People struck by surprise medical bills are easy to find.
Virginia Hoover, of Camarillo, suffered a shattered right leg and broken back when her parachute got tangled in a skydiving accident in 2008. Costs of a trauma doctor who helped coordinate her care weren’t covered by her insurance company.
“It was astronomical,” she said of the out-of-network bill.
Kimberly Bawa, of Somis, was referred to a specialist by her primary-care doctor. She learned after treatment that the specialist wasn’t in her network.
“A couple of thousand dollars,” she said is what it cost her.
Bawa’s husband is a respiratory therapist and home health nurse who tells stories of patients who don’t know whether their providers are covered. They find out when they get a bill.
“I hear about this on a daily basis,” Joe Bawa said.
A bill that passed through the California Legislature is designed to block one stream of surprise bills — the flow triggered when people go to hospitals or outpatient centers covered by their insurance companies but are treated by a provider who isn’t part of the network. That provider often may be a radiologist, an anesthesiologist, a pathologist or a provider the patient barely knows.
If Assembly Bill 72 is signed by Gov. Jerry Brown by the end of September and becomes law, patients who go to a covered facility would only be charged in-network fees, no matter who treats them.
A 2009 California Supreme Court ruling prohibits emergency room doctors from billing patients for out-of-network costs not covered by an insurer. But for procedures that aren’t emergencies, providers send out-of-network bills to patients.
“We’ve seen up to, in some places, $100,000,” said Betsy Imholz, special projects director for the Consumers Union. “That’s unusual, but it can definitely be in the thousands.”
Under the proposed law that would take effect in July 2017, many of those bills should stop. Out-of-network doctors who provide care at an in-network hospital or outpatient center would be paid the higher of two prices: the insurer’s average contracted rate or 125 percent of what Medicare pays for the procedure.
The bill also would set up a process that allows doctors to dispute reimbursement and make an argument for higher payment.
“It takes the consumer out of the middle,” Imholz said. She cited a 2015 survey that showed one out of four people had been charged out-of-network prices when they thought they were in network.
It happened to her, too. She went to an outpatient center for a procedure. The surgeon was part of her insurer’s network. The anesthesiologist wasn’t.
“I got a nice $800-plus bill,” Imholz said. “It was unexpected.”
The bill wouldn’t cover everyone. About 6 million Californians work for employers who are self-insured, meaning the companies take on the financial risk of covering health care costs. They’d be exempt from the proposed law.
People mistakenly referred by their doctor’s office to an out-of-network specialist may not be protected, either. Instead, the bill targets people receiving services from teams of providers at sites that include hospitals and outpatient centers.
“There’s a parade of doctors who come through. You don’t necessarily know who they all are,” said Anthony Wright, executive director of Health Access California, a bill sponsor. He said someone in that parade often does not have a contract with the patient’s insurer.
“It’s been a loophole in our system for decades,” he said.
As it passed through the Legislature, the bill’s opponents included groups that represent cardiologists, orthopedic doctors, anesthesiologists and other specialties.
Some of them worry the bill would let insurers off the hook. Currently, insurers can designate a hospital or surgery center as in-network even if they haven’t negotiated contracts with all the people routinely involved with care, said Dr. Karen Sibert, president-elect of the California Society of Anesthesiologists.
By setting an out-of-network rate, the bill may reduce the incentive for insurers to negotiate contracts with providers, she said.
Access to care can be affected if doctors decide the reimbursement is too low.
“There’s going to be a point where providers say, ‘I can’t do it at this rate,’ ” Sibert said.
Insurers say they want incentives, too, ones that persuade providers to accept their contracted rates.
“We have no control over who is involved in providing treatment or care,” said Nicole Kasabian Evans of the California Association of Health Plans, responding to scenarios where a surgeon is in network but an anesthesiologist is not. “The easiest way to resolve these disputes is for providers to contract with health plans.”
When Kimberly Bawa received her out-of-network bill, she already had received the care. She didn’t think she had any options, so she paid it.
Experts said Bawa’s case probably wouldn’t be covered by the proposed law because her referral came from her primary-care doctor. She suggested a more elementary change in the health system. If a specialist is going to charge her out-of-network rates, she wants to know.
“It’s not rocket science,” Bawa said. “Just let me know.”