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Update: Lawmakers Pass Measure to End Surprise Out-of-Network Medical Bills

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 (Andy Warner/KQED)

Update, 5:00 p.m., Wednesday Aug. 31:
The California Assembly passed AB 72 late this afternoon. The bill heads next to Gov. Jerry Brown’s desk. It passed by a huge margin with bipartisan support, unlike a similar bill last year which stalled by three votes on the last day of the 2015 legislative session.

Original Post:
When Nancy Randle prepared for the birth of her third child, she was careful to play by the health insurance rules: She got referrals and went to her insurer's recommended hospital.

What she didn’t know was that some doctors, like the one who did a hearing test on her baby, were out of network. She didn’t think to ask. After she came home, she got a surprise bill for that test: $250.

"I didn’t even realize this was a loophole or that it would affect me," Randle said.

The loophole occurs when out-of-network doctors -- anesthesiologists, radiologists and others -- provide care at a patient's in-network hospital or clinic, but charge their out-of-network fees.


To address the issue, a bipartisan group of state legislators introduced AB 72 to put a stop to surprise, out-of-network bills for non-emergency services. Assemblymember Rob Bonta (D-Alameda) is one of the bill's six co-authors.

"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," Bonta said.

If signed into law, patients who go to in-network health facilities will pay in-network prices. Insurance companies would compensate out-of-network doctors for treatment, either at the average procedure rate for the region or at 125 percent of what Medicare pays, whichever is greatest.

Bill opposition comes from groups representing doctors, like the Association of American Physicians and Surgeons. Dr. Jane Orient is the executive director.

"The quality of care will go down, and patients will have fewer choices," Orient said.

She says doctors won’t be compensated at the rate they need to keep their practices running.

A similar bill failed on the final day of last year’s legislative session, but AB 72 looks like it will see a different outcome, given revisions to last year’s text and wider-ranging support.

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