosures for nonemergency services, and how carriers must calculate and pay reimbursement for out-of-network services; affects carriers, participating and nonparticipating providers, and patients in Michigan.

Policy Summary

Payerpriority health

PolicyBalance billing and payment limits for nonparticipating providers (Michigan Act 368)

Policy CodePolicy N/A

Change TypeNo material change

Effective DateAs written (Imd. Eff. Oct. 22, 2020)

Next Review DateN/A

Key ActionSubmit claims within 60 days and accept payment equal to the greater of the carrier's regional median negotiated amount or 150% of Medicare FFS; do not collect amounts beyond in-network cost-sharing.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

60 daysclaim submission timeframe

150%payment floor vs Medicare FFS

Median ratealternative benchmark

14 daysdisclosure timing

7 yearsdisclosure retention

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Payment and Billing Coverage Criteria

Payment and billing criteria for nonparticipating providers

Covered when ALL of the following apply:

ALL of the following

Carrier must pay the nonparticipating provider within 60 days after receiving the claim

ALL of the following

Provider may only collect from the patient the applicable in-network coinsurance, copayment, or deductible; provider shall not collect or attempt to collect any other amount from the patient

Failure to provide required disclosure for nonemergency patients

If a nonparticipating provider fails to provide the disclosure required under section 24509, the provider must submit a claim within 60 days and accept payment as described above

Coding and Payment Benchmarks

Documentation supporting complicating-factor reimbursementmixed

procedure code or modifier

Used to support claim for care beyond usual service when asserting a complicating factor

Alternate payment threshold

Alternate payment benchmarkGreater of the carrier's regional median negotiated amount for the region and provider specialty OR 150% of the Medicare fee‑for‑service (FFS) rate

ApplicabilityUsed when nonparticipating provider submits a claim for emergency services or when disclosure not provided for nonemergency services

Exclusions from calculationAmounts exclude any in‑network coinsurance, copayments, or deductibles

Provider Requirements and Processes

Documentation Required

Nonemergency patient disclosure requirement

Nonemergency patient disclosures are required in writing, in at least 12-point type, and must use the prescribed language. The nonparticipating provider must obtain the nonemergency patient's (or representative's) signature acknowledging receipt, retain a copy for at least 7 years, and provide a good-faith estimate of the cost of the scheduled services. The disclosure must be provided at the earliest required timing (e.g., at least 14 days before scheduled services in most facilities, at first contact for certain outpatient facilities, or during presurgical/scheduling/preoperative contacts) and must not be presented only at admission or while preparing the patient for surgery.

Disclosure text must be in substantially the following form and include the patient signature and date.
Provide good-faith cost estimate (does not include unforeseen circumstances).
Retain signed disclosure for >= 7 years.
Do not provide disclosure for the first time only at admission or when preparing patient for surgery (permitted timings listed in statute).

Key Definitions

Carrier

Definition'Carrier' means a person that issues a health benefit plan in this state (including insurers and HMOs) or an entity that contracts with the state or a local unit of government to provide, arrange for, pay for, or reimburse health care services under a self‑funded governmental plan.

ExamplesIncludes insurers, health maintenance organizations, and entities administering self‑funded governmental employee plans.

Role under statuteCarrier must determine region and provider specialty for median calculations and pay required amounts within 60 days of receiving a claim.

Health care service

Definition'Health care service' means a diagnostic procedure, medical or surgical procedure, examination, or other treatment.

Scope

Billing Rule

Consequences for failing to provide disclosure

If a nonparticipating provider fails to provide the required disclosure, the provider must submit a claim to the nonemergency patient's carrier within 60 days of the service and accept payment in full from the carrier equal to the greater of: (a) the carrier's regional median in-network negotiated amount for the provider specialty (excluding member cost sharing) or (b) 150% of the Medicare fee-for-service amount (excluding member cost sharing). The carrier must pay that amount within 60 days; the provider may only collect applicable in-network coinsurance, copayment, or deductible from the patient.

Acceptable payment = greater of regional median negotiated rate or 150% of Medicare FFS (member cost sharing excluded).
Carrier pays within 60 days of receiving claim.
Provider may not seek additional payment from patient beyond applicable in-network cost sharing.

Prior Authorization

Review and arbitration for rate disputes and complicating factors

For disputes about the median negotiated amount calculation or claims involving complicating factors, providers have defined review and arbitration rights. Beginning July 1, 2021, a nonparticipating provider may request a departmental review if they believe the regional median was calculated incorrectly; the department may request negotiated-rate data and will keep submitted materials confidential and protected from FOIA, subpoena, discovery, or private civil action. For emergency services with a documented complicating factor, a provider may submit the claim with clinical documentation and highlighted medical record portions; if the carrier denies, the provider may request binding arbitration through the department (beginning July 1, 2021). The department maintains an approved arbitrator list; the arbitrator reviews written submissions and decisions consider increased intensity/time/technical difficulty and patient severity. Arbitration timelines and submission requirements are statutory.

Request departmental review of median calculation (form/manner required by department).
Department may consult carrier-negotiated databases and will treat submitted materials as proprietary/confidential; not subject to FOIA, subpoena, discovery, or admissible in private civil actions.
For complicating factors: submit claim with clinical documentation and highlighted medical record; carrier must decide within 30 days to pay additional 25% of the amount under section 24507(2)(a) or deny.
If denied, provider may file for binding arbitration with the department (form/manner required); must include submitted documentation, carrier contact info, and denial letter.
Department provides approved arbitrator list; parties select an arbitrator from the list; arbitrator issues written decision within 45 days after receiving submissions.
Arbitrator considers documentation supporting procedure code/modifier use, increased intensity/time/technical difficulty, and patient severity.

Participating provider / participating health facility

Participating providerA provider who, under contract with a carrier (or the carrier's contractor/subcontractor), agrees to provide services to covered individuals and to accept the carrier's payment as payment in full other than coinsurance, copayments, or deductibles.

Participating health facilityA health facility that, under contract with a carrier (or its contractor/subcontractor), agrees to provide services to covered individuals and to accept carrier payment as payment in full other than coinsurance, copayments, or deductibles.

Contrast with nonparticipatingParticipating status is established by contract to accept carrier payment as payment in full; nonparticipating providers/facilities lack such contractual obligations.

Complicating factor

Definition'Complicating factor' means a factor that is not normally incident to a health care service, including but not limited to increased intensity, time, or technical difficulty; the severity of the patient's condition; or the physical or mental effort required in providing the service.

Use for increased reimbursementA nonparticipating provider may file a claim with clinical documentation and highlighted medical‑record support seeking reimbursement above the statutory amount when a complicating factor applies.

Arbitration and costsIf carrier denies an increased‑reimbursement claim, the provider may seek binding arbitration; the provider and carrier each pay half of arbitration costs and the provider may not collect more than in‑network cost‑sharing from the patient during arbitration.