Earlier this year, Laurie Kirkland of Laguna Beach was taken by surprise when she received medical bills for her husband’s spinal surgeries. Their Blue Shield insurance deductible had been met, and the surgeon at Cedars-Sinai Medical Center was in-network.
The bills, she soon found out, were from an assistant surgeon who was out-of-network, meaning the surgeon had no contract with their insurer. Kirkland and her husband faced $9,000 in charges. After they contested the bills, their insurer agreed to cover $3,000 of what they owed — leaving them with a big debt.
“I didn’t even know there was an assistant surgeon in the room,” Kirkland said. “I can’t afford to pay the bills.”
Legislation designed to protect Californians like the Kirklands from surprise medical bills could be considered in the state Senate as early as Thursday. A similar bill failed last year, but patient advocates believe this measure has a strong chance of moving forward.
Similar measures are being debated in several other states, and Florida recently passed a law exempting patients from having to pay the surprise bills.
The California bill, whose main author is Assemblyman Rob Bonta (D-Oakland), addresses medical bills for non-emergency services. Doctors providing emergency care are prohibited under state law from billing patients for costs that insurers don’t cover.
Thousands of Californians are receiving unexpected bills for out-of-network services not covered by their insurers, Bonta said.
This happens when patients go to an in-network hospital or other facility, but receive care there from an out-of-network provider. Surprise medical bills most frequently involve services from anesthesiologists, radiologists or pathologists, patient advocates say.
“It’s an all-too-common problem,” Bonta told California Healthline. “When people get a medical procedure from an out-of-network provider, they get stuck with an expensive bill that threatens their financial security.”
And most of the time, patients have very little knowledge of, or control over, the situation. According to Bonta’s legislation, patients seeking services at a hospital or facility that is in their insurance network should be responsible for paying only the in-network rate for doctors’ services.
The bill would require insurers to reimburse out-of-network providers 125 percent of the amount Medicare pays for the same service or the insurer’s average contracted rate for the service, whichever is greater.
“Everyone, including doctors, the [health] plans and consumer advocates, agree we should be protecting consumers,” Bonta said. “But how is the provider going to be paid, by whom and how much — it is very difficult to come to an agreement on this part.”
The California Medical Association has raised concerns that the measure would significantly reduce payments to physicians.
The California Association of Health Plans took a neutral position on the bill but is mindful of affordability and wants to ensure the bill doesn’t inadvertently increase health insurance premiums, said Nicole Evans, the industry group’s spokeswoman.
“We want to reach a point where consumers don’t have to worry, and physicians and plans could work together to resolve the issue,” Evans said.
Last year, the Consumer Reports National Research Center conducted a national survey that found nearly one-third of privately insured Americans received a surprise medical bill in which their health plan paid less than expected. Among those respondents, nearly one out of four got a bill from a doctor they did not expect to get a bill from. The survey also showed that 63 percent of patients assume that doctors at an in-network hospital are also in-network.
Betsy Imholz, San Francisco-based special projects director at the advocacy group Consumers Union, which publishes Consumer Reports, said too often people hit with surprise medical bills do not contest them. Instead they end up paying hundreds or thousands of dollars.
One of the best features of Bonta’s bill, Imholz said, is that if the consumer does end up paying out-of-network prices, the consumer would be eligible for a refund on anything paid beyond the in-network cost.
Bonta also sponsored last year’s bill, which stalled before reaching the governor’s desk. This bill is more of a compromise, taking into consideration doctors’ and insurers’ concerns, Bonta said. The reimbursement rate for out-of-network providers is higher in this new bill, he said, calling it more “fair.” He thinks the revised proposal has a better chance because of its bipartisan support.
If approved, the bill, which has been amended by the Senate, will go back to the Assembly for a possible hearing by a health committee, according to Bonta’s office. The deadline for bills to be approved by the legislature is Aug. 31.