Have you ever gone in for a medical procedure you knew was covered by your health plan, only to be hit weeks later by a large, unexpected bill from a doctor whose name you didn’t even recognize?
If so, you’re not alone. More than one in five Californians with private health insurance reported receiving “surprise” medical bills at least once over the previous two years, according to a 2015 Consumer Reports survey.
Today in Sacramento, consumer advocates will launch a campaign they hope will eliminate such surprises. Legislation introduced last year by Assembly member Rob Bonta (D-Oakland) is back, after falling just three Assembly votes short of passage in 2015.
The California Medical Association is fighting Bonta’s bill, and it is busy preparing a plan of its own with a different approach to the problem — one that puts more of the financial onus on insurers and gives doctors a better deal.
At issue: the practice at many hospitals and outpatient surgery centers of using doctors not covered by a patient’s insurance plan — specialists such as anesthesiologists, pathologists and radiologists — for procedures that are otherwise covered.
Because health plans typically pay a small fraction of the charges by these “out of network” specialists, consumers get saddled with their bills. And what they charge is often a lot more than what the insurers pay their in-network docs.
Under Bonta’s proposal, health plans would pay these specialists more or less what they pay their covered physicians for similar care. The specialists would accept that level of payment and stop sending big bills to patients.
The CMA says this plan would put too big a squeeze on doctors’ pocketbooks. Instead, the association wants to set the payments in line with what the doctors charge.
Michael Dondero of Long Beach has experienced the unsettling feeling of coming home to a large, unexpected medical bill. He had hernia surgery last year that was pre-approved by his health plan, held in a hospital covered under the plan and performed by a physician who was also part of the covered network.
“And yes, it went fantastic,” Dondero said. “I’m feeling a lot better now.”
But about a month after the surgery, Dondero received something that didn’t make him feel so good: an unexpected bill for $771. It turned out the anesthesiologist on duty during his procedure was not covered by his insurance.
“To me it was a real eye-opener,” Dondero said. “I just assumed an in-network procedure at an in-network hospital would be covered. But you know what happens when we assume.”
Dondero appealed to his insurance company, and after a month of back and forth letters and phone calls, he ended up paying a much smaller amount.
Both the Bonta bill and the proposal being drafted by the physicians’ association share the goal of ensuring that patients won’t get the kind of unwanted surprise that landed in Dondero’s mailbox.
But after that, the plans diverge. Bonta’s plan is more palatable to the health plans than the one being crafted by the medical association, which would claw back the financial advantage for specialist doctors.
Many specialists say the benchmark established by Bonta’s bill is far too low, claiming it would cut physician compensation by two-thirds.
In Bonta’s plan, physicians who think they were underpaid can appeal through an independent review.
Still, the medical association argues that the bill essentially penalizes doctors for insurer networks that are too small to meet the needs of patients. Doctors should not be forced to pick up the slack when health plans don’t have enough specialists to perform the medical services they’ve promised to cover, the association says.
Janus Norman, a senior vice president of the CMA, says the Bonta bill would create a disincentive for health plans to negotiate reasonable rates with providers.
The crux, Norman said, is whether surprise bills are ultimately the responsibility of the health plans or the doctors who generate them.
Bonta said the argument is not that simple, and that he has spent a year trying to find the middle ground between insurers and physicians.
“The challenge has always been getting reimbursed appropriately, and that’s where the fight has been,” Bonta said. “It’s not fully within the ambit of plans to determine who’s in the network, and it’s not fully in the ambit of providers to determine that.”
But one thing is clear, he said: “You can’t punish the patient if they do everything right. They schedule it in advance; it’s in the network. It’s not on the patient to find out which providers that day are in the network or not.”
Health Access California, a consumer advocacy group based in Sacramento that is sponsoring the Bonta bill, expects to announce today that the California Labor Federation has signed on as co-sponsor. Anthony Wright, executive director of Health Access, said he hopes this expanded support will help tip the scale in favor of the bill’s passage.
Wright argued that physicians bear a substantial share of responsibility for the surprise bill problem, and that they have stood in the way of fixing it. So now they should be willing to work out an arrangement that suits everyone, he said.
“We are working to end surprise billing, yet the California Medical Association has delayed and held that process hostage for a year to demand high reimbursement rates for its members,” Wright said. “We’ve put a lot of options on the table, and CMA has rejected all of them.”
Norman countered that doctors do want to fix the problem, but that the cause of it is the increasingly restricted choice of providers offered by health plans.
The medical association’s plan to get higher rates for doctors, based on an average of what similar physicians charge, is a method already employed in other states, including New York and Connecticut.
Bill Barcellona, chief lobbyist at the California Association of Provider Groups, which represents physicians that negotiate with insurance companies, said the proposal could throw the payment system out of whack, with some physicians receiving rates “200 percent higher” than what they currently get.
Bonta said he hopes to negotiate a compromise but won’t tolerate an attempt by the medical association to push its own agenda at the risk of undermining the main objective of eliminating surprise bills for consumers.
He said he is prepared to counter the competing proposal from the association, if necessary, by pushing his own bill through quickly — possibly as early as April.
“It isn’t my preference to push this over the finish line, but we will do that if we’re pushed,” he said.
Dondero said his surprise bill blindsided him a little, but that in retrospect it shouldn’t have. He urged others to contest such bills, like he did.
“I think usually when other people get that bill, they just pay it,” he said. “But you can fight it. The thing is, you don’t take ‘no’ for an answer the first go-round.”