The North Carolina Senate passed a comprehensive bill Thursday aimed at increasing transparency in healthcare billing, lowering costs, and speeding up the process of prior authorization for medical services.

Senators gave the Republican proposal overwhelmingly bipartisan approval in a 44-2 vote, sending it to the House.

Republicans in both chambers are advancing bills this session to address a number of healthcare issues and tackle North Carolina’s exceedingly high health care costs. A Forbes Advisor analysis published last year ranked the state as the most expensive in the country when it came to health care costs.

The proposal put forth by Senate Republicans last week and approved by the chamber Thursday includes several provisions to make billing practices more transparent. It would also require more frequent cost reporting to the N.C. Department of Health and Human Services; limit when health care providers can charge “facility fees” based on locations of medical care; and ban insurance companies from using artificial intelligence as the “sole basis” for denying requests for prior authorization of treatment.

Sen. Amy Galey, a Burlington Republican who is one of the bill’s primary sponsors, told colleagues during floor debate on Thursday that the bill was the Senate’s “next step at tackling unacceptably high healthcare costs” in the state, and is an attempt to create “actual change in patients’ lives and their wallets.”

With the legislation’s billing transparency provisions, the Senate is also renewing its push to crack down on “surprise billing” by hospitals. The Senate unanimously approved a bipartisan bill filed in both chambers in 2023 that took aim at the “weaponization” of medical debt, but the bill stalled in the House.

Democratic Sen. Gale Adcock, a nurse practitioner from Cary, commended Galey and the other primary sponsors of the bill, Republican Sens. Jim Burgin and Benton Sawrey, for their intention with the bill, but said she hopes there will be more conversation about the restrictions on facility fees. Adcock said she hopes lawmakers can avoid a “one-size-fits-all” solution to that issue.

In the House, meanwhile, top Republicans have introduced their own bill focused on expediting the process of prior authorization. That bill, which quickly received support from 60 lawmakers from both parties who signed on, hasn’t been heard in committee yet but is expected to move forward in the coming weeks.

As lawmakers make clear they want to reduce health care costs and improve the treatment approval process, it remains unclear if they will be able to agree on one bill that can pass both chambers and be sent to the governor’s desk.

Speaking with reporters last week, Senate leader Phil Berger said he was more “hopeful” than “optimistic” that both chambers will be able to make progress on health care affordability this session.

“At some point, we recognize the problem, and we know that the solution to the problem is going to require some vested interest to not be happy, and at some point, we will have the willingness to step on a toe or two,” Berger said.

Senate’s proposal covers billing transparency, facility fees and AI

The Senate’s proposal was introduced last week and quickly advanced to the floor.

Senate Bill 316’s provisions include:

▪ Increasing the frequency of how often hospitals must report to DHHS the amount charged to patients and other cost information for the 100 most frequently reported admissions and the 20 most common surgical procedures and common imaging procedures, from annually to quarterly.

▪ Prohibiting hospitals and ambulatory surgical facilities from referring unpaid medical bills to collections agencies without first providing an itemized list of the charges “in language comprehensible to an ordinary layperson.”

▪ Outlining a patient’s right to obtain a “good-faith estimate” in plain language when scheduling a non-urgent service. The estimate would have to go over each expected charge, and the final bill could not exceed the estimate by more than 5%.

▪ Prohibiting health care providers from charging facility fees for procedures not performed at a hospital’s main campus, an inpatient facility, ambulatory surgical facility, or a facility that includes an emergency department. Facility fees would also be banned outright for outpatient evaluation and management services, or for any other outpatient, diagnostic, or imaging services that are identified by DHHS.

▪ Requiring the state auditor to examine the prices out-of-network and uninsured patients that are charged by health service facilities that receive state funds, and report to lawmakers the extent to which those facilities are transparent about their prices.

▪ Eliminating certificate of need (CON) review for rehabilitative services and rehabilitation facilities and beds.

Both House and Senate want to speed up prior authorization

Both the Senate’s bill and the House’s bill include a series of changes meant to improve the processes by which insurance companies review requests for treatments that require approval beforehand.

The Senate’s bill would require insurance companies to complete those reviews and notify patients of the decision within 24 hours for urgent services, and within three days for non-urgent services and urgent services that are requested without electronically filed health records.

It also requires that appeals of utilization reviews be conducted by licensed physicians who have training and experience treating the medical condition at issue, or have at least three years of experience in the same or a similar specialty as the treating physician.

During a committee meeting last week, N.C. Association of Health Plans Executive Director Peter Daniel said the association supports the Senate’s utilization review provisions, which he described as a “balanced approach to reform.”

Daniel said that the association, which represents companies that provide health insurance in North Carolina, wants to see lower costs in the state but is “mindful” of “the need for practical solutions that avoid excessive mandates or make the unregulated market more financially attractive for a segment of the population.”

The House GOP’s bill would also require reviews of requests for urgent services to be completed within 24 hours, but would only allow two days, not three, for reviews of non-urgent services.

House Bill 434, named the “CARE FIRST Act,” also includes a provision stating that insurance companies that fail to approve, deny, or request more information about a requested utilization review within the time frames the bill establishes will be “deemed to have approved the request.”

House lawmakers, in their bill, also propose designating the work physicians do during the utilization review process as part of the “practice of medicine” as defined under state law, and granting the N.C. Medical Board the authority to subpoena information about a utilization review and take potential disciplinary action against them.

Rep. Tim Reeder, an emergency physician at East Carolina University who is one of the House bill’s primary sponsors, introduced a similar bill two years ago that cleared the House but stalled in the Senate.

Reeder previously told The News & Observer that while all insurance companies use prior authorization and claim it helps keep costs under control by avoiding unapproved or less cost-effective treatments, it’s often a burdensome process for physicians and patients, and can waste significant time, money, and effort, all of which can delay care.

Other primary sponsors of the House’s bill this year include Republican Reps. Grant Campbell, a practicing OB-GYN from Concord, Tricia Cotham, and John Bell, a high-ranking member of House leadership who chairs the powerful Rules Committee.

In addition to having the support of a wide array of House Republicans and Democrats, the House proposal also has the backing of the N.C. Medical Society and the N.C. Healthcare Association.

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