Ranks of In-Network Specialists Rose Following Passage of California Surprise Billing Law

August 27, 2019

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Source: FierceHealthcare

California legislation to prevent surprise billing did not result in a reduction of in-network doctors, a new study from the top insurer group found.

After California passed its surprise billing law in 2016—under which doctors are paid either the physician’s average contracted rate (ACR) or 125% of the Medicare reimbursement rate—officials at America’s Health Insurance Plans (AHIP) found the number of in-network doctors increased by 16%.

AHIP looked into the figures in response to critics who’ve raised concerns the law could cause network participation to go down, Jeanette Thornton, senior vice president for product, employer and commercial policy for AHIP, told FierceHealthcare.

“We wanted to prove the point that it wasn’t the case,” Thornton said.

In the study, published on AJMC.com, the website of The American Journal of Managed Care, AHIP asked insurance providers for the change in the total number of in-network providers between July 1, 2017, and July 1, 2019.

Specifically, they requested information about all physicians regardless of specialty, as well as specialists in general surgery, emergency medicine, anesthesiology, diagnostic radiology and pathology.

They received results from 11 different health plans representing 96% of covered lives in the fully insured commercial market in California, excluding Kaiser Permanente enrollment. They excluded Kaiser Permanente, the largest health plan in California which serves more than half the state, they said, because it has exclusive contracts with two Permanente Medical Groups.

“If you’re a Kaiser Permanente member going to a Kaiser Permanente facility for care, you’re not going to get a surprise medical bill,” Thornton said.

On average, they found, in-network specialty doctors either remained flat or increased by up to 26%.

The number of in-network pathologists rose by 1% while the number of in-network general surgeons and emergency medicine physicians rose by 10%. The number of in-network anesthesiologists rose by 18%, and diagnostic radiologists jumped by 26%.

There were several limitations to the study. For example, it was not representative of all local markets in the state. The timing was also limited to early experiences. It also does not address concerns raised by critics that the law could further drive provider consolidation, which has trended upward in recent years, because it did not examine networks by hospital.

But it does provide evidence for the federal policy question AHIP believes could be effectively applied to other states, she said.

Both the Senate and the House have taken up different legislation to address the practice of balance billing, or requiring patients to pay the difference between what their insurer is willing to pay and what the doctor says they’re owed. That legislation has been scheduled for markup next week.

Hospitals have argued in favor of “baseball-style arbitration” between providers and payers when there is an out-of-network payment dispute rather than using a rate tied to the median in-network fee for treatments. Congress is expected to take up the surprise billing measures when the members return from recess after Labor Day.

 

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