October 04, 2016
On Sept. 23, 2016, Gov. Brown signed AB 72 into law. This new legislation amends the California Health & Safety Code to address reimbursement for out of network (OON) providers who provide services at in-network facilities. California joins several other states, including New York, Connecticut and Florida, which offer consumers protections against surprise OON bills, as well as a process for providers and insurers to resolve payment disputes for OON care.
The legislation provides that if an insured receives services covered by his/her health plan by an OON provider at an in-network facility, the insured is only obligated to pay the OON provider the cost sharing amount that he/she would otherwise be obligated to pay had the same covered service been provided by an in-network provider. In addition, the OON provider is prohibited from billing or collecting any amount beyond the insured’s cost sharing obligation, unless the insured has a plan that includes an OON benefit and the insured consents in writing to receive services from the OON provider at least 24 hours in advance of the episode of care. At the time consent is provided, the OON provider must give the insured a written estimate of his/her total out-of-pocket cost of care.
A health plan must pay an OON provider who provides covered services to an insured at an in-network facility the greater of the average contracted rate or 125 percent of the amount Medicare reimburses for the same or similar service. Payment made by the plan to the OON provider will constitute payment in full unless either party uses the independent dispute resolution process or other means to resolve the dispute. The Department of Managed Health Care will establish a new independent dispute resolution process for resolving payment disputes between OON providers and payers.
AB 72 is effective July 1, 2017.
AB 72 »