Wednesday, January 3, 2018

AB 72 (Bonta): Surprise! Network contraction is the new big bad wolf

Network Contraction, protected by AB 72,  deserves to be obliterated 

In healthcare plans including workers' compensation medical provider networks or MPNs the sick or injured person is at a distinct disadvantage. The reasons include legislation that was intended to help but which missed the mark. 

For review: "surprise billing" means the method by which out-of-network providers were allowed to bill patients more for services than their in-network counterparts. Assemblyman Bonta sought to correct this situation with Assembly Bill 72 which Governor Brown signed into law on 9/23/16. Unfortunately, the bill 
didn't go far enough because it left "network contraction" intact.

"Network contraction" means the method by which Medical Provider Networks (MPNs) or healthcare plans generally go about making sure they are not fully staffed with specialists. It is how the plans enable "out-of-network (OON) providers." This mechanism allows the plans to keep more of the premium dollar by deflecting costs out-of-network.  This technique, known as "in-network cost sharing," opens the door to non-network providers. This method allows healthcare networks, private plans as well as workers' comp, to understaff their networks -- then when the need arises they're obliged to call in outside consultants or OON providers. In private plans the extra cost is paid by the patient. In workers comp plans the patient is obliged to find the necessary specialist and pay the piper unless by legal means the workers comp entity can be made to pay.

Our recommendation is that AB 72 be expanded, either by amendment or by newly proposed legislation. The legislative language this publication recommends for legislative year 2018 is as follows:

"Healthcare plans and workers' compensation MPN plans shall be required to maintain full provider lists covering all specialties. The plans shall provide these lists to their in-network providers and to all of their subscribers and customers. Networks that fail in this requirement shall be penalized by fines and disciplinary action to be decided by further legislative action against the managers and officers found to be or to have been non-compliant." 


Physicians Advocacy Council, "We're on your side!," 08/07/17

"AB 72 (Bonta) targets physicians but leaves insurance companies and MPNs unscathed," The Weinmann Report, 10/06/16

"Veto or Amend AB 72 (Bonta)," The Weinmann Report, 09/16/16

"AAPS vs. Brown - Protecting Physicians and Patients from AB 72," Association of American Physicians & Surgeons," 10/20/17

"AAPS Files in 'Surprise Billing' Case, AAPS News, 09/2017

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