BILL ANALYSIS Ó
AB 533
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Date of Hearing: May 6, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB
533 (Bonta) - As Amended April 23, 2015
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Urgency: No State Mandated Local Program: YesReimbursable:
No
SUMMARY:
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
disputes.
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3)One-time costs of $300,000 (Insurance Fund), to the California
Department of Insurance (CDI) for policy review and
regulations.
4)Ongoing annual costs, in the range of $50,000 (Insurance
Fund), to CDI to assist consumers, and investigate and resolve
complaints and disputes.
COMMENTS:
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
providers.
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
networks.
AB 533
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Analysis Prepared by:Lisa Murawski / APPR. / (916)
319-2081