California Senate passes legislation to stop surprise medical bills, joins other states

The California Legislative Building in Sacramento. (Wikipedia)

The California Senate last week passed a bill to curb surprise out-of-network medical bills.

The bill would require insurers to reimburse out-of-network doctors and health providers at the same rate as what they pay in-network providers, or at a level of 125 percent of what Medicare reimburses, whichever is greater, according to the legislation.

Out-of-network providers and physicians would be required to accept the lower payment.

[Also: Hospital surprise bill legislation aims to end sticker shock for observation care]

Physicians and providers would be able to take claim disputes to an independent dispute resolution process, established under the bill.

Democratic Gov. Jerry Brown is expected to sign the bill into law.

The legislation would require hospitals in the state to notify patients when they are receiving observation care beginning Jan. 1, 2017 so that they know if they will be covered or charged an out-of-network rate, according to published sources.It permits the bundling of claims submitted to the same health plan or health insurer for the same or similar services by the same non-contracting health professional, according to the legislation.

Most surprise medical bills, in which a patient inadvertently receives services from an out-of-network provider, are due to emergency care.

California already bars billing patients for emergency care not covered by their insurers.

[Also: New York's 'no-surprises' law takes hold to end balance billing]

The bill is aimed at non-emergency services given by out-of-network  providers to patients who may not know that the physicians are not included in their health plan network.

Patients usually choose a primary care provider that's in-network. Surprise medical bills, which a patient has to pay out-of-pocket, are more commonly seen from a visit to a radiologist, anesthesiologist, pathologist or other specialist.

The bill comes at a time when the popularity of narrow-network plans has risen in an attempt to stabilize premium costs.

However, some physicians have opted against joining narrow networks, mainly due to disputes over lower reimbursement rates.

Nearly 7 out of 10 individuals with unaffordable out-of-network medical bills did not know the healthcare provider was not in their plan's network, according to a Kaiser Family Foundation survey published earlier this year.

New York and Florida have enacted similar laws, while Georgia and other states are considering legislation.

Twitter: @SusanJMorse