Last week the Brookings Center on Health Policy released a new report on surprise medical bills in America, and how policymakers can protect patients from them. The report discusses how California’s newly signed law on surprise medical bills, AB 72, could be a model for other states to follow.
Last month, Governor Jerry Brown signed Assembly Bill 72, which protects health consumers in California from getting surprise medical bills from out-of-network providers, when they do the right thing and receive care at in-network facility. Health Access also released a fact sheet detailing the exactly what consumer protections will be enacted.
The best way to understand just what this law will mean for Californians is to talk to one of the people whose life has been affected by surprise bills.
Pieter Kark, from San Mateo, was in the hospital in November of 2015 for a heart valve replacement. During his recovery in the hospital, he started experiencing trouble walking, he felt uncoordinated, and his blood pressure and sugar levels dropped. The hospitalist on-call thankfully was able to stabilize him. There was no way that Pieter could refuse this care, nor was there any way for him to double check that this doctor was in his network. He simply needed care at that moment – as any of us would.
After being discharged from the hospital, Pieter received a surprise medical bill of $1,500 from the hospitalist, who was out-of-network. He was shocked and outraged. He called his insurance company and hospitalist to complain, but nothing could be done – Pieter was on the hook for the full amount. Pieter himself is trained as a physician, and this practice of surprise billing runs contrary to his belief that insurance was designed to help the sick and take care of them. He is also on a fixed income, and has been forced to slowly pay off this medical bill creating a financial, emotional, and psychological burden.
Many consumers, like Pieter, do their homework. They check to make sure that the hospital they go to is in their network, and that their primary surgeon is also in-network. However, many of the specialists within the hospital: anesthesiologists, radiologists, pathologists, and hospitalists tend to be out-of-network, but patients are rarely notified. If Pieter had stopped and asked “are you in my network?” and she replied “no”, should he have been compelled to refuse life-saving care? That isn’t a position that patients and consumers should be forced into.
Luckily for consumers, AB 72 (which goes into effect July 1, 2017) includes a number of strong protections that will ensure that what happened to Pieter will not happen again in California:
- Consumers who go to an in network facility are only responsible for in-network cost-sharing. That payment will also count towards their deductible and maximum-out-of-pocket limit. This bill does not just protect patients in hospital settings, it protects consumers in ambulatory or other outpatient surgery centers, laboratories, and radiology/imaging centers.
- Stopping out-of-network doctors from billing or collecting more than the in-network cost-sharing. The doctor cannot bill the consumer until the insurance company relays the in-network cost-sharing. And, if the out-of-network doctor collects more than the in-network cost sharing, they must refund the consumer with interest.
- Stopping and preventing collections. Consumers will be protected from having their credit adversely affected, wages garnished, or liens placed on their primary residence due to these medical bills.
Ending the practice of surprise billing in California has been a multi-year battle. But we can finally say that California now leads the nation on consumer protections against surprise medical bills. Hopefully, more states will soon follow in California’s footsteps. Though the bill is not retroactive, for Pieter he’s happy to know that what happened to him won’t happen to anyone else.