The practice of “surprise billing” by hospitals should be severely restricted, state Senate health policy leaders said Wednesday, as they took a bipartisan vote to crack down on the practice and require more transparency for patients.
The idea is to give people a better idea of what a medical procedure might cost them before they agree to it, to give patients more certainty over whether their care will be in-network or out-of-network, and to stop new bills from continuing to arrive months or even years after the fact.
Supporters say if Senate Bill 316 becomes law, it would at least give people more information to make decisions on their health care. And ideally, they say, it could potentially also lead to lower costs for everyone in the future.
“There is, I think, no other industry that a consumer agrees to pay for a service in advance with no clue as to what the cost will be, and no clue as to what they will be charged in full for those services,” Sen. Amy Galey, R-Alamance, said Wednesday.
She added that the bill “is an attempt to shine a light on every part of the health care system — to begin to see where the cost drivers truly exist, and to start to tamp down on those costs.”
The Senate has passed similar bills twice in recent years. But both bills went nowhere in the state House, in face of intense lobbying in opposition by the hospital industry. The North Carolina Healthcare Association, which lobbies for hospitals, declined to comment Wednesday on the new bill.
In addition to the various requirements to give patients more information before a procedure, the bill would also require hospitals to send patients an itemized bill — with descriptions written in what Galey called “plain English” — before the hospital could send the patient into collections for not paying their bill.
About one in every eight North Carolina adults had medical debt before the state approved Medicaid expansion, according to health policy analysis group KFF. After North Carolina approved Medicaid expansion in 2023, then-Gov. Roy Cooper pushed hospitals to forgive approximately $4 billion in medical debt held by low-income North Carolinians. Cooper announced last year that every hospital in the state was participating.
No lawmakers or members of the public spoke against the bill Wednesday, although Sen. Gale Adcock, D-Wake, said that based on her experience as a nurse there are probably some parts of the bill that would be difficult if not impossible for hospital staff to comply with.
She suggested further conversations on how to amend the bill to ensure hospitals could follow it — and the state could enforce it.
“It could provide clarity moving forward, and make sure you can enforce what you’re trying to do,” Adcock said.
AI claims denial
The Senate Health Committee also debated a separate bill — but stopped short of taking a vote on whether to advance it — that would ban health insurance companies from relying too heavily on artificial intelligence to deny people’s claims.
Insurance companies could still use AI to help review and make decisions on claims, even if Senate Bill 315 becomes law. But it would ban AI from being used as “the sole basis” of any decisions to deny or modify someone’s health care services.
“It’s 2025 — AI is a fact of life,” Sen. Benton Sawrey, R-Johnson, said. “It’s something that’s being used by doctors around the state, and health insurers, and hospitals. It’s inevitable. It’s going to be here, but I know that every person in this room has heard stories about their health insurers across the nation having some issues with it.”
UnitedHealthcare, the nation’s largest private health insurer, faces a class action lawsuit accusing it of using AI to deny many people’s claims. Last year the company’s CEO was gunned down in what police have said was a targeted assassination, apparently based on the company’s policies and practices.
Sawrey said the other bill on surprise billing also would exempt health insurance staffers from having to put their contact information on certain forms given to customers. He said it “addresses the aftermath of fear for employee safety after the tragedy that occurred a few months ago involving the UnitedHealthcare CEO.”
UnitedHealthcare Chief Executive Brian Thompson was shot and killed in Manhattan in a targeted attack — a killing that fueled a public outcry over claim denials by insurers.
The anti-AI bill would also make a number of other changes to crack down on health insurance companies’ efforts to deny people’s claims, including by banning insurers from retroactively requiring prior authorization for certain types of care, and then using that to issue denials.
The bill would also require appeals of insurance denials to be heard by licensed doctors who have experience in the type of medicine in question.
And it would appear to ban insurance companies from paying their on-staff doctors more money for suggesting claims be denied, by requiring appeals to be heard by doctors with “no financial interest, or other conflict of interest, in the outcome of the appeal.”
A top health insurance industry representative, Peter Daniel, spoke at the meeting to tell lawmakers they were willing to work with the Senate on the bill as it moves through the legislature.