Legislature May Require Insurers To Track Patient Cost-Sharing

Californians may no longer be required to tabulate and file their out-of-pocket expenses for reimbursement if a new Senate bill passes its final review in the California Legislature over the next few weeks.

SB 1176 by Sen. Darrell Steinberg (D-Sacramento) would shift the responsibility of cost-tracking from patients to insurers.  The bill has passed the Senate and now is before the Assembly Committee on Appropriations. Its fate likely will be decided by the end of the month.

In addition to requiring health plans and insurers to monitor out-of-pocket expenses incurred by enrollees, the bill would also require companies to notify consumers when they have met their limits related to copay, coinsurance, deductible and other out-of-pocket expenses. Insurers would also be required to automatically reimburse patients who go over the limits established by the Affordable Care Ac.  

“SB 1176 is an important measure for consumers,” Steinberg said in a written statement. “It requires uniform reporting on these expenditures from the health plans and insurance companies and gives consumers added protection by providing patients with information that will safeguard Californians from inadvertently paying inappropriate out-of-pocket expenses.”

The ACA established out-of-pocket maximum expenses for consumers. In California, the limit this year is $6,350 for an individual, or $12,700 for a family of four. The limits increase annually if health care costs rise.

The bill analysis noted that understanding and filing for benefits can be a confusing and time-consuming process for consumers, especially for those who do not speak English as a first language. According to summary text from the bill, consumers who are unable to track their expenses may end up paying more by accident, and subsequently have difficulties getting their reimbursement as a result of poor record-keeping.

“Patients with big medical expenses have enough to deal with,” said Anthony Wright, executive director of Health Access California. “They shouldn’t have to keep all their medical receipts in a shoebox to get the benefit of the out-of-pocket maximum in the Affordable Care Act.”

Opponents say that applying legislation to the difficult task of tracking cost-sharing isn’t necessarily the best solution. The California Association of Health Plans and the Association of California Life and Health Insurance Companies have formally opposed the bill.

“From our perspective, this doesn’t reflect the reality of the California delivery system,” Nick Louizos, director of legislative affairs at CAHP said at the June 17 Assembly hearing. “Given the delegation of medical management from medical doctors, the plan does not always know in real time when services have been rendered, or what has been paid in terms of share of costs.”

Louizos also said few integrated systems  allow for real time transfer of information and that implementing the bill would be a costly undertaking, particularly  the notification requirement.

“This may not take into account what is happening at the ground level,” Louizos said. “We just fear that a premature legislative solution can hamstring innovation and result in increased costs and administrative barriers in our plans at a time when we are under a lot of pressure to keep costs down.”

Both CAHP and ACLHIC support the Legislature-convened workgroup examining cost-share tracking possibilities.

Consumer advocates say the difficulty in tracking is the crux of the issue and is exactly why it should fall on the shoulders of insurers and providers rather than patients.

Wright said the bill especially could help patients with the highest out-of-pocket costs, people with chronic diseases such as HIV/AIDS or multiple sclerosis.

“The insurers oppose it, naturally, because they say that it is hard to figure all of that out,” said Wright. “That is exactly our point. If they — who have all of the information and computer systems and agreements to deal with it — think it’s hard, how hard must that be for the patient?”

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