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Covered California and Obamacare related questions from consumers, employers and agents are answered by Phil Daigle with the best information available at the time. Archived entries may no longer be accurate as the Covered California and Obamacare knowledge-base is evolving quickly. TO REQUEST A PERSONAL RESPONSE INCLUDE EMAIL ADDRESS.

Physician Balance Bill?

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Question: I have Anthem Blue Cross silver 94 PPO. I had to visit to ER in March and I verified the facility was in network. I received a balance bill from the Doctor demanding me to pay what anthem did not pay. Do I have to pay this bill?

Answer: You are not alone. A recent Consumers Union survey found that one-quarter of Californians who had hospital visits or surgery in the past two years were charged an out-of-network rate when they thought their provider was in-network.

Emergency physicians in California are barred from "surprise" balance billing. Health plans pay non-contracting physicians the plan's average contracted rate or 125% of the Medicare rate, whichever is greater. Your insurer, Anthem can tell you what portion of the doctor's bill you are required to pay under your plan of coverage.

A new California law goes into effect on July 1, 2017 that extends the "no surprises" balance billing restrictions to non-emergency medical services. The bill, passed by the California General Assembly after months of tough negotiations, also tightens requirements on health plans to offer adequate provider networks.


A California law went into effect on July 1, 2017 that extended the “no surprises” balance billing restrictions to non-emergency medical services as well as emergency medical services. It appears, this law was not in effect at the time of your daughter’s treatment.

Your article is very interesting to me. A few years ago, my daughter was admitted to a local hospital through the emergency room due to a TBI, fractured skull, brain bleed etc… She was in the PICU for six nights. Every single physician that did rounds and saw her during her stay billed me several hundred dollars. We appealed through the insurance company, but they said that the doctors were out of network (the ER and hospital were in network), so I paid it. Now, reading your article, it sounds like a hospital stay when admitted through the ER is considered emergency services, even prior to the July 2017 change in the law. I can’t seem to verify that elsewhere. Is that correct?

As a follow on, I just received an email notice to agents from Blue Shield that they are implementing the new law on July 1 for all or most of their plans, regardless of renewal date. Perhaps other insurers will do the same.

Just to reiterate, the new law affects inpatient and outpatient non-emergency medical care at a hospital in your insurance network — all providers must either contract with the same insurance companies the hospital contracts with or accept the hospital’s contracted rates for their services if they are out-of-network providers — no balance billing will be allowed. Emergency care at out-of-network hospitals must be covered under the PPACA, and out-of-network services provided to an patient as a result of an emergency room visit or an inpatient whose hospital admission was through an ER in- or out-of-network cannot be balance billed.

The Knox-Keene Health Care Act already contained provisions that prohibited some forms of balance billing for emergency services. The new law Phil referred to that takes effect on Saturday, July 1, affects all “newly issued” group or individual health plans and all “renewed” plans on or after that date. If your health plan at work or individually purchased has a plan year other than July 1, the new law will not affect that plan until its renewal date (or replacement with another plan).

The new law is more far-reaching in its scope, however, because it is not limited to only emergency services. A person might be admitted to a hospital for some reason other than through the emergency room. But that person is still exposed to laboratory or radiology or other departments whose employees are contracted to the hospital, not employed by the hospital, and who might not be contracted with your (or any other) insurance company, and is thus an “out-of-network” provider. This has greater import for HMO subscribers who cannot use an out-of-network provider without prior authorization from their insurance company. They don’t get a “balance bill,” they get the whole bill.

This is going to end. When fully implemented, no hospital-contracted provider will be able to stick a patient with 100% of a bill for services rendered or the balance thereof. Instead, if the hospital is contracted with your insurance company, all of their subcontractors will be required to accept as payment in full the amount that would be paid to the hospital if it were providing the same service with its own staff. This affects surgeons, hospitalists, other clinicians and physicians, and commonly outsourced services including laboratory, radiology, nuclear medicine, and more.

I know what it’s like to get a “surprise” bill. I was hospitalized for a tibial plateau fracture that happened in Cabo San Lucas on February 1. After paying $35,000 cash up front for the ER in Cabo and an air ambulance ride to San Diego (all covered by my health insurance that no one in Mexico will accept, even though they have contracts with the same insurance company), when admitted through the ER to Sharp Memorial Hospital (I give them 5 stars for my care), I was told that my surgeon would be Dr. X and my hospitalist would be Dr. Y.

Knowing that I would be stuck with their bills if they weren’t in my Blue Shield network, I checked the network directory and found both of them there. But two or three week later, I get bills from a third party that these same doctors bill their hospital services through, which is NOT contracted with ANY insurance company … allowing the physicians to be paid more than they have agreed to accept as network providers, and exposing me to 100% of over $6,000 of expenses.

Aside from being unethical, it was also in violation of Knox-Keene, but it took four months of arguing and grieving the claims denials before someone at Blue Shield finally said, “Oh, wait, you were admitted through the ER?” DUH! “Oh, then they can’t bill you more than we would pay the hospital for the same services” and the bills were “adjusted” and have now been paid.

I’ve been a licensed agent for the past 20 years. I know how this works. I pity those who don’t and have allowed their insurance companies to skate out from under claims that should have been paid. Hopefully, the new law will correcct this injustice eventually.

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