New bill targets surprise billing by hospitals
A series of articles by Vox highlighted the issue over the last month culminating with the stories of two San Francisco residents who were covered by health insurance but still hit with over $20,000 in non-covered charges for emergency care after visiting Zuckerberg San Francisco General Hospital. Though out-of-network for most private insurance carriers, Zuckerberg is the only Level I trauma center in the city, so the only choice in many cases.
The new bill would prohibit a hospital from pursuing a patient for a bill over and above his or her regular co-pay or deductible charges. Second, the bill limits the amount that non-contracted hospitals could charge for their fees to 150 percent of Medicare rates or the “average contracted rate” in the geographic area, whichever is higher.
In a press conference on February 25th announcing the bill, Asm. Chiu highlighted the reasons for the new bill,
“If you’re incapacitated or undergoing a life-threatening condition, you don’t have the ability or time to decide what hospital to go to.” Chiu continued, “After a trip to the emergency room, the only thing you should be focused on is getting better, not a bill for tens of thousands of dollars.”
California already has protections in place against surprise billing by individual doctors that are not chosen by consumers but out-of-network, like anesthesiologists. However, the law does not currently apply to entire hospitals that are out-of-network.
Though the federal Affordable Care Act (ACA) does require health plans to cover out-of-network hospital emergency care at usual and customary rates (UCR), there are no specific standards as to what usual and customary should be. Often plans set their UCR much lower than what a hospital charges leaving patients open to liability for the remainder of the charges.