BILL ANALYSIS                                                                                                                                                                                                    

                          Senator Ed Hernandez, O.D., Chair

          BILL NO:                    AB 533    
          |AUTHOR:        |Bonta                                          |
          |VERSION:       |September 4, 2015                              |
          |HEARING DATE:  |September 9,   |               |               |
          |               |2015           |               |               |
          |CONSULTANT:    |Teri Boughton                                  |
           SUBJECT  :  Health care coverage: out-of-network coverage.

           PURSUANT TO SENATE RULE 29.10
           SUMMARY  :  This bill requires the Department of Managed Health Care  
          (DMHC) and the California Department of Insurance (CDI) to  
          establish a binding independent dispute resolution process for  
          claims for non-emergency covered services provided at contracted  
          health facilities by a non-contracting health care professional.  
           This bill 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.
          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  
            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  


          AB 533 (Bonta)                                      Page 2 of ?
            owed by the plan.

          4)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.

          5)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 nonparticipation in  
            a contract with that insurer, hospital service plan or health  
          This bill:
          1)Requires DMHC and CDI to each establish an independent dispute  
            resolution process (IDRP) for the purpose of processing and  
            resolving a claim dispute between a health plan or insurer and  
            a non-contracting individual health professional for  
            non-emergency services provided at a contracting health  
            facility.  Makes the determination obtained through IDRP  
            binding on both parties.

          2)Requires both parties to participate in the IDRP if initiated  
            by either party.

          3)Permits DMHC and CDI to contract with one or more independent  
            organizations for the IDRP and requires the departments to  
            establish additional requirements, including  
            conflict-of-interest standards.

          4)Requires, unless otherwise provided in this bill or otherwise  
            agreed by the non-contracting health professional and the plan  
            or insurer, 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.

          5)Requires, if non-emergency services are provided by a  
            noncontracting individual health  professional to an enrollee  
            who has voluntarily chosen to use his or her out-of-network  
            benefit for services covered by a preferred provider  


          AB 533 (Bonta)                                      Page 3 of ?
            organization or a point of service plan, unless otherwise  
            agreed to by the plan and the health professional, the amount  
            paid shall be the amount set forth in the enrollee's evidence  
            of coverage.

          6)Limits enrollee or insured cost sharing under a health plan  
            contract or health insurance policy issued, amended, or  
            renewed on or after July 1, 2016, when an enrollee or insured  
            obtains care from a contracting health facility at which, or  
            as a result of which, the enrollee or insured receives  
            services provided by a non-contracting health professional, to  
            the same cost sharing that the enrollee or insured would pay  
            for the same covered benefits received from a contracting  
            health professional.

          7)Requires the plan or insurer to inform the non-contracting  
            health professional of the in-network cost sharing owed by the  
            enrollee or insured.  Requires the non-contracting health  
            professional to refund any overpayment within 30 working days  
            of receiving the in-network cost sharing amount.  Requires, if  
            overpayment is not refunded within 30 working days, interest  
            to accrue at the rate of 15% per annum beginning with the  
            first calendar day after the 30-working day period and the  
            health professional to automatically include the interest with  
            the refund.

          8)Prohibits payment of a non-contracting health professional if  
            any amount owed by the enrollee or insured has advanced to  
            collections.  Requires a non-contracting health professional  
            to affirm in writing that he or she has not advanced to  
            collections any payment owed by the enrollee or insured when  
            submitting a claim to the plan or insurer.  Permits any  
            in-network cost sharing to advance to collections after  
            payment by the plan or insurer if the enrollee or insured  
            fails to pay the amount owed.

          9)Requires enrollee or insured cost sharing arising from  
            services received by a non-contracting health professional at  
            a contracting facility to be counted toward any limit on  
            annual out-of-pocket expenses and any deductible in the same  
            manner as cost sharing would be attributed to a contracting  
            health professional.

          10)Defines "contracted health facility" as a health facility  
            that is contracted to provide services under the enrollee's  


          AB 533 (Bonta)                                      Page 4 of ?
            health plan contract or insured's health insurance policy and  
            includes:  hospital, skilled nursing facility, ambulatory  
            services or other outpatient settings, as specified,  
            laboratory, radiology or imaging, facilities providing mental  
            health or substance abuse treatment, and any other provider as  
            the DMHC or CDI may by regulation define as a health facility  
            for purpose of this bill.

          11)Defines "individual health professional" as a California  
            licensed physician or surgeon.

          12)Permits an enrollee or insured to voluntarily consent to the  
            use of a non-contracting individual health professional if, in  
            at least three business days in advance of the receipt of  
            services, the enrollee or insured is provided a written  
            estimate of the cost of care and consents in writing to both  
            the use of a non-contracting individual health professional  
            and payment of the estimated additional cost.

          13)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,  
            active labor exists, or psychiatric emergency medical care,  
            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.  

          EFFECT  :  According to the Senate Appropriations Committee, as  
          amended August 18, 2015:
           One-time costs of about $500,000 for the development of  
            regulations and review of plan filings by the Department of  
            Managed Health Care (Managed Care Fund).

           Annual costs of $1.5 million to $3 million per year for the  
            independent dispute resolution process that the Department of  
            Managed Health Care convenes to settle a dispute between a  
            provider and a health plan (Managed Care Fund).

           One-time costs of about $550,000 for the development of  
            regulations and review of plan filings by the Department of  


          AB 533 (Bonta)                                      Page 5 of ?
            Insurance (Insurance Fund).

           Annual costs of $900,000 per year for the independent dispute  
            resolution process that the Department of Insurance convenes  
            to settle a dispute between a provider and a health plan  
            (Insurance Fund).

          VOTES  :  
          |Assembly Floor:                     |74 - 1                      |
          |Assembly Appropriations Committee:  |17 - 0                      |
          |Assembly Health Committee:          |17 - 0                      |
          |                                    |                            |
          COMMENTS  :
          1)Author's statement.  According to the author, 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 service.  Surprise bills cost consumers substantial  
            sums of money, placing an undeserved and unreasonable  
            financial burden upon them.  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.  While  
            California has been at the forefront of the federal Patient  
            Protection and Affordable Care Act implementation, the state  
            needs to catch up to other states that have taken the lead in  
            fully protecting consumers from surprise bills.  It is the  
            state's responsibility to ensure full consumer protection for  
            all of our patients, and this bill is a critical measure to  
            ensure patients are safeguarded from hidden costs unfairly  
            imposed upon them when they have followed the 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  


          AB 533 (Bonta)                                      Page 6 of ?
            adult U.S. respondents, nearly one out of four got a bill from  
            a doctor they did not expect to get a bill from. 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.  Sixty-three percent 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  
            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, (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.  Because of  
            this decision, the criteria proposed in this bill are slightly  
            modified from the Gould criteria in that they include  
            "prevailing provider rates charged or paid in the general  
            geographic area in which the services were rendered."


          AB 533 (Bonta)                                      Page 7 of ?
          4)Medicare Data.  The Centers for Medicare & Medicaid Services  
            (CMS) Physician Fee Schedule Search Tool provides Medicare  
            payment information on more than 10,000 services, including  
            pricing, the associated Relative Value Units (RVUs), and  
            various payment policies. The Medicare Physician Fee Schedule  
            (MPFS) is the primary method of payment for enrolled health  
            care professionals. Specifically, Medicare uses this fee  
            schedule when paying the following services: Professional  
            services of physicians and other enrolled health care  
            professionals in private practice; Services covered incident  
            to physicians' services (other than certain drugs covered as  
            incident to services); Diagnostic tests (other than clinical  
            laboratory tests); and Radiology services. For services paid  
            under the MPFS, there is a 5% reduction in the  
            Medicare-approved amounts for nonparticipants, and there is a  
            limit on what the health care professional/supplier may charge  
            the beneficiary.  This limiting charge equals 115% of the fee  
            schedule amount and is the maximum the nonparticipant may  
            charge a beneficiary.
          5)IDRP.  Both CDI and DMHC have 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.  CDI requires the following  
            information to be included with a disputed claim: 1) the  
            patient's Assignment of Benefits, if applicable, 2) claim  
            forms submitted to the insurance company, 3) all  
            correspondence between the provider and the insurance company  
            (including all related Explanation of Benefits (EOBs) and  
            Dispute Resolution Process determination letter), 4) the  
            patient's insurance identification card - both sides, and 5)  
            the provider's contract with the insurance company, if any.

          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  


          AB 533 (Bonta)                                      Page 8 of ?
            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  
            concerning the reasonable and customary value of the services  
            rendered, and 4) the Provider has completed the Payer's  
            dispute resolution process.

          6)Prior legislation. AB 1579 (Campos, 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, 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  
            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, 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  


          AB 533 (Bonta)                                      Page 9 of ?
                    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  
                    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.  


          AB 533 (Bonta)                                      Page 10 of ?
                    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, 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, 2008), would have prohibited a hospital-based  
            physician, as defined, from seeking payment from individual  
            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  

            AB 1X 1 (Nunez, 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 poststabilization health care  
            services, for those services, as defined, except for  


          AB 533 (Bonta)                                      Page 11 of ?
            applicable copayments and cost sharing.  AB 1X 1 died in the  
            Senate Health Committee.

            SB 417 (Ortiz, 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, 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, 2005), would have prohibited hospital-based  
            anesthesiologists, radiologists, pathologists, and emergency  
            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, 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, 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, 2003), would have required a health plan or  


          AB 533 (Bonta)                                      Page 12 of ?
            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, 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.  According to Health Access California, even the most  
            careful consumers can end up being treated by an  
            out-of-network provider and then receiving a surprise bill for  
            the difference between the provider's charge and what the  
            health plan is willing to pay. The difference can be hundreds  
            and sometimes thousands of dollars. A consumer who goes to an  
            in-network imaging center, only to discover that a  
            non-contracting radiologist the consumer never met and did not  
            select was responsible for reviewing the consumer's imaging or  
            a consumer who selects an in-network surgeon for surgery at an  
            in-network hospital or surgery center but discovers that the  
            anesthesiologist is a non-contracting provider only when they  
            get the bill from the anesthesiologist. This bill holds  
            consumers harmless for surprise bills from out-of-network  
            charges that were outside of their control. Consumers should  
            not get stuck in the middle of business disputes between  
            health plans and providers.  The California Association of  
            Health Underwriters writes that agents and brokers act as  
            advocates for policyholders when disputes arise and supports a  
            strict prohibition on balance billing.  CalPERS believes this  
            bill provides an important consumer protection by preventing  
            CalPERS members and other insured Californians that use  
            in-network health facilities from being balance billed by  
            out-of-network health professionals.


          AB 533 (Bonta)                                      Page 13 of ?
          8)Opposition.  The California Orthopaedic Association writes  
            that the issue of patients who unknowingly receive care which  
            will not be paid for by their health plan needs to be  
            addressed on the front end.  Insurers and plans must maintain  
            adequate networks of providers, and pay rates that are  
            adequate to sustain those networks.  This bill will penalize  
            those providers who cannot accept inadequate rates and will  
            provide no incentive for plans to negotiate fair contracts.   
            The California Radiological Society and California Society of  
            Pathologists indicate that they would prefer to contract with  
            plans and insurers but the absence of contracts may be due to  
            plans that provide contract terms on a "take it or leave it"  
            attitude.  They do not oppose protections on patient cost  
            exposure but would suggest that plans be required to create a  
            process to treat this similarly to an out-of-network referral  
            for medically necessary services.  The California Chapter of  
            the American College of Emergency Physicians writes even if  
            emergency physicians are exempt, they remain opposed because  
            it is bad policy to adopt a framework that hands all the power  
            to insurers and leaves providers at their mercy for payment.  
            The California Medical Association (CMA) writes that this bill  
            creates government rate setting for physician services in  
            commercial plans, reduces access to care as providers will be  
            less willing to accept out-of-network patients, the payment  
            standard established in AB 533 is significantly below existing  
            contract rates and will result in health plans dropping  
            contracts or reducing contract rates, the current structure of  
            the bill will force hundreds of thousands of claims to go  
            through the IDRP because of a legislatively-imposed, unfair  
            payment standard, the low rate set by the bill takes effect  
            immediately, but the IDRP will take months or years to be  
            established by the departments, resulting in physicians being  
            underpaid and without any recourse, fundamentally changes PPO  
            product by requiring three business days' advanced consent  
            before accessing out-of-network benefits, and there are  
            numerous substantive drafting errors in the bill which remain  
            unaddressed and will disrupt implementation. 
          9)Policy Comment.  The main objective of this bill as  
            articulated in the author's statement is to protect consumers  
            from being placed in the middle of payment disputes between  
            health plans and providers.  Sections three and four, as  
            passed by the Assembly, set up explicit protections for  
            patients from cost sharing that is higher than what is  
            expected.  The remainder of this bill,  sets up payment rates  


          AB 533 (Bonta)                                      Page 14 of ?
            and appeals processes to address payment issues between plans  
            and non-contracted providers for services provided to  
            enrollees.  The details of these provisions have major  
            significance for both plans and providers.  Finding the right  
            balance of a fair payment that does not create a disincentive  
            for providers to contract is the challenge.  It is difficult  
            to know what impact there will be on provider payments if  
            balance billing is banned as proposed in this bill.  A 2014  
            study on California's balance billing ban for California  
            emergency providers concluded that payment rates by  
            subcontracted risk-bearing organizations for non-contracted  
            emergency department professional services declined  
            significantly following the ban, whereas payment rates by  
            health plans remained relatively stable. Based on this study,  
            it is unclear if the ban will have an impact on provider rates  
            paid by health plans, or if as in the case of emergency room  
            physicians, rates will be significantly reduced from  
            risk-bearing organizations.  
          Support:  Health Access California (sponsor)
                    America's Health Insurance Plans
                    American Cancer Society Cancer Action Network
                    American Federation of State, County and Municipal  
                    Anthem Blue Cross
                    Association of California Life and Health Insurance  
                    California Association of Health Plans
                    California Association of Health Underwriters
                    California Association of Physician Groups
                    California Black Health Network
                    California Labor Federation
                    California Pan-Ethnic Health Network
                    California Primary Care Association
                    California Public Employees Retirement System Board of  
                    California School Employees Association
                    California State Council of the Service Employees  
                    International Union
                    California Teachers Association
                    Children Now


          AB 533 (Bonta)                                      Page 15 of ?
                    Children's Defense Fund California
                    City of Oakland
                    Community Clinic Association of Los Angeles County
                    Consumers Union
                    International Alliance of Theatrical Stage Employees  
                    Local 80
                    Leukemia & Lymphoma Society
                    LIUNA Local 777
                    LIUNA Local 792
                    NAMI California
                    National Health Law Program
                    National Multiple Sclerosis Society - California  
                    Action Network
                    The Children's Partnership
                    Western Center on Law and Poverty 
          Oppose:   California Chapter of the American College of  
                    California Chapter of the American College of  
                    Emergency Physicians
                    California Medical Association
                    California Orthopaedic Association
                    California Radiological Society
                    California Society of Anesthesiologists
                    California Society of Pathologists
                    California Society of Plastic Surgeons
                    Osteopathic Physicians and Surgeons of California

                                      -- END --