UPDATE

June 24, 2015

Need Help in Stopping Bill on Out of Network Billing/Ban on Balance Billing

The CSP has been engaged on discussions regarding AB 533 (Bonta) which deals with changes in law regarding billing and payment to physicians in hospital or outpatient settings when an insured patient receives services from a contracted or in network facility. The impact for pathology is primarily in hospitals for certainly AP billing and perhaps CP billing if out of network. In a freestanding clinical lab one could be out of network or receive referrals from an out of network physician, and provide services prior to knowledge of the patient's insurance status.

AB 533 focuses on removing the patient from the middle of the dispute between the health plan and the out of network physician. The CSP agrees that would be a good thing but the solution contained in the current version of AB 533 is unacceptable and gives too much power to plans to set the rates and not negotiate in good faith. Discussions have been ongoing but the provisions as of now are unacceptable.

Current law prohibits balance billing by a hospital based physician for emergency services needed to stabilize a patient in the hospital setting.

AB 533 would attempt to address the issue by limiting the patient's charges or cost sharing in such situations. It would require that the patient pay the non-participating provider at the same cost sharing basis as if the physician were in network, i.e. the same deductible or coinsurance as under their plan. AB 533 would also allow a plan enrollee to voluntarily consent to the use of a non-participating provider if they are notified 24 hours in advance, provided a cost estimate, and consent in writing.

We have concerns with this approach and the practical realities of how this would work in the hospital setting.

The issue of insured patients using a participating hospital but finding that some of the hospital based physicians may be non-participating or out of network needs to be addressed but it should be done in the context of the plan obligation to have an adequate network and provider participation. Hospital based pathologists ;

Would prefer to contract with the plans that insure the patients that they serve
The absence of contracts may be due to plans that provide contract terms on a "take or leave it attitude" with dramatic reductions in reimbursement
A hospital based pathologist provides services without knowing the insurance status of the patient until after the billing process begins, i.e. medical diagnostic tests and procedures services are ordered and provided while the patient is in the hospital and sometime later patient coverage information is provided to the pathology group to allow them to bill for their professional services. Notice to patients, determination of patient plan deductibles, and estimates of services to be provided would be impossible to provide. The bill should be amended to remove the penalty on the physician if they happen to bill a patient more than their cost sharing amount.
We would not oppose protections on patient cost exposure in such situations but would suggest that plans be required to create a process to treat this similarly to an out of network referral for medically necessary services.
The ultimate solution to this issue is to have a process top determine reasonable payment levels for the services provided. AB 533 now contains a binding Independent Dispute Resolution Process (IDRP) as established by DMHC, but it is not practical. Providers would have to exhaust a plan's internal appeal process first and then submit the dispute to the IDRP, which must then rule within 60 days. The bill contains no guidelines as to how the IDRP is to determine a fair payment amount and allows plans to confidentially accumulate their payments for out of network and use that as a basis for payment. Plans could continue to reduce payment levels.

AB 533 (Bonta) will be heard in the Senate Health Committee on the afternoon of Wednesday July 1st. We need you to email or call, or both, the members of the Senate Health Committee before Wednesday afternoon to indicate your opposition. A simple "we oppose AB 533" will be helpful. You can use any or all of the points made above in your communication. This bill is crucial for pathology and would effectively ban balance billing.

Senate Health Committee Members

All Phone Numbers Area Code (916)

Chair: Senator Ed Hernandez ( D)- El Monte/Baldwin Park

651-4022 / senator.hernandez@senate.ca.gov

Vice Chair: Senator Janet Nyugen ( R)- Garden Grove/Santa Ana

651-4034 / senator.nyugen@senate.ca.gov

Senator Lois Wolk ( D)- Davis /

651-4003 / senator.wolk@senate.ca.gov

Senator William Monning (D)- Carmel /

651-4017 / senator.monning@senate.ca.gov

Senator Jim Nielsen ( R)- Chico/Yuba City /

651-4004 / senator.nielsen@senate.ca.gov