Legislation Proposes Ban on Balance Billing

                                                   By Sue U. Malone, Executive Director

Sue U. Malone

The California Association of Health Plans (CAHP) is sponsoring legislation to prohibit hospital-based physicians from billing patients when they don’t have a contract with the patient’s health plan. The bill purports to protect patients, but its actual effect will be to put physicians at the mercy of the health plans. CAHP says patients face huge bills for emergency and other hospital medical services because physicians are unwilling to contract with health plans. Many local medical groups have joined CAHP, purporting to represent physician opinion in supporting this legislation. Consumer groups also have joined the health plans, saying patients are unfairly stuck with huge bills.

Assemblyman Leland Yee, who represents portions of San Mateo County and San Francisco, is carrying this legislation, AB 1321. I hope you will seriously consider opposing this bill. AB 1321 has passed out of the Assembly Health Committee and is now in the Assembly Appropriations Committee, where it sits in the Suspense file, but can be taken out and voted on at any time, most likely by the end of this month. AB 1321 would allow health plans to pay whatever they wish to hospital-based physicians. Health plans already play hardball, offering “take it or leave it” terms when negotiating contracts with physicians and at every contract renewal. This bill would eliminate the only negotiating leverage that physicians should have, the right to say no to a bad contract. If CAHP is successful in getting legislation banning balance billing by hospital-based physicians, it’s likely they will want to expand the prohibition to all physicians. Rather, any legislative reform should place the onus on health plans to pay claims to noncontracting physicians when they are received.

There are two other pieces of legislation addressing balance billing, both of which take a more reasonable approach in attempting to address this issue, though you may not find them entirely palatable. Senator Deborah Ortiz, chair of the Senate Health Committee, has introduced SB 417, which prohibits hospital-based physicians from billing patients until after they have billed the patient’s health plan and received either partial payment or denial of the claim. The bill also requires the Department of Managed Health Care to investigate physician complaints regarding unfair payment practices. SB 417 bill has passed out of the Senate Banking, Finance, and Insurance Committee and is now in the Senate Appropriations Committee.

Assemblyman Koretz plans to strip an existing bill, AB 711, which now deals with the Healthy Families Program, and carry the bill requiring health plans to pay the noncontracting physician’s fee, and then if the plan believes that the physician charges are excessive, it can pursue a dispute resolution process. CMA supports AB 711 and has not taken a position on SB 417.

It is likely that these bills will get to the floor of their respective houses, so you are urged to write or call legislators representing our county. Contact information follows:

Members of the California Assembly                                                                                     

The Honorable ___________________    

Member of the Assembly                                               

State Capitol                                                                                     

Sacramento, CA 95814                                                  

12th District - Leland Yee, Ph.D.                                           

Tel: 415/557-2312  Fax: 415/557-1178                               

Tel: 916/319-2012  Fax: 916/319-2112                               

19th District - Gene Mullin                                                      

Tel: 650/341-4319  Fax: 650/341-4676                               

Tel: 916/319-2019  Fax: 916/319-2119                               

21st District - Ira Ruskin

Tel: 650/691-2121  Fax: 650/691-2120

Tel: 916/319-2021  Fax: 916/319-2121