On September 23, 2016, California Governor Jerry Brown signed into law AB-72 Health care coverage: out-of-network charge with little fanfare. The law went into effect for Californians July 1, 2017. This relatively small bill tackles one of the biggest problems in emergency healthcare that many people are not aware of: surprise billing.
How surprise billing has been going around patients’ insurance coverage
One of the biggest factors in choosing which hospital to go to when you’re sick or injured is based on insurance. Whether you trip and fall or you’ve been in a car accident, finding a hospital that takes your insurance is very important. If a hospital does not take your insurance, you will probably choose a different one, even if it is slightly farther away or less convenient. If a hospital does take your insurance, you likely feel comfortable going to it, assured that your insurance company will cover most if not all of the cost of your visit.
What you may be surprised to learn is that even if the hospital you visit does take your insurance, the doctors attending you might not. This practice is called “surprise billing.” Sometimes, a person’s insurance company will pay for the bill anyways. More often, the person is stuck with the bill herself. Before July 2017, this shocking practice was legal in California, from Los Angeles to San Francisco. One out of every five people, or approximately 22%, who go to a hospital compatible with their insurance policy receives a bill from a doctor not covered by their insurance policy, according to a report in New England Journal of Medicine.
Why are out-of-network emergency room doctors working with in-network hospitals?
There are many reasons why a hospital might have staff that are out-of-network. Doctors tend to blame the insurance companies, explaining that they aren’t offered beneficial enough deals with insurance companies. The insurance companies blame the doctors, claiming that some doctors are too greedy to accept the deals insurance companies offer them. Regardless of whose fault it is, the fact is that many hospitals operate with a significant portion of their staff working out-of-network, and patients rarely have the opportunity to choose which doctors or nurses attend them.
There have been attempts to reform this system on the federal level; President Obama, Democratic Congressman Lloyd Dogget, and high ranking officials from the Center for Medicare and Medicaid services have all made attempts to tackle the issue nationwide. However, so far they have been met with indifference and very little success. The only victories in regulating surprise billing have been on state levels.
How does AB-72 regulate surprise billing for California patients?
AB-72 makes it illegal for insurance companies to charge patients out-of-network rates if they went to an in-network hospital. Even if a patient saw a doctor who was not covered under his insurance, if he went to a hospital that does take his insurance, then his insurance company will have to charge him the same rates as if he was seen by an in-network doctor. To be clear, AB-72 does not make it illegal for in-network hospitals to hire out-of-network physicians; it makes it illegal for insurance companies to charge patients different rates for these out-of-network doctors. While this bill is a step forward in patients’ rights, out-of-network billing is still legal in most states; California is ahead of most of the country in regulating healthcare costs on behalf of patients.
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