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New California Law Aims to Combat Surprise Medical Bills

California Gov. Jerry Brown recently signed legislation intended to protect patients from surprise medical bills. AB 72 removes patients from the reimbursement battle between insurance companies and out-of-network providers.

According to a 2015 survey conducted by the Consumer Reports’ National Research Center, nearly one in four privately insured California patients was hit with a surprise medical bill in which their health insurance covered less than expected in the past two years. The same percentage of those surveyed was charged at an out-of-network rate when they believed a provider was in their network.

The new law specifically establishes a payment rate for reimbursement of out-of-network doctors, which is the greater of the average of the health insurer’s contracted rate or 125 percent of the amount Medicare reimburses for the same or similar services. It also limits enrollee and insured cost sharing for these covered services to no more than the cost sharing required had the services been provided by a contracting health professional.

Given that patients often have difficulty resolving medical billing disputes, AB 72 creates

an independent dispute resolution process (IDRP) for claims and claim disputes related to covered services provided at a contracted health facility by a noncontracting provider. All of the new requirements apply to health plan contracts and health policies issued, amended, or renewed on or after July 1, 2017.

The new law is good news for California patients. “When patients follow the rules of their plan and go to an in-network hospital or other facility, they should not be hit with a surprise bill of hundreds or thousands of dollars from an out-of-network doctor they did not meet or ever choose,” said Anthony Wright, executive director for Health Access California, a California consumer advocacy group that co-sponsored the bill.

If you or someone you love has fallen victim to medical fraud, don’t hesitate to contact a San Diego personal injury attorney at the Law Offices of Robert Vaage for a free consultation.