By Tam Ma, Policy Counsel, Health Access California
AB 72 (Bonta, Bonilla, Dahle, Gonzalez, Maienschein, Santiago, Wood) is being heard in the Senate Health Committee Wednesday, June 29, 2016.
Patients know they have to follow their health plan or insurer’s rules and go to in-network providers and facilities to keep their out-of-pocket costs low. Unfortunately, many patients end up getting a surprise medical bill for hundreds or thousands of dollars from an anesthesiologist, radiologist, pathologist or other specialist who turns out to be an out-of-network provider; one the patient probably never met, did not choose, and often had no control over selecting.
Health Access and Consumers Union have heard from hundreds of consumers who have received surprise medical bills in spite of doing their homework and making sure they were getting care at an in-network facility:
Cassie R. was diagnosed with breast cancer a year ago and needed a minor surgery after a mastectomy. Although she made sure the outpatient clinic was in network, she ended up getting a $600 surprise bill from an anesthesiologist. Watch this CBS news story about Cassie’s surprise bill and how it affected her finances.
When Sarah had a baby in June 2015, she researched her options and chose an in-network hospital. She ended up having an unplanned C-section and was surprised when she received a $1,050 bill for the out-of-network anesthesiologist.
“I’m grateful that my baby girl is healthy and that my delivery went well, but I had no idea the anesthesiologist would be out-of-network and not covered by my insurance. That unexpected additional $1,050 bill was a burden on our budget.”
Jen has a hereditary blood vessel disease that can cause brain damage or a stroke. In 2015, Jen had a stroke that required brain surgery, which she had at an in-network hospital with an in-network brain surgeon. However, after the surgery, they received $808 in bills from an out-of-network neurologist.
“We had no idea this was going to happen—and Jen’s husband was there the whole time,” shared Becca, Jen’s mother-in-law. “It’s frustrating and unfair that she never had the chance to be seen by an in-network neurologist in the first place. We just don’t have the money to pay for this. All our money has been spent on premiums, which are supposed to cover this. And when you go in for major surgery, you don’t have resources to deal with surprises like this.”
Surprise Medical Bills Burden California Consumers
Each year, thousands of Californians like Cassie, Sarah, and Jen receive surprise out-of-network bills despite following their health plan or insurer’s rules. In 2015, a Consumer Reports National Research Center survey found that 1-in-4 privately insured Californians face surprise medical bills, which wreak havoc on people’s finances and their ability to pay for basic necessities. A recent Kaiser Family Foundation survey found that 61% of those with medical bill problems say they have difficulty paying other bills as a result of their medical debt and more than a third (35%) were unable to pay for basic necessities like food or housing. Just last month, the Federal Reserve said that nearly half of U.S. households reported they would have trouble meeting emergency expenses of just $400.
AB 72 Protects Consumers from Surprise Out-of-Network Bills.
AB 72 ensures that consumers are not on the hook for surprise bills from out-of-network charges that were outside of their control. Specifically, among other consumer protections, the bill:
Requires health plans to let consumers pay the same co-pays and other cost sharing that they would pay for in-network care when they end up being treated by an out-of-network provider at an in-network facility.
Protects consumers from having their credit adversely affected, wages garnished, or liens placed on their primary residence.
Allows a consumer to voluntarily consent to an out-of-network provider if the consumer is enrolled in a PPO with out-of-network benefit and specified procedures are followed.
AB 72 keeps our health care costs under control.
Insurers must reimburse out-of-network doctors a fair rate for their services: 125% of Medicare or the insurer’s average contracted rate, whichever is greater. As a result, doctors are assured a minimum payment in statute, and they can appeal to the state’s Independent Dispute Resolution Process (IDRP) if they want a higher payment.