Passage of California surprise-bill legislation could spur other states to act
By Harris Meyer
September 1, 2016 - Modern Healthcare
California
medical consumers will enjoy strong new protection against surprise
out-of-network medical bills starting next July, under a hard-fought bill
overwhelmingly approved by the state legislature this week. It's widely expected
that Democratic Gov. Jerry Brown will sign it.
Under the bipartisan bill,
AB 72 (PDF), authored by Democratic
Assemblyman Rob Bonta, patients who received care in in-network facilities would
have to pay only in-network cost sharing. This would apply just to non-emergency
care, since emergency physicians in California already are barred from balance
billing patients. The billfs provisions would not apply, however, to
self-insured employer health plans, which are shielded from state regulations by
the federal Employee Retirement Income Security Act.
Health plans would
pay non-contracting physicians the plan's average contracted rate or 125% of the
Medicare rate, whichever is greater. Doctors could appeal that through a binding
independent dispute resolution process, which the state Department of Managed
Health Care will establish.
The bill, passed by the General Assembly on
the last day of the legislative session after months of tough negotiations, also
tightens requirements on health plans to offer adequate provider networks. A
similar bill that would have paid out-of-network doctors 100% of Medicare rates
failed last year.
Florida enacted a similar
law this year, joining New York, while Georgia
and other states are studying the issue or considering legislation.
Observers predicted the bipartisan passage of the California law would boost
legislative efforts in other states.
A recent Consumers Union survey
found that one-quarter of Californians who had hospital visits or surgery in the
past two years were charged an out-of-network rate when they thought their
provider was in-network.
Insurers and other payers faced pressure to come
up with a legislative solution because shocker out-of-network bills have undermined
public support for narrow-network health plans, which have become a primary
method of keeping premiums affordable. But physician groups continued to hold
out for freedom to refuse to join networks and balance bill when they think
plans aren't offering adequate rates.
Earlier this week, the California
Medical Association adopted a neutral rather than an adversarial position on the
bill while still expressing concerns about whether it would reduce patients'
access to physician services. Groups representing plastic surgeons,
cardiologists and anesthesiologists strongly opposed the bill. The California
Hospital Association and the California Association of Health Plans did not
declare a position.
gWe understand that these are some of strongest
consumer protections in nation,h said Anthony Wright, executive director of
Health Access California, which pushed for the bill.
Wright said there
was an urgent need for this consumer protection because more lower-income people
are buying insurance and they can't afford a large unexpected bill. gA surprise
medical bill is not just an injustice but it's financial destabilizing,h he
said. gIf you're making $30,000 or $40,000 a year, a surprise bill of $2,000 is
next month's rent.h