California’s new insurance reform law, AB 72, draws attention to the significance of insurance eligibility verification, which ensures transparency about patients’ financial responsibilities before medical services are provided. Many patients who receive out-of-network services end up receiving surprise bills. AB 72 is meant to ensure that consumers are not unduly burdened by surprise bills from out-of-network charges that were outside of their control.
A Consumer Reports National Research Center survey conducted in 2015 on consumer problems with insurance bills revealed that:
- Nearly one out of four Californians had received a bill for which the insurer paid less than expected (23%)
- Of these, nearly 1-in-5 was charged at an out-of-network rate when they thought the provider was in-network (18%)
- Up to 63% of Californians believed that physicians at an in-network hospital are also in-network.
Under California’s new insurance law, if a patient obtains medical care at the in-network facility of the plan but receives treatment or services from an out-of-network provider, the patient would pay the same co-pays and other cost sharing as if they were in-network.
When it comes to payments, no one likes surprises – neither the patient nor the physician. Patients should not get surprise bills and physicians should not find that they receive lower-than-expected reimbursements for the services they provided because they were out-of-network. Specialists contract with medical billing outsourcing companies to get appropriately reimbursed for the services they provide. California’s new medical bill law AB 72 is intended to protect patients from surprise medical bills, but according to a report in California Political Review, physicians who prefer to stay out-of-network are protesting that “AB 72 lowers quality and quantity of doctors and surgeons”.
Medical practices can effectively manage patients’ financial responsibilities by educating them about their out-of-network responsibilities. An article in Medical Economics on billing out-of-network payments cites an expert as saying, “A clear understanding with the patient about (his or her) financial responsibilities is critical.”
He poses a very pertinent question. He asks, “When do you want to find out they can’t afford a service – before or after it’s performed?”
Practices can ensure this transparency with the help of an insurance verification specialist. By verifying the patient’s plan, referred physicians can inform the patient if they are not in his or her insurance network. Once a patient is informed about the medical billing situation, the physician or practice can focus on collecting the patient’s portion of the bill.
However, problems arise when patients may not have access to the care they need because the in-network hospital does not have sufficient hospital-based specialists. When they bring in out-of-network physicians, a patient could unsuspectingly receive care from an out-of-network physician or service at an in-network facility.
The fallout of AB 72 remains to be seen. Critics say that it will allow insurance companies to use government regulations to make low payments to physicians and increase their own profits. Physicians can go to court if they are not happy with the reimbursement, but legal costs would outweigh the benefits.
Patients could also be affected, especially those seeking emergency care. Sunshine State News notes that as physicians can no longer negotiate fees with insurers, they may leave various hospital on-call panels that provide emergency and safety-net care for uninsured and under-insured Medi-Cal patients. As a result, these panels will not be able to provide sufficient specialty services.