BILL ANALYSIS Ó SENATE COMMITTEE ON HEALTH Senator Ed Hernandez, O.D., Chair BILL NO: AB 72 --------------------------------------------------------------- |AUTHOR: |Bonta, Bonilla, Dahle, Gonzalez, Maienschein, | | |Wood | |---------------+-----------------------------------------------| |VERSION: |June 15, 2016 | --------------------------------------------------------------- --------------------------------------------------------------- |HEARING DATE: |June 29, 2016 | | | --------------------------------------------------------------- --------------------------------------------------------------- |CONSULTANT: |Teri Boughton | --------------------------------------------------------------- SUBJECT : Health care coverage: out-of-network coverage. SUMMARY : Establishes a payment rate, which is the greater of the average of a health plan or health insurer's contracted rate, as specified, or 125% of the amount Medicare reimburses for the same or similar services, and a binding independent dispute resolution process for claims and claim disputes related to covered services provided at a contracted health facility by a non-contracting health care professional. Limits enrollee and insured cost sharing for these covered services to no more than the cost sharing required had the services been provided by a contracting health professional. Requires health plans and insurers to collect the enrollee/insured cost sharing and requires the plan/insurer to permit the enrollee/insured to assign payment of benefits to the health care professional. Existing law: 1)Provides for the regulation of health plans by the Department of Managed Health Care (DMHC) under the Knox-Keene Act and for health insurers by California Department of Insurance (CDI) under the Insurance Code. 2)Requires contracts between providers and health plans to be in writing and prohibits, except for applicable copayments and deductibles, a provider from invoicing or balance billing a plan's enrollee for the difference between the provider's billed charges and the reimbursement paid by the plan or the plan's capitated provider for any covered benefit. 3)Prohibits a provider, in the event that a contract has not been reduced to writing, or does not contain the prohibition above, from collecting or attempting to collect from the AB 72 (Bonta) Page 2 of ? subscriber or enrollee sums owed by the plan. Prohibits a contracting provider, agent, trustee or assignee from taking action at law against a subscriber or enrollee to collect sums owed by the plan. 4)Establishes, pursuant to regulations, requirements that health plans must implement in their claims settlement practice, including the meaning of "reimbursement of a claim," such that providers with a contract receive the contract rate. Claims for contracted providers without a written contract and non-contracted providers require payment of the reasonable and customary value for the health care services rendered based upon "statistically credible information" that is updated at least annually and takes into consideration the following: a) The provider's training, qualifications, and length of time in practice; b) The nature of the services provided; c) The fees usually charged by the provider; d) Prevailing provider rates charged in the general geographic area in which the services were rendered; e) Other aspects of the economics of the medical provider's practice that are relevant; and, f) Any unusual circumstances in the case. 5)Allows a non-contracted provider to dispute the appropriateness of a health plan's computation of the reasonable and customary value and requires the health plan to respond to the dispute through the plan's mandated provider dispute resolution process. 6)Requires health plans to pay for medically necessary services provided in a licensed acute care hospital, if the services were related to authorized services and provided after the plan's normal business hours, unless the plan has a system whereby it can respond to authorization requests within 30 minutes. 7)Prohibits a health plan from engaging in an unfair payment pattern, defined as, engaging in a demonstrable and unjust pattern, of reviewing or processing complete and accurate claims that results in payment delays; engaging in a demonstrable and unjust pattern of reducing the amount of payment or denying complete and accurate claims; failing on a AB 72 (Bonta) Page 3 of ? repeated basis to pay the uncontested portions of a claim within specified timeframes; and failing on a repeated basis to automatically include the interest due on claims, as specified. 8)Prohibits a hospital which contracts with an insurer, nonprofit hospital service plan, or health plan from determining or conditioning medical staff membership or clinical privileges upon the basis of a physician and surgeon's or podiatrist's participation or non-participation in a contract with that insurer, hospital service plan or health plan. 9)Defines 'emergency services and care" as medical screening, examination, and evaluation by a physician and surgeon, or, to the extent permitted by applicable law, by other appropriate licensed persons under the supervision of a physician and surgeon, to determine if an emergency medical condition or active labor exists and, if it does, the care, treatment, and surgery, if within the scope of that person's license, necessary to relieve or eliminate the emergency medical condition, within the capability of the facility; and to determine if a psychiatric emergency medical condition exists, and the care and treatment necessary to relieve or eliminate the psychiatric emergency medical condition, within the capability of the facility. 10)Requires a health plan, or its contracting medical providers, to provide 24-hour access for enrollees and providers, including, but not limited to, non-contracting hospitals, to obtain timely authorization for medically necessary care, for circumstances where the enrollee has received emergency services, and is stabilized, but the treating provider believes that the enrollee may not be discharged safely. Establishes additional requirements associated with treatment or transfer post stabilization. This bill: AB 72 (Bonta) Page 4 of ? Independent Dispute Resolution Process (IDRP) 1)Requires DMHC and CDI to establish an independent dispute resolution process (IDRP) for the purpose of resoling a claim dispute between a health plan or insurer and a non-contracting individual health professional, as specified, who has provided non-emergency services or treatment for an enrollee or insured at a contracted health facility, as specified. Requires both parties to participate in the IDRP and the decision to be binding on both parties. 2)Requires the parties to exhaust the plan's or insurer's internal process prior to initiating IDRP. 3)Permits the bundling of claims for the same or similar services provided by the individual health professional. 4)Permits, notwithstanding 1) above, a dissatisfied party to pursue any right, remedy, or penalty established under any applicable law. 5)Requires DMHC and CDI to establish conflict-of-interest standards for an IDRP contractor consistent with this bill and existing law, as specified. 6)Requires DMHC and CDI to provide, upon request of an interested person, a copy of all non-proprietary information, as determined by the director, or insurance commissioner, filed with DMHC or CDI by an independent organization seeking to contract to administer the IDRP. 7)Exempts Medi-Cal managed care health plans or any entity that enters into a contract with the Department of Health Care Services, as specified, from this bill. 8)Requires delegated entities to comply with this bill if a health plan or health insurer delegates payment functions, as specified. 9)Exempts emergency services and care from this bill. Payment Standard 10)Requires the plan or insurer to reimburse the greater of the average contracted rate or 125% of the amount Medicare reimburses on a fee-for-service basis for the same or similar AB 72 (Bonta) Page 5 of ? services in the general geographic region in which the services were rendered to a non-contracting individual health professional for services, as specified, unless otherwise agreed to by the parties. 11)Defines "average contracted rate" as the average of the contracted rates paid by the health plan, its delegated entity, or an insurer for the same or similar services in the geographic regions. 12)Requires each plan or insurer to provide to DMHC or CDI by July 1, 2017 in a manner and format specified by DMHC or CDI both of the following: a) Data listing its average contracted rates for non-emergency services most frequently provided in contracted facilities by non-contracting individual health professionals, as specified, in each geographic region in which the services are rendered, including the average contracted rates paid by the plan's delegated entities. b) Its methodology for determining the average contracted rates for these services. Requires the methodology to determine an average contracted rate to assure that the plan or insurer includes the highest and lowest contracted rates for these services. 13)Requires each plan's delegated entities to provide data listing its average contracted rates for these types of services in each geographic region in which the services are rendered. 14)Requires for each year thereafter, the plans, delegated entities and insurers to adjust the rate initially established in 10) - 13) above by the Consumer Price Index (CPI) for Medical Care Services, as published by the United States Bureau of Labor Statistics. 15)Requires DMHC and CDI to audit the accuracy of the information in 12) above. 16)Require DMHC and CDI to report by January 1, 2020 on data provided in 12) and 13) above to the Governor and Legislature, as specified. AB 72 (Bonta) Page 6 of ? 17)Requires a health plan or insurer to authorize and permit assignment of the enrollee's or insured's right, if any, to any reimbursement for health care services covered under the plan contract or insurance policy to a non-contracting individual health professional for these services. 18)Requires the plan or insurer to provide a form approved by DMHC or CDI for the purpose of 17) above. 19)Requires the payment made by the health plan or insurer and applicable cost sharing owed by the enrollee or insured to be payment in full for nonemergency services rendered, as specified, in this bill. 20)Prohibits the amount paid by a plan or insurer for services pursuant to this bill from constituting the prevailing or customary charges, for usual fees to the general public, or other charges for other payers for an individual health professional. Patient Out of the Middle 21)Limits enrollee or insured cost sharing to no more than the same cost sharing that the enrollee or insured would pay for the same covered services received from a contracting individual health professional (in-network cost sharing amount), if the enrollee or insured receives covered services from a contracting health facility at which, or as a result of which, the enrollee or insured receives services provided by a non-contracting individual health professional. Applies this provision to health plan contracts and insurance policies issued, amended, or renewed on or after January 1, 2017. 22)Requires the health plan or insurer to collect the in-network cost-sharing amount from the enrollee or insured. 23)Prohibits a non-contracting individual health professional from billing or collecting any amount from the enrollee or insured. Requires any communication to include in 12-point bold type that the communication is not a bill. 24)Requires the non-contracting individual health professional to affirm in writing that he or she has not attempted to collect payment from the enrollee or insured when submitting a claim to the plan or insurer. AB 72 (Bonta) Page 7 of ? 25)Requires a refund to the enrollee or insured with interest accruing at a rate 15% per annum after receiving payment from the plan or insurer, if non-contracting individual health professional has received any amount from the enrollee or insured for these services. 26)Requires cost sharing paid by the enrollee or insured to count toward the limit on annual out-of-pocket expenses, as specified, and any deductible. Voluntary Choice of Non-contracting Individual Health Professional 27)Requires the amount paid when nonemergency services are provided by a non-contracting individual health professional to an enrollee or insured who has voluntarily chosen to use his or her out-of-network benefit for services covered by a preferred provider organization or a point-of-service plan, to be the amount set forth in the enrollee's or insured's evidence of coverage, unless otherwise agreed to by the parties. Excludes this payment from the IDRP. 28)Permits a non-contracting individual health professional from billing or collecting from the enrollee or insured the out-of-network cost sharing, if applicable, only when the enrollee or insured consents in writing and the written consent satisfies the following: a) The enrollee or insured consents in writing at least 24 hours in advance of care; b) The consent is obtained separately from the consent for any other part of the care or procedure, and not obtained by the facility or its representative, at the same time as admission or at any time when the enrollee or insured is being prepared for surgery or any other procedure; c) A written estimate is provided at the time of consent of the enrollee's or insured's total out-of-pocket cost of care, based on the professional's billed charges, and the collection of more than the estimate without enrollee's or insured's consent is not allowed; d) The consent also must advise the enrollee or insured that he or she may seek care from a contracted provider or contact the plan or insurer to arrange to receive care from a contracted provider for lower AB 72 (Bonta) Page 8 of ? out-of-pocket costs; e) The consent and estimate is provided in the language spoken by the enrollee or insured; and, f) The consent advises the enrollee or insured that cost sharing may not count toward annual out-of-pocket maximum or deductible. 29)Provides that a non-contracting individual health professional who fails to comply with 27) and 28) above has not obtained written consent and therefore 21) - 25) above applies. 30)Establishes requirements on non-contracting individual health professionals on collections from enrollees and insureds and assignment of debt. 31)Defines "contracting health facility" to include but not be limited to a licensed hospital, an ambulatory surgery or other outpatient setting, a laboratory, a radiology or imaging center, or any other similar provider as DMHC or CDI may define, by regulation, as specified. 32)Defines a "non-contracting individual health professional" as a physician and surgeon, or other professional who is licensed by the state to deliver or furnish health care services and who is not contracted with the enrollee's health plan, but not a dentist, licensed pursuant to the Dental Practice Act. 33)Provides that 21) - 31) above shall not be construed to exempt a plan or provider from specified requirements including the holding in Prospect Medical Group, Inc., v. Northridge Emergency Medical Group (2009), that an emergency room physician is prohibited form billing an enrollee of a health plan directly for sums that the health plan failed to pay for the enrollee's emergency room treatment. FISCAL EFFECT : This bill has not been analyzed by a fiscal committee. PRIOR VOTES : ----------------------------------------------------------------- |Assembly Floor: |Not relevant | |------------------------------------+----------------------------| AB 72 (Bonta) Page 9 of ? |Assembly Appropriations Committee: |Not Relevant | |------------------------------------+----------------------------| |Assembly Health Committee: |Not Relevant | | | | ----------------------------------------------------------------- COMMENTS : 1)Author's statement. According to the author, AB 72 protects patients from surprise medical bills when they follow the rules of their health plan by going to an in-network hospital, lab, imaging center or other health care facility. Patients would only be responsible for their in-network cost sharing and would be prohibited from getting outrageous out-of-network bills from doctors they did not choose. Surprise medical bills wreak havoc on people's finances and their ability to pay for basic necessities. The bill also provides certainty for doctors and insurers and keeps our health care costs under control. Insurers must reimburse doctors a fair rate for their services, and doctors are assured a minimum payment in statute. The Affordable Care Act requires all consumers to have health coverage, and it is the state's responsibility to ensure patients are safeguarded from hidden costs unfairly imposed upon them when they have followed their insurers' rules. 2)Out-of-network services and surprise bills. A recent survey commissioned by the Consumer Reports National Research Center found that nearly one third of privately insured Americans received a surprise medical bill where their health plan paid less than expected in the past two years. Among the 2,200 adult U.S. respondents, nearly one out of four got a bill from a doctor that was unexpected. Survey findings also suggest that consumers overall seem largely confused when it comes to their rights to fight surprise bills. Based on the California respondents to this survey, one in four privately insured Californians faced surprise medical bills. One quarter of Californians who had hospital visits or surgery in the past two years were charged an out-of-network rate when they thought the provider was in-network. 63% assume doctors at an in-network hospital are also in-network. 3)Unfair claims practices. AB 1455 (Scott, Chapter 1827, Statutes of 2000) prohibits unfair claims practices, and the resulting regulations detailed requirements health plans must meet in processing and paying claims for both contracting and non-contracting providers. The AB 1455 regulations define AB 72 (Bonta) Page 10 of ? reimbursement of a claim for non-contracting providers as the "reasonable and customary value," based on statistically credible information that is updated at least annually, and that takes into consideration the following specified criteria: a) the provider's training, qualifications, and length of time in practice; b) the nature of the services provided; c) the fees usually charged by the provider; d) prevailing provider rates charged in the general geographic area in which the services were rendered; e) other aspects of the economics of the medical provider's practice that are relevant; and, f) any unusual circumstances in the case. These regulations codified the factors for determining non-contracted provider reimbursement as outlined in Gould v. Workers' Compensation Appeals Board, City of Los Angeles, (1992) 4 Cal.App.4th 1059, 1071. Consequently, the AB 1455 regulations are often referred to as requiring payments for non-contracting providers according to the "Gould criteria." More recently in Children's Hospital Central California v. Blue Cross of California et.al, (2014) 226 Cal.App4th 1260, 172. the appellate court determined that the Gould criteria includes more than the charges billed by the provider. Charges are just one data point and payments and rates accepted by other payors could also be considered. 4)IDRP. Both CDI and DMHC have voluntary IDRPs. CDI advises providers to first attempt to resolve disputes with the insurance company. According to CDI the insurer is required to resolve each provider dispute consistent with applicable law and issue a written determination within 45 working days after the date of receipt of the provider dispute. According to the DMHC, participation in IDRP is voluntary and non-binding. Parties are encouraged to comply with the decision issued by the IDRP External Reviewer. Non-contracted providers who deliver EMTALA-required emergency services ("Providers") working with health plans or capitated providers ("Payers") are eligible to submit a IDRP concerning the "reasonable and customary" value of services rendered. A provider may request review through the IDRP for an individual claim or for multiple claims (up to a total of 50 substantially similar claims.) Eligible claim disputes are those disputes that are subject to DMHC jurisdiction and meet each of the following four criteria: 1) the disputed claim is limited to emergency services rendered by non-contracted physicians or hospitals, 2) the services were rendered within the last four years, 3) the dispute is limited to disagreement AB 72 (Bonta) Page 11 of ? concerning the reasonable and customary value of the services rendered, and 4) the Provider has completed the Payer's dispute resolution process. 5)Related legislation. AB 533 (Bonta) would have required DMHC and CDI to establish a binding IDRP for claims for non-emergency covered services provided at contracted health facilities by a non-contracting health care professional. AB 533 limits enrollee and insured cost sharing for these covered services to no more than the cost sharing required had the services been provided by a contracting health professional; and requires the plan or insurer to base reimbursement for covered services on the amount the individual health professional would have been reimbursed by Medicare for the same or similar services in the geographic area in which the services were rendered. AB 533 failed passage on the Assembly Floor. SB 1252 (Stone) would have required when a medical procedure is scheduled to be performed on a patient, the general acute care hospital, surgical clinic, and the attending physician, as applicable, to notify the patient, in writing, of the net costs to the patient for the medical procedure being done, as provided, and requires disclosure, in writing, if any of the physicians providing medical services to the patient are not contracted with the patient's health care service plan or health insurer and the costs for which the patient would be responsible as a result. SB 1252 was held in the Senate Health Committee was set for hearing in the Senate Health Committee, but not heard per the request of the author. 6)Prior legislation. AB 1579 (Campos of 2012), would have required issuers to pay a non-contracting dental provider directly for covered services rendered to an enrollee or insured in certain circumstances. AB 1579 was set for hearing in the Senate Health Committee, but not heard per the request of the author. SB 1373 (Lieu of 2012), would have required, when an enrollee or insured seeks care from a non-contracting provider, the provider to provide a specified written notice to the enrollee or insured informing the enrollee or insured that the provider is not in the enrollee's or insured's plan or provider network, as specified. Would have prohibited a health facility or a provider group from holding itself out as being AB 72 (Bonta) Page 12 of ? within a plan network unless all of the individual providers providing services at the facility or with the provider group are within the plan network. This bill failed passage by the Senate Health Committee. SB 981 (Perata of 2008), would have prohibited non-contracting hospital ER physicians from directly billing enrollees of health plans licensed by DMHC under the Knox-Keene Health Care Service Plan Act of 1975, other than allowable copayments and deductibles, and would have established statutory standards and requirements for claims payment and dispute resolution related to non-contracting ER physician claims, including an IDRP. SB 981 was vetoed by Governor Schwarzenegger. The veto message is below: This bill does not solve the problem facing California patients and only serves to highlight one of the many reasons I introduced my comprehensive health care reform proposal. Californians are paying a hidden tax on their health care which subsidizes care for the uninsured and allows providers to shift costs when they are not fully reimbursed by their payers. The insured population bears the brunt of this hidden tax and the larger it gets, fewer people are able to afford coverage. This bill, in essence, asks for California to embrace this cost-shift, reward non-contracting physicians by assuring their continued financial slice of the pie, and allow the status quo to continue. I cannot agree to a measure that is a piecemeal approach to our broken health care system. Our health care system relies on physicians, hospitals and health plans to work together. The patient that pays health insurance premiums should not be part of a payment dispute between these sophisticated market players. It is unfortunate that this bill takes sides in the dispute within the health care industry instead of taking the side of patients. Until the Legislature can send me legislation that removes that patient from all disputes involving these parties, I direct my Department of Managed Health Care to aggressively continue in its efforts to identify AB 72 (Bonta) Page 13 of ? unfair payment practices and keep patients from being caught in the middle. AB 1203 (Salas, Chapter 603, Statutes of 2008), established uniform requirements governing communications between health plans and non-contracting hospitals related to post-stabilization care following an emergency, and prohibits a non-contracting hospital from billing a patient who is a health plan enrollee for post-stabilization services, except as specified. AB 2220 (Jones, 2008), would have allowed parties to a contract negotiation between ER physicians and health care service plans or their contracting risk bearing organization to, on a one-time basis per contract negotiation, invoke a mandatory mediation process to assist in resolving any remaining issues in the contract negotiations, as specified. AB 2220 was vetoed by Governor Schwarzenegger. The veto message is below: "I applaud the author for seeking to address one of the most important consumer issues facing patients today. This bill attempts to change the market dynamic in a way that encourages contracts between health plans and providers. It is a good starting point. Unfortunately, it does not contain the comprehensive solution that patients need and deserve when it comes to addressing the disgraceful practice of balance billing. I believe the author and Administration can work together to solve this issue next year. I look forward to our combined efforts that will take the patient out of the middle of these payment disputes." AB 2839 (Huffman of 2008), would have prohibited a health plan or health insurer from requiring providers to execute unfair and unreasonable contracts, as specified, as a condition of entering into negotiations with the health plan or insurer. AB 2839 was held on the Assembly Appropriations Committee Suspense file. SB 389 (Yee of 2008), would have prohibited a hospital-based physician, as defined, from seeking payment from individual AB 72 (Bonta) Page 14 of ? enrollees for services rendered and would have required such physicians to seek reimbursement solely from the enrollee's health care service plan or the contracting risk-bearing organization. Also the bill would have required DMHC and CDI, on or before March 1, 2008, to implement an independent provider dispute resolution system, in consultation with representatives of health plans or insurers, providers, and consumer representatives. SB 389 died in the Senate without a committee hearing. SB 697 (Yee, Chapter 606, Statutes of 2008), prohibits a health care service provider from seeking reimbursement for services furnished to a person enrolled in the Healthy Families Program or the Access for Infants and Mothers Program from other than the participating health plan covering that person. AB 1X 1 (Nunez of 2008), would have enacted the Health Care Security and Cost Reduction Act, a comprehensive health reform proposal. Among other provisions related to health insurance markets and hospital financing, AB 1X 1 would have prohibited a non-contracting hospital from billing any patient, who has coverage for emergency and post stabilization health care services, for those services, as defined, except for applicable copayments and cost sharing. AB 1X 1 died in the Senate Health Committee. SB 417 (Ortiz of 2005), would have prohibited a hospital-based physician, as defined, from engaging in a pattern of billing a patient for covered services in excess of applicable co-payments, deductibles or coinsurance, unless specified conditions are met, and required providers to provide specific notice requirements when they send a bill or statement to a patient. SB 417 died in Assembly Health Committee. SB 364 (Perata of 2005), would have allowed an emergency physician who has a contract with a health plan, but does not have a contract with a medical group or other entity that has been assigned responsibility for paying claims by the health plan, to submit a claim to the plan, and requires the plan to pay the claim to the terms of the contract. SB 364 died on Assembly floor. AB 1321 (Yee of 2005), would have prohibited hospital-based anesthesiologists, radiologists, pathologists, and emergency AB 72 (Bonta) Page 15 of ? room physicians, or a group of such physicians, from seeking payment for services, other than allowable copayments and deductibles; from individual enrollees of a health plan. AB 1321 was held on the Assembly Appropriations Suspense File. SB 367 (Speier, Chapter 723, Statutes of 2005), enacted the Patient and Provider Protection Act in the Insurance Code and revises the way complaints from health care providers about health insurers are handled by CDI. AB 755 (Chan of 2005), would have required provider contracts entered into with contracting agents, as defined, to include specific provisions and would have prohibited contracting agents from selling, leasing, assigning, transferring, or conveying a list of contracted providers and their discounted rates to any entity that is not a payer. AB 757 died on the Assembly Appropriations Suspense file. AB 1686 (Pacheco of 2004), would have encouraged county medical societies to establish a process to resolve billing disputes between a contracting provider group and a non-contracting provider group. AB 1686 died in the Assembly. AB 2389 (Koretz of 2003), would have required a health plan or health insurer that owns a preferred provider organization to pay non-contracting physicians a reasonable and customary fee for hospital-based anesthesiology, radiology, or pathology services provided to the plan's enrollees. Would have prohibited those physicians from balance billing an enrollee for any charge that exceeds the reasonable and customary fee. AB 2389 died in the Senate. AB 2907 (Cohn, Chapter 925, Statutes of 2002), established the Health Care Providers Bill of Rights and prohibits certain provisions in contracts between a health plan or a health insurer and a health care provider. AB 1455 (Scott of 2000), bars health plans from engaging in unfair payment patterns in the reimbursement of providers. AB 1455 also includes a number of other provisions regarding payment practices of health plans, including requiring health plans to make their dispute resolution process available to non-contracting providers. 7)Support. Health Access California writes that patients know AB 72 (Bonta) Page 16 of ? 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 out-of-network, one the patient never met, did not choose, and often has no control over selecting. These surprise bills do not count toward the annual out-of-pocket maximum so a consumer can find themselves exposed to costs well in excess of $6,600 a year. The California Labor Federation indicates patients may not even be able to rely on their hospitals to tell them if they will be treated by an out-of-network doctor, since doctors are not direct employees of most hospitals, they are independent contractors and not all necessarily in the same network as the hospital. The Affordable Care Act was supposed to reduce medical debt and bankruptcies. Surprise bills threaten to undo that work by subjecting patients to astronomically high bills they were not expecting. This bill takes the burden off of patients of dealing with surprise bills and negotiating with the provider. Consumers Union writes health insurance coverage should provide protection against overwhelming medical bills and debt. Consumers should not pay the price for the complicated relationships between doctors, facilities and health plans. This bill is a balanced solution that protects patients from unfair surprises, while also requiring insurers to reimburse out-of-network doctors at in-network facilities fairly, at a minimum, the greater of the average contracted rate or 125% of Medicare. It also allows doctors to appeal for a higher payment through a streamlined IDRP. 8)Opposition. The California Medical Association (CMA) writes that this bill does provide a framework for a comprehensive, fair solution to the surprise billing issue, but amendments are needed to complete the legislation. In order to provide some balance, CMA indicates this bill contains a provision whereby the health insurance plan shall collect any in-network cost sharing amount a patient is responsible for if they receive out of network care pursuant to this bill. CMA believes this provision is essential in providing balance between the physicians and health insurance companies as well as clearly details for the consumer to what portion of the care they are required to pay. Health plans and insurers collect premiums and pay claims according to contracts they sign with enrollees and medical providers, billing is the core AB 72 (Bonta) Page 17 of ? of their business. CMA has great concerns about the health plans and insurers using their own methodology to determine what their average contracted rate should be as each plan could create their own metrics in determining the average contracted rate. CMA asks that a consistent standard be applied to all health insurance plans that actually reflects the average rate paid for each in-network service in a given year and have provided the authors and the committee with language to that effect. CMA believes that on-call specialists who provide post stabilization service should be exempted from this bill. Physicians volunteer to participate in on-call panels and provide care to all patients regardless of ability to pay or insurance coverage similar to emergency room physicians. One unintended consequence of this bill would be to limit access to on-call specialists who will become more reticent to volunteer. The California Chapter of the American College of Cardiology believes this bill is an improvement over AB 533 but has a number of concerns that the bill may adversely affect the ability of patients to receive quality care in a time fashion. The determination of average contract rates is problematic. The geographic regions are way too broad and may not reflect the local cost of care or local reimbursement levels. Contracted rates with the largest physician groups would be averaged with contract rates from solo physicians and both lead to lower reimbursements rates for non-contracted physicians. This will lead to a high volume of IDRP claims, and the IDRP process remains largely undefined. No payment standard is set (recommend Gould), no fees are established and both parties are required to pay. If the fees are too high it will be a barrier to physician participation. The losing party should pay the fees. The consent and estimate process is problematic and they support CMA's amendments to fix language spoken and updating the estimate if complications occur. 9)Policy comments. a) Differences between AB 533 and AB 72. The most significant difference between AB 533 and AB 72 is the payment standard. AB 533 would have set the payment standard at the Medicare payment rate. AB 72 sets it at the greater of 125% of Medicare or average contracted rates of each health plan based on a single benchmark year with an annual adjustment equal to the consumer price index for medical care services. In addition to AB 72 (Bonta) Page 18 of ? this higher payment standard, AB 72 allows non-contracted individual health professionals to receive assignment of benefits, which requires the health plan or insurer to make payment directly to the provider rather than issuing payment to the patient who in turn pays the provider. AB 72 allows either party to pursue legal remedies if dissatisfied with the IDRP. AB 72 requires the health plan or insurer to collect the copays from the patient, instead of the provider. The burden of collecting copayment would remain on contracting providers. Amendments drafted by the authors would delete this provision from the bill. AB 72 allows for a 24 hour consent period prior to a patient voluntarily choosing a non-contracted individual health professional, rather than the "at least three business days" required in AB 533. AB 72 limits the reporting of adverse information to consumer credit reporting agencies and prohibits wage garnishment or liens on primary residences. b) How is average contracted rate determined? The bill requires the methodology to include the highest and lowest contracted rates in order to prevent the rates from being weighted in favor of large, dominant provider groups who can command higher prices. The bill also requires the methodology to be provided to the departments along with data listing average contracted rates for services most frequently subject to the bill. The departments are given authority to audit the information provided by the plans and insurers. Amendments requested by the opposition and accepted by the authors clarify that the rates are based on contracted commercial rates. However, it is not clear what authority the departments will have to require use of a consistent methodology, if necessary. c) Is a guaranteed raise in rates appropriate and if so, by how much? The bill includes an adjustor to the average contracted rate benchmark of the CPI for Medical Care Services. Medical Care Services is organized into three components: Professional Services, Hospital and Related Services, and Health Insurance. Some have suggested it would be more appropriate to use the CPI for Professional Services, which is more specific to physicians, dentists, eye care providers, and other medical providers. AB 72 (Bonta) Page 19 of ? 10)Amendments requested by the authors. The Assemblymembers authoring this bill request the Senate Health Committee adopt amendments contained in the attached mock-up. The amendments would: a) Require the plan and insurer to implement the determination obtained through the IDRP. b) Clarify that the payment standard is based on the average of the contracted commercial rates paid by the health plan or insurer. c) Clarify that the base payment year for the average contracted rates is 2015 and that the CPI for medical care services adjuster be applied for each year after December 31, 2015. d) Require data on average contracted rates provided to DMHC and CDI to be confidential and not subject to the Public Records Act. e) State that the payment made pursuant to this bill is payment in full unless either party uses the IDRP or other lawful means pursuant to 4) above in the bill summary. f) Clarify that this bill does not apply to emergency services and stabilization, as specified. g) Delete the requirement that the health plan or insurer collects the copayment. h) Require the plan or insurer to notify the non-contracting individual health professional of the in-network cost sharing owed by the enrollee or insured. i) Permit the non-contracting individual health professional to collect only the in-network cost sharing owed by the enrollee or insured. j) Permit the non-contracting individual health professional to affirm that she or he has not attempted to collect any payment from the enrollee or insured other than in writing. aa) Require any overpayment from the enrollee or insured to be refunded within 30 days of receiving notice from the plan of the in-network cost-sharing amount. bb) Permit the collection of more than the written estimate of the enrollee or insureds total out-of-pocket cost of care when voluntarily choosing the services of the non-contracting individual health professional if circumstances arise during the delivery of services that were unforeseen at the time the estimate was given that AB 72 (Bonta) Page 20 of ? would require the provider to change the estimate. cc) Require the consent and estimate for voluntary services to be provided in the language spoken by the enrollee if the language is a Medi-Cal threshold language, as specified. dd) Delete "any other similar provider as DMHC or CDI may define, by regulation, as a health facility for purposes of this bill," in the definition of contracted health facility. ee) Delete "that an emergency room physician is prohibited from billing an enrollee of a health care service plan directly for sums that the health care service plan has failed to pay for the enrollee's emergency room treatment," from the reference to Prospect v. Northridge. ff) Make several other clarifying changes. SUPPORT AND OPPOSITION : Support: California Labor Federation (cosponsor) Health Access California (cosponsor) Association of California State Supervisors California Alliance for Retired Americans California Black Health Network California Pan-Ethnic Health Network California Professional Firefighters California State Retirees CALPIRG Children Now Congress of California Seniors Consumers Union Hunger Action Los Angeles Inland Empire Immigrant Youth Coalition NAMI California National Health Law Program National Multiple Sclerosis Society CA Action Network The Children's Partnership USW Local 675 Oppose:California Society of Anesthesiologists (oppose unless amended) California Chapter of the American College of Cardiology California Medical Association -- END -- AB 72 (Bonta) Page 21 of ?