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Paul Zimmerman

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Physician Alert: CA Balance Billing Legislation Signed Into Law

California Governor Jerry Brown has signed into law a bill that is meant to address the issue of balance billing patients when they receive non-emergency medical services from an out-of-network physician at an in-network facility. The bill, AB 72, has been on a fast track through the California legislature despite criticism from some segments of the medical provider community. Providers should be aware of this legislation, as it could significantly impact your business.

The full text of the bill is available HERE.

Key elements of the law include:

  • Plans must pay out-of-network providers the greater of average contract rates or 125% of Medicare, adjusted annually for inflation.
  • Assignment of benefits is still authorized.
  • There is a binding, independent dispute resolution process that will be established and monitored by the California Department of Managed Care (DMHC) and California Department of Insurance (DOI).
  • Emergency services are exempted. However, it appears that Anesthesia and Hospitalist services (both non-emergency) would be covered.
  • A non-contracting health professional may not bill or collect any amount directly from the patient, except by written consent (as noted below).
  • Non-contracting health professionals may directly bill patients that have out-of-network coverage only where the patient consents, in writing, no less than 24 hours prior to the scheduled procedure (in which case the above-referenced payment formula would not apply).

It should be noted that the above payment formula represents a minimum, and providers may challenge it through the binding dispute resolution process. However, this ostensibly pro-consumer legislation places some medical providers in an increasingly difficult position vis a vis health plans, as they now have one less tool by which to seek fair payment for their often life-saving work. If you are a health care professional who routinely treats out-of-network patients, it is critical that you speak with qualified counsel who can critically assess your reimbursement options.

This blog post is not offered as, and should not be relied on as, legal advice. You should consult an attorney for advice in specific situations.