California to crack down on out-of-network billing

A bill approved by the California legislature this week represents a major milestone for consumer and patient advocates.

Under the new law, which was passed by both houses of the legislature and is expected to be signed by Gov. Jerry Brown, most Californians who receive treatment at a hospital or clinic that is within their insurance network will never be charged the out-of-network rate.

The new law will not apply to those who get their coverage through a self-insured employer. Those plans are regulated by the federal Employee Retirement Income Security Act.

The bill was aimed at addressing a common phenomenon: Patients receiving treatment at a facility that is in their insurance network but then being forced to pay the out-of-network rate because the physician they dealt with was not included in their network.

The issue often arises when patients deal with a specialist, such as a radiologist, cardiologist or anesthesiologist. PBS station KQED, in northern California, gave the example of a pregnant woman who was hit with a big out-of-network bill for a hearing test performed on her baby. The doctor who performed it was not part of her network, even though the hospital in which she received the test was.

The medical community was lukewarm about the legislation. The California Medical Association, the largest physicians group, did not support or oppose the bill, while organizations representing plastic surgeons, anesthesiologists and cardiologists opposed it.

“This bill will be the first of its kind in terms of strength of consumer protections, and it will be a model for the rest of the nation,” Assemblyman Rob Bonta, a Democrat from Alameda and one of the bill’s co-authors, told KQED.

Because of its size, policy that works in California is more likely to be viewed as feasible for the entire country. Another large state, Florida, implemented a similar law this year. Unlike California, Florida is under Republican control, an indication that such proposals have strong bipartisan appeal.

Indeed, the California legislation passed by a wide margin in both chambers of the legislature and earned support from members of both parties.