CA to Limit Balance Billing

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On September 23, 2016, California Governor Jerry Brown (D) signed bill AB 72 into law that will limit patient exposure to “surprise medical bills.”  The law will limit the cost-sharing obligation of patients who receive care from non-contracted providers while receiving treatment at an in-network facility.

For plan or policy years beginning on or after July 1, 2017, if a plan participant receives covered services from an out-of-network provider during or because of a stay in an in-network facility, the participant’s cost-sharing obligations will be limited to in-network amounts unless the patient consents in writing to receive care from an out-of-network provider.  Absent such consent, the out-of-network provider will be limited to payment at the greater of the average contracted rate or 125% of the amount Medicare reimburses on a fee-for-service basis for the same or similar services in the general geographic region in which the services were rendered.

AB 72 applies only to fully-insured health plans.  It does not apply to self-funded group health plans.