NEW REPORT: CA Compromise to Stop Surprise Medical Bills is Working and is the Best Solution for a Federal Fix

A Health Access report released today highlights new data showing the success of California’s compromise solution to stop surprise medical bills. The report demonstrates how AB 72, signed into law three years ago, has been successful in protecting patients from surprise bills which occur when patients go to an in-network hospital or facility but then get a bill from an out-of-network doctor. These bills come as a surprise to the consumer who did the right thing by going to an in-network facility or who sought emergency treatment, and can often be hundreds or thousands of dollars or more.

Today’s New York Times points to why it’s important to look at these numbers now: “lawmakers who want to ban surprise bills nationally are gravitating toward a California-style approach, making the California experience a key exhibit in the debate.”

As Congress considers significantly similar legislation to protect patients while ensuring a fair, but not inflated, payment for health providers, the data in the report shows California’s law is working and rebuts charges from opponents of a federal fix.

California’s AB 72, co-authored by Assemblymembers Bonta (D), Bonilla (D), Dahle (R), Gonzalez (D), Maienschein (R), Santiago (D), and Wood (D), was a compromise resulting from years of intense negotiation, advocacy and lobbying which ultimately led to a fair resolution between stakeholders and multiple legislators of both political parties. This new report includes data verifying that since implementation of the law, California’s patients have been protected from surprise bills and our health system continues to provide access to needed care. There is no empirical evidence of negative impacts from AB 72. Highlighting the most recent data from state regulators, the report shows:

  • Patients are being protected from surprise medical bills from out-of-network physicians—acknowledged by supporters and opponents of the law.
  • All but a handful of physicians are accepting the benchmark (the greater of the “average contracted rate” or 125% of Medicare) as payment in full rather than appealing and making their case for higher payment. In two years of implementation, only 68 appeals have been filed in all of California, 49 from anesthesiologists. Only 23 were complete and germane and going through the process.
  • According to state regulators and health plans, insurers have broadened their networks, and contracting continues to be widespread such that 80%-100% of their hospitals and other facilities have no out-of-network billing from the physicians practicing within.

The data is clear: Three years since its signing, AB 72 is protecting patients from surprise medical bills, and providing fair payments to physicians while preventing price-gouging. Congress can and should look to California’s compromise to stop surprise medical bills as the best solution for a federal fix. While dark-money interests try to derail the conversation at the federal level, we have hard data showing that this California compromise works.

Our findings show that problems posed by providers failed to materialize. The sky is not falling in California. In fact, insurance networks got broader, and all but a few providers accepted the benchmark payment as payment in full.

While the report highlights the success in stopping surprise medical bills, many Californians need a federal solution. In California alone there are five and a half million people who do not fall under the protections of AB 72 due to federal pre-emptions. Another million are in plans not regulated at the DMHC and thus are at risk of surprise emergency room bills.

Various Congressional proposals, including those from the Senate HELP committee and the House Energy and Commerce committee, are bipartisan efforts to prevent all Americans from getting these unfair out-of-network bills. These bills also set a benchmark for paying out-of-network providers to a “median in-network rate,” similar to AB 72’s “average contracted rate.”

No American should face financial ruin when getting an unfair out-of-network bill—especially when the patient did the right thing, either responding in an emergency situation or finding an in-network facility. Congressional action is urgently needed to prevent these surprise bills for millions of Californians and all Americans.

READ MORE:

The New York Times: In California, a ‘Surprise’ Billing Law Is Protecting Patients and Angering Doctors

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