After months of active debate, California has became the latest state to adopt a law to protect the commercially insured users from unexpected out-of-network medical bills. With this move, California has joined many other states that have adopted a so-called “surprise” medical bill law.
California’s bill A.B. 72 will take effect on January 1, 2017, and the law applies to commercially insured customers and not to MediCal (Medicaid in California) or Medicare enrollees or those beneficiaries who are insured under the ERISA plan.
The law was signed in September by California Governor, Jerry Brown (D-CA), and under the law, doctors who offer out-of-network care to the commercially insured patients at an in-network facility will be eligible to be reimbursed at a higher rate of 125 percent of the average contracted rate or the Medicare rate.
The bill also needs the state to form an independent dispute resolution process that will allow out-of-network health professional, or an insurer or plan, to appeal claim payment that are made under the law. In addition to that, the bill also calls for a process to track the average contracted rates.
As per the A.B. 72 bill, consumers cannot be balance-billed for medical care that was offered at an in-network facility by an out-of-network healthcare provider. This means that the law ensures that as long as the patient is treated in an in-network facility, they will not have to pay any money out of their pocket than the in-network cost sharing.
More attention is also offered to consumer complaints where the patient goes to in-network facility and receives bill for out-of-network services. Usually, this occurs when in-network hospitals have contracted with health care professionals and specialists who are not under in-network providers for the plan.
If some out-of-network physician group charges the patient more than what is covered by his or her plan, the provider will be able to bill the patient for the difference, even if the patient sought out an in-network facility. It is not yet clear if the actions of California will motivate other states to follow and we would have to wait and see how the healthcare providers take this bill.