Doctors Sue Over New Law Limiting Out-of-Network Billing

The Association of American Physicians and Surgeons, has filed suit in the U.S. District Court for the Eastern District of California in Sacramento, asking the court to block a new California Law (Assembly Bill 72), which is designed to curb unexpected out-of-network medical bills.

Authored by Assemblymember Rob Bonta (D-Alameda), AB 72 removes patients from what is essentially a dispute between insurers and health care providers who don’t contract with insurers when services are provided in-network settings.

The law will require insurers to reimburse these out-of-network providers at 125 percent of the rate Medicare pays, or at the insurer’s average contracted rate, whichever is greater.

The lawsuit, which names the governor and the head of the state Department of Managed Health Care as defendants, claims the law violates the U.S. and California constitutions in several ways, including denying doctors due process as well as just compensation for their labor.

The group also claims doctors will withdraw from providing services in greater numbers in predominantly minority communities, thus violating constitutional equal protection clauses.

Bonta said in a statement that the law “expressly provides due process for physicians by allowing them to seek any legal remedy they see fit if they are dissatisfied with their compensation” and will shield consumers from potentially devastating bills.

The bill signed by Gov. Jerry Brown is due to go into effect July 2017

(Source: San Francisco Chronicle [10/17/2016])