Friday, August 12, 2016

AB 72 (Bonta): a pending bait and switch bill: Oppose Unless Amended

AB 72 (Bonta) is supposed to be consumer-friendly legislation since it'll do away with "surprise billing." The term, "surprise billing," refers to instances where patients, unable to secure medical services within their own network or managed care plan, are obliged to retain an out-of-network physician who then may charge usual and customary fees. The out-of-network physician is not bound by network rates because he has not contracted with the network. The "surprise" is to the patient who finds out (1) that he is not covered by the network to which he's been paying annual enrollment fees and (2) the out-of-network bill may be considerably more than one would have expected from an in-network provider. The patient caught in this trap has good cause to be angry.

AB 72 is supposed to "cap" out-of-network provider billings. The technique is also a "surprise" because in the guise of protecting patients it actually harms them while bolstering the profiteering mantra of the insurance industry. It is called "in-network cost sharing."

Susan Hansen, MD, neurologist, Mountain View, states that "AB 72 is a rate-setting bill that will devastate physicians ... by setting rates at 125% of Medicare." Hansen points out that no plan is likely to contract for a higher rate than the ceiling set by legislation and that "this bill removes the last chair in the musical chair game that price-fixing has caused" because "Medi-Cal, Medicare, and WC (workers comp) fees are typically set below the cost of doing business." Hansen then points out that this mechanism "forces physicians to cost-shift to the PPO and uninsured patients."

The tricky-dick part of AB 72 is that it actually forces all physicians to become de facto members of provider networks. Once this squeeze has been foisted onto the doctors, the door will be wide open for networks to increase executive compensation and corporate profit since they will now save money by underpaying physicians. Patients should soon realize that their premiums are being used to reward administrators, not the physicians and surgeons for whom they thought they were contracting. AB 72 is a fancy version of bait and switch. 

The trouble is that this "in-network sharing" model will  create understaffed networks -- that's how patients will suffer. Understaffed networks means fewer and fewer available physicians and surgeons -- the money moguls will have succeeded in putting profits before patients. AB 72 will be the tool. 

Eileen Natuzzi, MD, surgeon, San Diego, puts it this way: "... this mess was created by insurance companies and plans underpaying doctors, not doctors billing too much."

How to take action: We  expect this bill to go to the State Senate on or about August 16th. Next it's scheduled for the Assembly. Our recommendation is OPPOSE UNLESS AMENDED.

Here is a proposed amendment:  "health-care plans should be required to maintain full provider lists covering all specialties. The plans should provide these lists to their in-network providers and to all of their subscribers and customers.  Networks that fail in this requirement should be penalized by fines and disciplinary action against their managers and officers." 

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