New balance billing legislation addresses CDA concerns

California lawmakers, consumer advocates, medical provider groups and health insurers continue their longstanding efforts to pass legislation that would both protect patients from balance billing for nonemergency out-of-network care received in a hospital or clinic and maintain fair billing practices for health care providers. Assembly Bill 72 (Bonta, D-Alameda) is the current best hope for appeasing all stakeholders.

AB 72 addresses the concerns CDA had with a previous proposal considered last year. That legislation, AB 533, authored by Assemblymember Rob Bonta, attempted a well-intentioned fix for consumers, but CDA stepped in to actively oppose it because it greatly missed the mark on provider protections.

Most notably, late amendments to the bill would have limited provider payments in these balance billing cases to Medicare reimbursement rates, despite the fact that Medicare does not cover many dental services and pays far less than commercial rates. It also would have required that providers go through an undetermined dispute resolution process to collect additional payment, unless the patient were to provide written consent to pay out-of-network costs three business days in advance of treatment.

The bill failed to pass in a full Assembly vote.

As a compromise proposal to address the concerns with AB 533, a group of bipartisan legislators, including Assemblymember Jim Wood (D- Healdsburg), DDS, introduced AB 72 after extensive discussions with stakeholders.  

AB 72 furthers consumer protections while also making it easier for physicians to resolve reimbursement problems with insurers. The bill tackles a root problem: large numbers of patients are being billed for out-of-network services that they were not informed of and did not agree to. Under this bill, out-of-network physicians providing treatment at an in-network hospital or clinic must receive a patient's voluntary consent to be treated for out-of-network care at least one day before the treatment.

Patients who do not consent to the treatment could not be billed for more than the in-network cost sharing, and out-of-network doctors would instead be reimbursed at either a Medicare-based or insurance-based rate, whichever is greater.

Because many dental services are not covered by Medicare or general health insurance, and because dentists were not an intended target of the legislation, CDA successfully advocated for their exclusion from the bill. The vast majority of dental services are not provided in hospitals where these types of problematic balance bills occur. Section 1371.9, added to the Health and Safety Code, states "'Noncontracting individual health professional' means a physician and surgeon or other professional who is licensed by the state to deliver or furnish health care services and who is contracted with the enrollee's health care service product. For this purpose, a 'noncontracting individual health professional' shall not include a dentist, licensed pursuant to the Dental Practice Act."

CDA is pleased that a compromise has been reached that allows patients to receive stronger protections from surprise bills while balancing the needs of health care providers and health plans.

CDA will keep members informed about the status of AB 72 at cda.org and in the CDA Update.

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