Preventing Overcharging, Surprise Bills & Medical Debt


PATIENTS PROTECTED, PROVIDERS PAID: Data From Three Years of California’s Compromise to Stop Surprise Medical Bills

Federal Action Needed to Protect Many More in CA & US

AB 72 took effect on July 1, 2017, and now, over two years later, the data is clear: The law is working as intended by consumer advocates, protecting patients from physician balance billing, while ensuring a fair payment to providers (key focus of negotiations) where the compromise benchmark payment is based on the average contracted rate. California’s health system protects patients while continuing to provide access to care to needed care without any empirical evidence of negative impacts from AB 72.

Highlighting the most recent data from state regulators, this report shows:

  • Patients are being protected from surprise medical bills from out-of-network physicians.
  • All but a handful of physicians are accepting the “average contracted rate” benchmark as payment in full, rather than appealing and making their case for higher payment.
  • 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.

Key lessons can be learned from California to inform federal action. California’s experience also highlights the need for federal action to fully hold consumers harmless, protecting them from surprise bills and medical debt, regardless of their insurance plan.

Read the report

Battling Unfair Billing Practices and Overcharging

A hospital bill is often the biggest bill a person will get in her entire life, outside of a mortgage. Medical debt has been a factor in more than half of bankruptcies–for the uninsured and even among many insured who found out-of-pocket costs too overwhelming. While the Affordable Care Act extends coverage and puts limits on out-of-pocket costs, there is more to do to prevent unfair billing practices, from overcharging to aggressive collections practices.

Health Access supports efforts to strengthen consumer protections in the insurance market to prevent underinsurance and medical debt, going above and beyond the ACA as needed. For example, Health Access led efforts to pass California’s first-in-the-nation Hospital Fair Pricing Act, a 2006 law (authored by Assemblywoman Wilma Chan), which limits the common practice of charging uninsured and underinsured patients more for care than everybody else pays.

Another key issue Health Access support are efforts to end “surprise billing in California. Patients who have health coverage are often wrongfully billed by physicians when the patient’s health plan refuses to pay. Also known as “balance billing,” this practice places the consumer in the middle of a billing dispute between the health plan and the physician. Patients who do not pay these bills are often aggressively pursued or sent to collections. In 2017, California passed the landmark AB 72 which ended surprise billing in California for people who do the right thing by visiting an in-network facility but are billed after being seen by an out-of-network provider. Patients were effectively taken out of billing disputes and providers are paid a fair wage. California is still working on efforts to end surprise billing for emergency all room visits.

Learn more

 Health Access Analysis

Previous Efforts on Surprise Bills and Medical Debt in CA

Resources for Advocates and Consumers