Brown Signs "Surprise Medical Bill" Legislation

On September 23, Governor Brown signed into law
Assembly Bill 72 by Assemblyman Rob Bonta (D-Oakland). The new law aims to curb surprise medical bills by out-of-network professionals at in-network facilities. AB 72 (which does not impact provision of emergency services by such non-contracted professionals) law limits cost sharing for covered services to in-network amounts unless the patient consents in writing to receive care from a noncontracting provider.  The law passed the California legislature with broad bipartisan support.

The law defines how much health plans and insurers must pay noncontracting providers for covered services.  Under its formula, noncontracting providers are entitled to the greater of the average contracted rate or 125% of the Medicare fee-for-service rate for similar services in a similar geographic area.  The law also requires State insurance and managed care regulators to establish an independent process to facilitate resolution of payment disputes between payers and providers.

AB 72 applies to health plans or health insurance policies issued, amended, or renewed on or after July 1, 2017.  It does not apply to Medi-Cal managed care plans, whose beneficiaries already enjoy legal protections from balance billing.  It also does not apply to self-insured employer health plans, which are exempt from state regulation under the federal Employee Retirement Income Security Act (“ERISA”).

(Source: National Law Review [9/27/2016])