Governor Weighs Legislation On Surprise Medical Bills

In California, it is not unusual for patients to be hit by large, unexpected medical bills when they are unwittingly treated by someone outside their insurance company’s network.

A 2015 survey by Consumers Union found that nearly 1 in 4 Californians who’d had hospital visits or surgery in the previous two years reported receiving an unexpected bill from an out-of-network provider. The issue can arise when a patient is treated in an in-network facility by out-of-network professionals.

After several failed attempts in recent years, the California legislature passed a bill, AB-72, which aims to protect patients’ pocketbooks when they’re hit by these surprise bills. Gov. Jerry Brown, who has until the end of September to act on the legislation, is expected to sign it into law.

The proposed law, by Assemblyman Rob Bonta (D-Oakland) and six colleagues, would limit a patient’s financial obligation to no more than what he or she would have owed if the provider had been in-network. The legislation also would require out-of-network providers to accept the amount the insurer normally pays a doctor who is on contract to provide such services, or 125 percent of the Medicare rate — whichever is greater.

The California Society of Anesthesiologists and other groups of specialty doctors oppose the bill, saying the proposed payment is not enough and that it would remove any incentive for insurance companies to offer contracts that physicians consider fair. That, in turn, would only perpetuate inadequate provider networks, the association argues.

Meanwhile, the powerful California Medical Association has shifted its opinion on the bill from opposed to neutral. It says the bill would create stricter oversight of in-patient services and impose tougher regulations on insurers if the state determines their provider networks to be wanting.

Listen to a radio report on the legislation by Southern California Public Radio health reporter Stephanie O’Neill, produced in partnership with NPR, KPCC and Kaiser Health News.

This story was produced by Kaiser Health News, an editorially independent program of the Kaiser Family Foundation.

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