Washington, D.C., January 8, 2025 – Last week, The ERISA Industry Committee (ERIC) submitted a formal comment letter in response to INS-2025-00072, the Virginia’s State Bureau of Insurance’s (BOI) proposed amendments to the Rules Governing Balance Billing for Out-of-Network Health Care Services. While the comment letter recognized efforts to strengthen balance billing protections, ERIC cautioned against a specific proposed provision that would require insurers to use certain arbitration payments when calculating what constitutes a “reasonable” payment rate.
The proposed rule mandates that, when deciding what counts as a “commercially reasonable” reimbursement rate, insurance companies include atypical, one-off payments they were required to make to out-of-network providers as a result of arbitration processes in their calculation. Since arbitration awards are often far higher than normal market rates, including them would artificially inflate what is considered a reasonable price, skewing costs upward across the health care system and negatively affecting employer plan sponsors and the everyday patients that participate in their plans.
“If you use outlier payments to calculate “reasonableness,” then you guarantee that health care costs will be higher for payers across the Commonwealth,” said Dillon Clair, ERIC Director of State Advocacy. “ERIC urges the BOI to remove the inclusion of arbitration award amounts from the determination of what constitutes a “commercially reasonable” payment rate and to work with stakeholders, including the employer community, to develop standards that ensure arbitration outcomes reflect realistic market conditions.”
Read the full comment letter here.