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.
On January 1, 2019, the regulatory ACR went into actual effect. The implementation process is still underway, and CSA is working closely with the California Medical Association, the American Society of Anesthesiologists, the CA Department of Managed Health Care, and the CA Department of Insurance to craft solutions that will prevent payors from being able to use AB 72 to cancel contracts and compromise access to care.
An essential part of combating this legislation is making policymakers aware that insurance companies are using AB 72 in inappropriate ways, and we need to hear from you! We are compiling detailed information and a centralized database of cases in which payors have threatened to use AB 72 to either cancel contracts, drastically reduce contract rates, walk away from the negotiating table, or have delivered ACR’s far below actual. This information is power in the offices of legislators, and is the only way we can prove that these actions are taking place. Without it, our efforts are empty against a powerful and well-funded insurance lobby.
Please click here or fill out the following form if you encounter contracting problems due to AB 72.
AB 72 Violations Desk
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:
Medicare and Medi-Cal
Self-insured employer plans or other products regulated by federal law
Navigating The IDRP
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.