California medical consumers will enjoy strong new protection against surprise out-of-network medical bills starting next July under a hard-fought bill overwhelmingly approved last week by the state Legislature. It’s widely expected that Democratic Gov. Jerry Brown will sign it.
Patients who receive care from out-of-network physicians when they visit in-network facilities would have to pay only in-network cost-sharing. Health plans would pay non-contracting physicians the plan’s average contracted rate or 125% of the Medicare rate, whichever is greater. Doctors could appeal that through a binding independent dispute resolution process. The rules would not apply, however, to self-insured employer health plans, which are shielded from state regulations by the federal Employee Retirement Income Security Act.
The bill, passed by the General Assembly on the last day of the legislative session after months of tough negotiations, also tightens requirements on health plans to offer adequate provider networks.
Florida enacted a similar law this year, joining New York, while Georgia and other states are studying the issue or considering legislation. Observers predicted the bipartisan passage of the California law would boost legislative efforts in other states.
Insurers and other payers faced pressure to come up with a legislative solution because shocker out-of-network bills have undermined public support for narrow-network health plans, which have become a primary method of keeping premiums affordable. The California Medical Association ultimately adopted a neutral position on the bill while still expressing concerns about whether it would reduce patients’ access to physician services. Groups representing plastic surgeons, cardiologists and anesthesiologists strongly opposed the bill. The California Hospital Association and the California Association of Health Plans did not declare a position.