Stricken language would be deleted from and underlined language would be added to present law.
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State of Arkansas 1
95th General Assembly A Bill 2
Regular Session, 2025 SENATE BILL 626 3
4
By: Senator Irvin 5
By: Representative L. Johnson 6
7
For An Act To Be Entitled 8
AN ACT TO AMEND THE LAW CONCERNING HEALTHCARE 9
PROVIDER REIMBURSEMENT; TO REQUIRE FAIR AND 10
TRANSPARENT REIMBURSEMENT RATES FOR LICENSED 11
AMBULATORY SURGICAL CENTERS, OUTPATIENT PSYCHIATRIC 12
CENTERS, AND OUTPATIENT IMAGING FACILITIES; TO ENSURE 13
PARITY IN INSURANCE PAYMENTS FOR HEALTHCARE SERVICES; 14
TO AMEND THE BILLING IN THE BEST INTEREST OF PATIENTS 15
ACT; TO DECLARE AN EMERGENCY; AND FOR OTHER PURPOSES. 16
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18
Subtitle 19
TO REQUIRE FAIR AND TRANSPARENT 20
REIMBURSEMENT RATES; TO ENSURE PARITY OF 21
HEALTHCARE SERVICES; TO AMEND THE 22
BILLING IN THE BEST INTEREST OF PATIENTS 23
ACT; AND TO DECLARE AN EMERGENCY. 24
25
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 26
27
SECTION 1. DO NOT CODIFY. Legislative findings and intent. 28
(a) The General Assembly finds that: 29
(1) Disparities in the reimbursement rates for medical and 30
imaging services performed at hospital -based outpatient departments and 31
other licensed outpatient healthcare facilities can create barriers to 32
competition, reduce patient access to cost -effective care, and impose 33
unnecessary financial burdens on healthcare providers providing medical and 34
outpatient imaging services outside of hospital facilities; 35
(2) In Ark. Blue Cross & Blue Shield v. Freeway Surgery Ctr., 36 SB626
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2024 Ark. App. 540, the Arkansas Court of Appeals interpreted Arkansas law in 1
a manner that permits insurers to reimburse licensed ambulatory surgical 2
centers at rates lower than those paid to hospital -based facilities for the 3
same outpatient services despite the clear legislative intent to ensure 4
reimbursement on an equal basis; 5
(3) The interpretation in Ark. Blue Cross & Blue Shield v. 6
Freeway Surgery Ctr., 2024 Ark. App. 540. undermines competition in the 7
healthcare marketplace, disincentivizes cost -efficient alternatives to 8
hospital-based care, and imposes financial hardships on providers operating 9
in nonhospital settings; and 10
(4) Transparency in reimbursement methodologies will promote 11
fairness in the healthcare marketplace and ensure that insurers comply with 12
existing state laws governing provider reimbursement. 13
(b) It is the intent of the General Assembly in enacting this act to: 14
(1) Ensure fair and equitable reimbursement rates for medical or 15
imaging services performed at licensed ambulatory surgical centers, 16
outpatient psychiatric centers, and outpatient imaging facilities; 17
(2) Amend the law to clarify that insurers shall not reimburse 18
licensed ambulatory surgical centers at rates lower than those applied to 19
hospital-based outpatient departments for equivalent healthcare services, 20
thereby making the holding in Ark. Blue Cross & Blue Shield v. Freeway 21
Surgery Ctr., 2024 Ark. App. 540, no longer applicable; 22
(3) Reaffirm the requirement that insurers establish fair, 23
transparent, and nondiscriminatory reimbursement methodologies that ensure 24
insurers reimburse all licensed healthcare facilities on an equal basis for 25
performing the same medical, surgical, or imaging services under § 23 -79-115; 26
and 27
(4) Require insurers to: 28
(A) Reimburse licensed ambulatory surgical centers, 29
outpatient imaging providers' facilities or centers, and outpatient 30
psychiatric centers on an equal basis as hospitals and hospital -based 31
outpatient departments for the same medical, surgical, and imaging services; 32
(B) Disclose the insurer's reimbursement methodologies and 33
rates to contracted providers; and 34
(C) Ensure that reimbursement rates for services at 35
ambulatory surgical centers, outpatient imaging providers facilities or 36 SB626
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centers, and outpatient psychiatric centers: 1
(i) Are not set below ninety percent (90%) of the 2
average hospital-based outpatient rate for the same service in the applicable 3
county or otherwise in county with the closest hospital facility; and 4
(ii) Apply retroactively to all reimbursement claims 5
and contracts in effect as of the effective date of this act, including any 6
pending claims, disputes, or litigation concerning the reimbursement of 7
services provided by ambulatory surgical centers, outpatient imaging 8
providers' facilities or centers, and outpatient psychiatric centers. 9
10
SECTION 2. Arkansas Code § 23 -79-101 is amended to read as follows: 11
23-79-101. Definitions. 12
As used in this chapter: 13
(1) "Excepted benefits" means benefits under one (1) or more, or 14
any combination thereof, of the following: 15
(A) Benefits not subject to requirements, including 16
without limitation: 17
(i) Coverage only for accident or disability income 18
insurance, or any combination thereof; 19
(ii) Coverage issued as a supplement to liability 20
insurance; 21
(iii) Liability insurance, including general 22
liability insurance and automobile liability insurance; 23
(iv) Workers' compensation or similar insurance; 24
(v) Automobile medical payment insurance; 25
(vi) Credit-only insurance; and 26
(vii) Other similar insurance coverage, specified in 27
regulations, under which benefits for medical care are secondary or 28
incidental to other insurance benefits; 29
(B) Limited-scope dental or vision benefits; 30
(C) Benefits for long -term care, nursing home care, home 31
health care, community -based care, or any combination thereof; 32
(D) Coverage only for a specified disease or illness; 33
(E) Hospital indemnity or other fixed indemnity insurance; 34
and 35
(F) Medicare supplemental health insurance as defined 36 SB626
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under section 1882(g)(1) of the Social Security Act, 42 U.S.C. § 1
1395ss(g)(1), coverage supplemental to the coverage provided under 10 U.S.C. 2
§ 1071 et seq., and similar supplemental coverage; 3
(2) "Hospital-based outpatient department" means a healthcare 4
facility that provides outpatient services to a patient at an on -site 5
hospital-operated outpatient clinic or other hospital -affiliated clinic 6
location; 7
(3) "Hospital-based outpatient department service" means a 8
healthcare service paid with an insurer’s payment system to a hospital for 9
outpatient services, including without limitation imaging, surgery, and 10
medical services, that are performed at a hospital -based outpatient 11
department; 12
(4) "Outpatient imaging facility or center" means a healthcare 13
facility or provider that provides diagnostic and advanced imaging services 14
to patients and uses Current Procedural Terminology codes 70010 –79999 to bill 15
for the facility component of imaging services; 16
(5) "Policy" means the written contract of or written agreement 17
for or effecting insurance, by whatever name called, and includes all 18
clauses, riders, endorsements, and papers made a part thereof; and 19
(3)(A)(6)(A) "Premium" is the consideration for insurance, by 20
whatever name called. 21
(B) Any assessment, or any membership, policy, survey, 22
inspection, service, or similar fee or charge in consideration for a policy 23
is deemed part of the premium ; and 24
(7) "The same or similar healthcare service" means a healthcare 25
service provided to a patient identified by the same or a substantially 26
similar Current Procedural Terminology code developed by the American Medical 27
Association. 28
29
SECTION 3. Arkansas Code § 23 -79-115 is amended to read as follows: 30
23-79-115. Entitlement notwithstanding policy provisions — Services 31
performed by outpatient centers. 32
(a)(1)(A) Notwithstanding any provisions of any individual or group 33
accident and health insurance policy, or any provision of a policy, contract, 34
plan, or agreement covering hospital or medical services, in cases in which 35
the policy, contract, plan, or agreement provides for payment or 36 SB626
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reimbursement for any healthcare service provided by hospitals or related 1
facilities When an insurer under a policy, contract, plan, or agreement 2
agrees to pay or reimburse for a healthcare service provided at or by a 3
hospital or related facility as defined in § 20-9-201 or § 20-10-213, the 4
healthcare provider, healthcare facility, or other person entitled to payment 5
or reimbursement for any healthcare services at a licensed ambulatory surgery 6
center, outpatient surgery center, or outpatient imaging facility or center 7
under the policy, contract, plan, or agreement and is entitled to payment or 8
reimbursement on an equal basis for the service when the service is provided 9
by facilities licensed as outpatient surgery centers under §§ 20 -9-214 and 10
20-9-215 be payment or reimbursement at a rate that is no less than ninety 11
percent (90%) of the rate paid to a hospital or related facility for the same 12
or similar healthcare service, as identified by the its designated Current 13
Procedural Terminology code . 14
(B) This subdivision (a)(1) applies notwithstanding any 15
provision of: 16
(i) An individual or group accident and health 17
insurance policy; 18
(ii) A policy, contract, plan, or agreement covering 19
hospital or medical services; 20
(iii) A network participation agreement; or 21
(iv) An agreement between an insurer and a 22
healthcare provider. 23
(2) This subsection Subdivision (a)(1) of this section applies 24
to insurance policies and hospital service corporation contracts that are 25
delivered or issued for delivery in this state more than one hundred twenty 26
(120) days after July 6, 1977, and to such other contracts, plans, or 27
agreements that are entered into or effectuated in this state more than one 28
hundred twenty (120) days after July 6, 1977 , including without limitation 29
network participation agreements or any agreement between an insurer and a 30
healthcare provider. 31
(b)(1)(A) Notwithstanding any provisions of any individual or group 32
accident and health insurance policy, or any provision of a policy, contract, 33
plan, or agreement covering hospital or medical services, in cases in which 34
the policy, contract, plan, or agreement provides for payment or 35
reimbursement for any healthcare service provided by hospitals or related 36 SB626
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facilities When an insurer under a policy, contract, plan, or agreement 1
agrees to pay or reimburse for a healthcare service provided at or by a 2
hospital or related facility as defined in § 20-9-201 or § 20-10-213, the 3
healthcare provider, healthcare facility, or other the person entitled to 4
payment or reimbursement or services for any healthcare services at a 5
licensed ambulatory surgery center, outpatient surgery center, or outpatient 6
imaging facility or center under the policy, contract, plan, or agreement is 7
entitled to payment or reimbursement on an equal basis for the service when 8
the service is provided by facilities licensed as outpatient psychiatric 9
centers under §§ 20-9-214 and 20-9-215 be paid or reimbursed at a rate that 10
is no less than ninety percent (90%) of the rate paid to a hospital or 11
related facility for the same or similar healthcare service, as identified by 12
the its designated Current Procedural Terminology code in the same geographic 13
area. 14
(B) This subdivision (b)(1) shall apply notwithstanding 15
any provision of: 16
(i) An individual or group accident and health 17
insurance policy; 18
(ii) A policy, contract, plan, or agreement covering 19
hospital or medical services; 20
(iii) A network participation agreement; or 21
(iv) An agreement between an insurer and a 22
healthcare provider. 23
(2) This subsection Subdivision (b)(1) of this section applies 24
to insurance policies and hospital service corporation contracts that are 25
delivered or issued for delivery in this state more than one hundred twenty 26
(120) days after July 20, 1979, and to such other contracts, plans, or 27
agreements that are entered into or effectuated in this state more than one 28
hundred twenty (120) days after July 20, 1979 , including without limitation 29
network participation agreements or any agreements between an insurer and a 30
healthcare provider. 31
(c) The purpose of this section is to ensure that a healthcare 32
provider, a healthcare facility, or other person entitled to payment or 33
reimbursement for any healthcare service from an insurer is paid or 34
reimbursed at a rate no more than ten percent (10%) less than the amount paid 35
or reimbursed to a hospital for the same or similar healthcare service, as 36 SB626
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identified by its designated Current Procedural Terminology code, in the same 1
geographic area if the healthcare service is performed at an ambulatory 2
surgical center, outpatient surgical center, outpatient imaging center or 3
facility, or outpatient psychiatric center, subject to the following: 4
(1)(A) An insurer may consider and apply the Patient Protection 5
Act of 1995, § 23-99-201 et seq., and § 23 -99-801 et seq. when establishing a 6
rate for payment or reimbursement for a healthcare service that is provided 7
at an outpatient surgery center licensed under §§ 20 -9-214 and 20-9-215, an 8
outpatient imagining facility or center, and an outpatient psychiatric center 9
if the insurer annually certifies compliance with this section and § 23 -99-10
204 with the State Insurance Department. 11
(B) The certification required under subdivision (c)(1)(A) 12
of this section shall include the following information: 13
(i)(a) The insurer’s methodology for determining 14
payment or reimbursement rates to include the factors, mathematical 15
computations, and weights considered by the insurer in determining each 16
individual healthcare provider’s reimbursement rate. 17
(b) The factors under subdivision 18
(c)(1)(B)(i)(a) of this section shall include without limitation: 19
(1) The healthcare provider type; 20
(2) Geographic location; 21
(3) Complexity of the medical service; 22
(4) Healthcare provider’s contractual 23
agreement; 24
(5) Quality measures, such as patient 25
satisfaction, clinical outcomes, and adherence to clinical guidelines or 26
performance metrics; 27
(6) Application of utilization control 28
measures, such as prior authorization or case management, to ensure services 29
are medically necessary and cost -effective; 30
(7) Influence of service volume or case -31
load in determining the reimbursement rate; 32
(8) Reimbursement adjustments to account 33
for the risk profiles of the healthcare provider’s patient population, such 34
as adjusting for high -risk patient groups requiring more intensive care; and 35
(9) Any other factors deemed pertinent 36 SB626
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by the Insurance Commissioner; 1
(ii)(a) A schedule of reimbursement rates for each 2
healthcare provider with which the insurer maintains an agreement referenced 3
in subsections (a) and (b) of this section based on the class of healthcare 4
provider and geographic location, a copy of which shall also be provided to 5
applicant healthcare providers. 6
(b) The amount of information included on a 7
schedule of reimbursement rates under subdivision (c)(1)(B)(ii)(a) of this 8
section shall be comprehensive enough to enable the healthcare provider to 9
determine the manner in which the healthcare provider is paid and the amount 10
that a healthcare provider will be paid under the contract for the healthcare 11
provider’s services. 12
(c) The schedule of reimbursement rates or 13
other information submitted to a healthcare provider under this section shall 14
include a description of the processes and factors that may affect the actual 15
amount paid to the healthcare provider, including without limitation 16
copayments, coinsurance, deductibles, risk -sharing arrangements, and 17
liability of third parties. 18
(d) If an actual payment for the procedures 19
cannot be ascertained from the fee schedule or other information submitted to 20
a healthcare provider under this section, the insurer shall provide an 21
explanation of the methodology used to determine actual payment for 22
procedures frequently performed by the healthcare provider that involve 23
combinations of services or payment codes, such as the relative value unit 24
system and conversion factor, the percentage of Medicare payment system, or 25
percentage of billed charges. 26
(e) As applicable, the methodology disclosure 27
provided for in this section shall include the name of any relative value 28
system, the version, edition, or publication date of the relative value 29
system, and any applicable conversion to the relative value system or 30
modification to the relative value system to account for the geographic 31
location in which the healthcare provider practices; 32
(iii) An analysis of any disparity in reimbursement 33
rates among healthcare providers; and 34
(iv) If an insurer employs or utilizes a standard 35
deviation in its comparative reimbursement analysis, a detailed narrative 36 SB626
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explaining the reason for the disparity and the mathematical basis for which 1
the disparate reimbursement rates were derived. 2
(2) A healthcare provider who contracts with an insurer shall be 3
entitled to receive the information contained in subsection (c) of this 4
section relating to the healthcare provider’s agreement with the insurer if 5
the healthcare provider is required to first execute a confidentiality 6
agreement to ensure that the insurer’s confidential or proprietary 7
information remains confidential. 8
(3)(A) An insurer shall not establish a payment or reimbursement 9
rate for a healthcare service that is less than ninety percent (90%) of the 10
average reimbursement rate for the same or similar healthcare service, as 11
identified by its designated Current Procedural Terminology code, paid to 12
hospital-based outpatient departments, in the county where the ambulatory 13
surgical center, outpatient surgery center, outpatient imaging facility or 14
center, or outpatient psychiatric center is licensed. 15
(B) If a hospital or hospital -based outpatient department 16
is not located in the county where the ambulatory surgical center, outpatient 17
surgical center, outpatient imaging facility or center, or outpatient 18
psychiatric center is located, the average reimbursement rate for the 19
services provided by the ambulatory surgical center, outpatient surgical 20
center, outpatient imaging facility or center, or outpatient psychiatric 21
center is determined by the nearest county where a hospital or hospital -based 22
outpatient department operates; and 23
(3)(A) An insurer shall not attempt to reduce competition in the 24
healthcare marketplace by limiting coverage for outpatient services performed 25
by nonhospital facilities services. 26
(B) An insurer shall cover services performed at 27
ambulatory surgical centers, outpatient surgical centers, outpatient imaging 28
facilities or centers, and outpatient psychiatric centers, if those services 29
are covered under the insurer’s contracts for hospital -based outpatient 30
department payment to hospitals in this state. 31
(d)(1) This section shall not be waived by contract. 32
(2) An agreement or other arrangement that violates this 33
subchapter is void. 34
(e)(1) The Insurance Commissioner: 35
(i) Shall enforce this subchapter; and 36 SB626
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(ii) May promulgate rules to implement the requirements of 1
this subchapter as needed. 2
(2) All remedies, penalties, and authority granted to the 3
commissioner under the Trade Practices Act, § 23 -66-201 et seq., including 4
the award of restitution and damages, shall be available to the commissioner 5
for the enforcement of this subchapter. 6
(f) A violation of this section is a deceptive act, as defined by the 7
Trade Practices Act, § 23 -66-201 et seq. and § 4-88-101 et seq., except that 8
the statute of limitations for private causes of action against an insurer by 9
a healthcare provider shall be five (5) years for a violation of this 10
section. 11
12
SECTION 4. Arkansas Code Title 23, Chapter 99, Subchapter 15, is 13
amended to add an additional section to read as follows: 14
23-99-1505. Prohibition on pricing increases or reduction of fee 15
schedules. 16
(a) An insurer shall not increase cost -sharing, premiums, or other 17
fees, including without limitation per -month payments, on an enrollee, 18
employer, or any other entity that is responsible for payment of cost -19
sharing, premiums, or other fees, including without limitation per -month 20
payments, on behalf of an enrollee for healthcare services under a health 21
benefit plan or lower existing reimbursement rates for existing hospital 22
inpatient or outpatient care or to nonhospital outpatient services or 23
facilities or healthcare providers unless each of the following conditions 24
are met: 25
(1) The insurer's excess of capital over its mandatory control 26
level RBC, as defined in § 23 -63-1302, is less than sixty -five percent (65%); 27
(2) The insurer's medical loss ratio is ninety percent (90%) or 28
greater on clinical services and quality improvement; and 29
(3) The proposed increase receives the approval of the Insurance 30
Commissioner after the commissioner confirms compliance with this section and 31
§ 23-79-115. 32
(b)(1) For purposes of this section, the costs associated with 33
carrying enrollee medical debt is an administrative cost for purposes of 34
calculating the medical loss ratio. 35
(2) However, clinical services shall not include any cost -36 SB626
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sharing. 1
2
SECTION 5. DO NOT CODIFY. Severability. 3
If any provision of this act or application of this act to any person 4
or circumstances is held invalid, the invalidity shall not affect other 5
provisions or applications of this act which can be given effect without the 6
invalid provision of application, and to this end, the provisions of this act 7
are declared severable. 8
9
SECTION 6. DO NOT CODIFY. Retroactivity. 10
This act shall apply retroactively to a reimbursement claim and 11
contract in effect as of the effective date of this act, including any 12
pending claims, disputes, or litigation concerning the reimbursement of 13
services provided by a ambulatory surgical center, outpatient imaging 14
provider, facility or center, and outpatient psychiatric center. 15
16
SECTION 7. EMERGENCY CLAUSE. It is found and determined by the 17
General Assembly of the State of Arkansas that the absence of adequate 18
statutory enforcement of Arkansas Code § 23 -79-115 has resulted in arbitrary 19
and discriminatory reimbursement practices that threaten the financial 20
viability of ambulatory surgical centers and outpatient psychiatric centers; 21
that without immediate intervention by the General Assembly to pass 22
legislation to clarify enforcement, discriminatory reimbursement practices 23
will continue to restrict patient access to cost -effective healthcare 24
providers causing irreparable harm to Arkansas residents; and that this act 25
is immediately necessary because current Arkansas law does not sufficiently 26
address transparency in healthcare pricing, the absence of proper enforcement 27
of health insurer reimbursement rate laws has allowed health insurers to 28
ignore the application of Arkansas Code § 23 -79-115 that has been the law 29
since November 17, 1979, that any willing provider laws are subordinate to 30
the requirements of Arkansas Code § 23 -79-115 and proper adherence to pay -31
parity statutes ensures patient access to healthcare providers of their 32
choice, and that it is immediately necessary to protect against deceptive 33
insurance practices that harm the delivery of healthcare and reimbursement 34
for healthcare services in Arkansas. Therefore, an emergency is declared to 35
exist, and this act being immediately necessary for the preservation of the 36 SB626
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public peace, health, and safety shall become effective on: 1
(1) The date of its approval by the Governor; 2
(2) If the bill is neither approved nor vetoed by the Governor, 3
the expiration of the period of time during which the Governor may veto the 4
bill; or 5
(3) If the bill is vetoed by the Governor and the veto is 6
overridden, the date the last house overrides the veto. 7
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