To Modify Payment Of Benefits For Certain Healthcare Providers Under A Health Benefit Plan.
HB1298 amends several Arkansas insurance code provisions governing how health benefit plans and blanket/group accident and health policies pay claims for hospital, nursing, medical, and surgical services. The core change is that, for out-of-network claims, a healthcare insurer must pay the claim directly to the healthcare provider that furnished the service. The bill also updates related payment-of-benefits language in three code sections to make this out-of-network direct-payment rule apply notwithstanding older provisions that generally allowed payment to the insured, beneficiary, estate, or, at the insurer’s option, directly to the provider.
The bill defines “health benefit plan” broadly to include individual, blanket, and group plans, managed care and indemnity plans, and certain state- and federally funded programs such as Arkansas Medicaid and the Arkansas Health and Opportunity for Me Program, while excluding dental-only, vision-only, disability income, credit, auto medical payments, workers’ compensation, accident-only, specified disease, and long-term-care-only coverage. It also defines “healthcare insurer” to include insurers, hospital and medical service corporations, HMOs, certain self-insured governmental or church plans, and Arkansas Medicaid, but not entities offering only dental or vision benefits.
HB1298 would change Arkansas law by creating a mandatory direct-payment requirement for out-of-network medical claims under covered health benefit plans, affecting insurers, Medicaid, and other covered health programs. It amends Arkansas Code §§ 23-85-114, 23-86-104, and 23-86-112 to override prior discretionary payment language and require payment to the treating out-of-network provider for covered hospital, nursing, medical, or surgical services. In practice, this could alter claims processing, provider reimbursement, and balance-billing or assignment-of-benefits practices for affected plans and insurers.
The available voting history shows strong, unanimous support: the bill passed the House 94-0 and the Senate 34-0 on third reading. No committee transcripts were provided, but the floor votes suggest broad bipartisan agreement and little public opposition in the recorded legislative process. The bill was approved on March 18, 2025.
No specific objections are documented in the provided materials, but the main policy issue inherent in the bill is the shift from insurer discretion to a mandatory direct-payment rule for out-of-network services. Potential points of contention would likely involve insurers, who may view the mandate as limiting claims-handling flexibility, versus healthcare providers, who may support guaranteed direct payment. The bill’s inclusion of Medicaid and other public health benefit programs may also be significant for administrators concerned about implementation and payment systems.