WHA, UW Health Support Bill Clarifying State Law on Prompt Pay Discounts, One Health Insurer Association Opposes

February 06, 2020

WHA staff and members testified before the Assembly Health Committee this week in support of Assembly Bill 841, bipartisan legislation to clarify in Wisconsin law the ability for health care providers to offer prompt-pay discounts on cost-sharing amounts, such as coinsurance and deductibles owed to a provider.

WHA Senior Vice President Finance/ Chief Operating Officer Brian Potter, and Attorney Laura Leitch joined UW Health Vice President Revenue Cycle Abigail Abongwa testifying in support of AB 841 in what is expected to be one of the final meetings of the Assembly Health Committee before the full State Assembly adjourns later this month.

A bipartisan group of lawmakers, including Reps. John Nygren (R-Marinette) and Deb Kolste (D-Janesville), and Sens. Dale Kooyenga (R-Brookfield) and Jon Erpenbach (D-West Point), released a memo last week asking their colleagues to sign onto the legislation. In their memo, lawmakers recognized a 2004 Wisconsin Attorney General opinion stating that if certain conditions are met, prompt-pay discounts are allowed under Wisconsin law.

Nygren was joined in public testimony on the bill by his Democratic colleague and co-lead author Kolste, discussing the increase in out-of-pocket costs for patients. “These increasing out-of-pocket costs are not only a significant burden on consumers to pay, but also a cost to the provider to be able to collect,” Nygren said. In Kolste’s testimony to the committee, she stated the “legislation helps ease the burden of [patients and health care providers] by providing common-sense administrative efficiencies.”

Nygren and Kolste said that AB 841 is intended to clarify what was recognized by the 2004 Wisconsin Attorney General opinion, as there have been different interpretations of this opinion and its corresponding state statute, which has served as a barrier for some health care providers to offer discounts to patients.

WHA’s Leitch provided the committee with background to the relevant Wisconsin statutory provision and the original intent of that provision. Leitch also discussed letters exchanged between a legislator and the Wisconsin Attorney General in 2004. In his letter, the legislator made the point that a prompt-pay discount would not be the health care provider offering an inappropriate inducement for the patient to receive health care services, but rather an inducement for the patient to pay the bill in a timely manner, thereby reducing collection costs.

In addition, Leitch discussed the federal Anti-Kickback Statute, an AKS safe harbor, and a U.S. Department of Health and Human Services Office of the Inspector General Advisory Opinion from 2008 that described the safe harbor conditions and other features that would allow the requesting health care provider to implement a prompt pay discount program for the purpose of more successful bill collection.

“Research has shown that a large medical bill or even the perception of a high dollar amount owed can feel overwhelming, and many patients consider putting off seeking treatment to avoid paying a high price,” UW Health’s Abongwa said. “Unfortunately, the high price comes either way because patients who put off seeking medical care could end up in more costly emergent situations down the road.

“This cycle is far from ideal and is why I believe Assembly Bill 841 can help. It will encourage patients to pay their out-of-pocket expenses, and if they do, will eliminate the hassle and expense of the collections process due to lack of payment,” Abongwa said.

Representatives for the Wisconsin Association of Health Plans testified “For Information Only,” although their comments objected to provisions in the bill as drafted. The Association recommended statutory language that would only allow providers to offer a discount once a patient has not paid after 90 days of service an

The Alliance of Health Insurers, another large Wisconsin health insurance trade association representing both national and statebased insurance companies, has remained neutral on the legislation.

This story originally appeared in the February 06, 2020 edition of WHA Newsletter