BILL ANALYSIS                                                                                                                                                                                                    

                                                                     AB 533

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          Date of Hearing:  May 6, 2015


                                 Jimmy Gomez, Chair

          533 (Bonta) - As Amended April 23, 2015

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          Urgency:  No  State Mandated Local Program:  YesReimbursable:   


          This bill limits patient cost-sharing when a patient receives  
          services from an out-of-network provider at an in-network  
          facility.  Specifically, this bill:


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          1)Limits a patient's cost-sharing for such out-of-network  
            services to the amount they would have paid an in-network  
            provider, specifies reimbursement for overpayment, and counts  
            the cost-sharing payment towards an individual's out-of-pocket  
            maximum and deductible.

          2)Requires plans to inform out-of-network providers of the  
            in-network cost-sharing amount.

          3)Limits plan payments to providers to claims that have not  
            advanced to collections.

          4)Allows for voluntary consent to waive these protections  
            related to out-of-network services.

          5)States it does not exempt plans and providers from other  
            specified legal requirements.

          FISCAL EFFECT:

          1)One-time costs, in the range of $300,000 (Managed Care Fund),  
            to DMHC for plan review, legal services, technical assistance  
            and regulations. 

          2)Ongoing annual costs potentially in the hundreds of thousands  
            of dollars (Managed Care Fund), to the DMHC Help Center to  
            assist consumers, and investigate and resolve complaints and  


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          3)One-time costs of $300,000 (Insurance Fund), to the California  
            Department of Insurance (CDI) for policy review and  

          4)Ongoing annual costs, in the range of $50,000 (Insurance  
            Fund), to CDI to assist consumers, and investigate and resolve  
            complaints and disputes. 


          1)Purpose. The author states this bill will protect patients who  
            do the right thing by seeking care in an in-network facility,  
            only to later receive a surprise bill from an out-of-network  
            provider that had been called in to provide a service.  This  
            bill will protect patients from a financial penalty when this  
            occurs.  The author asserts consumers should not be placed in  
            the middle of billing conflicts and disputes between  
            out-of-network providers and plans or insurers, particularly  
            when they sought in-network care but were seen by an  
            out-of-network provider through no fault of their own.  This  
            bill is sponsored by Health Access. 

          2)Background. Various members of a health care team are  
            assembled to provide medical procedures, such as surgeries or  
            deliveries. Patients may have a reasonable expectation that  
            when seeking health care through an in-network facility, all  
            providers will be in-network as well. However, due to  
            differences in health plan contractual relationships among  
            different members of the health care team, this may not be the  
            case.  Anesthesiology, pathology, and radiology are commonly  
            cited specialties for which contractual arrangements may not  
            be in place.  When this occurs, patients are often unaware the  
            medical services they were receiving were, in fact,  
            out-of-network and thus more expensive. For example, under  
            current law and practice, a patient may go to an in-network  


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            hospital for a surgery, but be unaware that the  
            anesthesiologist does not have a contract with their health  
            plan.  This consumer may later be "balance billed" for the  
            difference between the out-of-network provider charges and  
            what was reimbursed by their plan.  This is a bit of a double  
            whammy for patients, as out-of-network cost-sharing does not  
            count towards their out-of-pocket maximum and deductible.   
            This bill seeks to change that on both fronts, counting these  
            out-of-network charges towards maximum cost sharing amounts,  
            as well as limiting the total amount owed by the consumer.

          3)Balance billing. California currently prohibits balance  
            billing only for emergency room services, and only for  
            patients who are enrolled in a plan regulated by the  
            Department of Managed Health Care.  A number of other states  
            have balance billing protections in place. In 2014, New York  
            State passed a comprehensive bill prohibiting balance billing,  
            with provisions similar to those of this bill. Disputes  
            between providers and health plans over the fee charged for  
            medical services will go through an independent review  
            process, with certain exceptions.

          4)Support. Consumer advocates, labor groups, and health plans  
            and insurers support this bill because it will protect  
            consumers from high, unexpected bills from out-of-network  

          5)Opposition.   The California Medical Association and other  
            physician groups oppose this bill unless amended require an  
            efficient, equitable dispute resolution mechanism that guide  
            parties towards a reasonable rate for services.  In absence of  
            this, CMA contends, the bill undermines current law requiring  
            insurers and plans to provide adequate provider networks,  
            because the provisions create disincentives for plans and  
            insurers from negotiating fair payments and creating robust  


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          Analysis Prepared by:Lisa Murawski / APPR. / (916)