Surprise Out-of-Network Billing: State and Federal Efforts

  • Conte, Antonio, MD, MBA, FASA
| Aug 05, 2019

Antonio-Conte-MD-MBACalifornia’s AB 72 is not the model Congress should adopt. 

As we started 2019, a growing number of physician anesthesiologists reported significant difficulties in negotiating or renegotiating their contracts with health plans due to AB 72 going into full effect on January 1. Since the bill passed in 2016, anesthesia groups throughout California have encountered hostile treatment from health plans that are attempting to use AB 72 as a leveraging tool in order to secure lower payments for anesthesia services across the board. 

If you are lucky enough to not have been affected by the fallout of AB 72, the bill “solved” the problem of surprise bills, wherein a patient receives services from a non-contracted provider at an in-network facility and received a bill. Unfortunately, the solution that AB 72 put forth has enabled health plans being able to force physician groups into unfair and noncompetitive contracts. However, let’s not throw the baby out with the bathwater; surprise bills are unfair to patients and create significant hardships to thousands of Americans just trying to make ends meet. Patients should not be forced to feel the effects of the narrower networks that result from AB 72 just so that their health plan can drive payments lower and lower. 

CSA’s leadership and lobbying team are working in California to address the worst aspects of AB 72, which now appears to be giving all the buying power to insurers as they return with a “take it or leave it” proposition for their contracts -- artificially and significantly lowering rates so that some anesthesia groups are now considering how much longer they can stay in network. On Monday, July 29, CSA convened a meeting alongside our partners from the California Medical Association (CMA) to brief staff from the Department of Managed Health Care (DMHC) on the future of anesthesia services if the behavior allowed by AB 72 continues to occur. Leaving the meeting we feel optimistic that the significance of this issue has been conveyed and now understood by DMHC. We will continue to call on DMHC in its capacity as a regulator to ensure patients have access to the services they need and that health plans will not continue game the system.

With AB 72, California has set a legislative standard that is now under consideration by the federal government to solve the problem of surprise bills. We wish the U.S. Congress would take a note from New York State, where they established a fix to this problem several years prior to California’s misguided solution. Since the adoption of the New York State’s prohibition on surprise bills, consumer complaints have been reduced, payments to out-of-network providers have decreased, and the bill addresses the root causes of this problem by requiring that health plans offer physician network payments that are adequate to meet medical needs, and keep adequate provider networks. Plainly said, the New York model “WORKS.” 

As it turns out, CSA’s experience in dealing with AB 72 is now the cautionary tale for Congress. During this Summer Recess, we have been working with our allies at the American Society of Anesthesiologists (ASA) and CMA to mobilize our members to engage their Congressional members on what we’ve learned from AB 72. Congress is currently debating solutions that would apply nationally -- a “California-style bill” and a “New York-style bill.” You won’t be surprised that health plans are working to heavily influence the outcome. It is noteworthy that H.R. 3502, based on the New York model, is sponsored by U.S. Congressmen (and physicians) Dr. Raúl Ruiz and Dr. Ami Bera, who are both from California! 

Contact your member of Congress during the August Recess!

Here’s our ask of you:  ASA and CMA are organizing in-district meetings during the August Recess for our members to speak to their Congressional representatives and let them know that H.R. 3502 is the right approach. Please take some time out of your busy schedule to advocate to California’s powerful and large Congressional delegation on this critical issue. Let’s make sure the federal government gets it right and learns from our experience that patients can be protected from surprise medical bills while maintaining access to strong provider networks. 

To call your Representative, click here

To request an in-district meeting, click here

Below are links to several resource materials from ASA that you may find helpful:

Webinar re federal OON Legislation

For additional background, below are two documents from CMA:

  1. Surprise Medical Billing: Physician-Only Background Information
  2. CMA Statement Prior Authorization Reform Legislation 

Below are documents that you can share with your Congressional members at your meeting:

  1. CMA Talking Points: “Congressional Legislative Priorities: August 2019” 
  2. PAI California vs. New York 
  3. Op Ed: CMA CEO Dustin Corcoran and MSSSNY CEO Phil Schuh
  4. Independent Dispute Resolution: The Facts

CMA has also organized an educational conference call to discuss these issues, review talking points, and answer any of your questions. If you’d like to join in preparation for your meetings, you can do so on:

  • Tuesday, August 6, 2019, 6:30-7:30 pm; 1 (866) 906-7447; passcode 8025862#

Your advocacy and experience are critical here. Please contact CSA lobbyists Bryce Docherty and Vanessa Cajina at (916) 448-2162 if you have any questions. Thank you for your leadership.





Leave a comment