Doctors Fight "Devastating" Bill in California Which Would Limit Revenue From Self Pay Patients

The Association of American Physicians and Surgeons (AAPS) is repeating their plea to California Governor Jerry Brown, asking the governor to veto a “devastating” new bill under consideration in the California Assembly that would limit the amount patients could pay healthcare providers for their services.

In their second letter to Governor Brown on this subject, the AAPS calls Bill AB 72 “anti-physician, anti-patient, and anti-charity care,” saying the bill, if passed, “would have a dreadful effect on the availability of care to patients in California.”

The bill would prevent healthcare providers from billing more than 125% of the amount Medicare reimburses for similar services when a patient gets care at an out-of-network facility and would prohibit providers “from engaging in an unfair payment pattern,” theoretically allowing patients to seek care without worrying about unexpected bills.

The Santa Monica Observer reports that the proposed legislation is currently supported across party lines within the Assembly and by a variety of local and national advocacy groups. The bill also has the support of the Consumers Union, which says in a statement that they “urge” the Assembly to pass the bill in order to “provide protection against overwhelming medical bills and debt.”

The AAPS responds to concerns about patient protection by saying that bills like AB 72 will make it difficult, and in some cases too costly, for providers to offer care to all patients. The physician organization says that “already many physicians cannot afford to see MediCal or Medicare patients, unless they opt out” and that AB 72 “will greatly worsen provider shortages, for all patients, by allowing insurance companies to reduce rates for all insured services to something comparable to Medicare.”

The California Medical Association is not formally opposing AB 72, but has criticized the thinking behind it, saying the problem that lawmakers want to address is caused by “increasingly narrow provider networks” that force patients to pay higher rates for specialized treatment, and that the bill would do nothing to “penalize health plans for carrying inadequate networks.”

insideARM Perspective

Because the revenue cycle management process with out of network or “self-payers” is much more complex and time consuming, the limits in this bill may have the effect of making it more difficult for doctors to be able to afford treating self-pay patients. The California Assembly is attempting to solve a real problem for patients; but their proposed solution may produce an unintended consequence.

The AAPS, in their letter to Governor Brown, writes about a similar but “less extreme” regulatory attempt in Florida which has ultimately led to drastically increased costs for doctors through extra “time and fees” dedicated to the payment process, as well as “additional fees if they lose” a dispute with a patient or insurance provider. The AAPS says their fear is that a similar attempt in California would not fix the issues with narrow health care plans and would instead “create additional problems, notably a dangerous drop in access to medical care.”