CSA has been highly engaged in California policy discussions aimed at addressing the challenges with out-of-network billing.
Passed by the California Legislature in 2016, Assembly Bill 72 went into effect July 1, 2017 to attempt to address the issue of out-of-network billing whereby patients receive “surprise bills” for non-emergency services rendered by a non-contracted provider at a contracted facility. AB 72 was not a perfect solution, but as state law it now guides reimbursement for out-of-network, non-emergency services at in-network facilities.
AB 72 Highlights
- Prevents patients from paying, and providers from billing, more than the in-network amount for covered services delivered at an in-network facility by an out-of-network provider.
- Establishes an Average Contracted Rate (ACR), determined on an interim basis by payors. Notably, the data that goes into a payor’s determination of the ACR is confidential – payors are not obligated to release this.
- Requires the payment for out-of-network services from a payor to a physician to be the higher of the ACR or 125% of the Medicare rate.
- Establishes an Independent Dispute Resolution Process (IDRP) when physicians and payors disagree on the ACR claimed by the payor.
AB 72 does not apply to:
- Emergency care
- Medicare and Medi-Cal
- Out-of-state plans
- Self-insured employer plans or other products regulated by federal law
- Dental providers
AB 72 creates a binding Independent Dispute Resolution Process (IDRP) to allow payors and non-contracted providers to arbitrate disputes about the appropriate reimbursement amount for services. Once a non-contracting provider or payor submits an AB 72 IDRP Application, the opposing party is required by law to participate in the AB 72 IDRP. The IDRP application is managed by MAXIMUS Federal Services, Inc., a private-sector government contractor.