Frontlines Archive

CUA joins coalition challenging constitutionality of AB 72

The CUA has joined with a coalition organized by the American Association of Physicians & Surgeons (AAPS) that has challenged the constitutionality of AB 72 – legislation that fixes the fees of any physician who does not contract with a patient’s PPO, HMO, or IPA and provides care at a contracting facility.  In addition to fixing prices, the laws stemming from AB 72 hamper the ability of California physicians to contract with insurers. We believe AB 72 is devastating to the private practitioner and for non-contracted doctors who see patients in hospitals.

Governor Brown signed AB 72 (Bonta) to put a stop to “surprise billing” but he left intact the ability of Medical Provider Networks (MPNs) and insurance companies to skimp on medical coverage, for instance, by not retaining enough specialists.

How did we get AB 72? The genesis of this bill is a fight between corporate medicine and physicians. Health plans that promise to provide future medical care in return for a lump sum paid up front by insurers want to be able to continue to indenture out‐of‐network treating physicians to provide cheap labor in the circumstance where the health plan has failed to have a contracted physician available.

Disclosure: The CUA has excerpted explanatory text  from “The Weinmann Report” at the blog site: politicsofhealthcare.com. We believe this source to be reliable and authoritative.  You can read more on this link: http://politicsofhealthcare.blogspot.com/search?q=72.

When the MPN’s patients then need the specialist that the MPN can’t provide, “out-of-network” specialists are summoned. The “out-of-network” physicians, since they’re not in-network, may bill at higher rates than the MPNs — this practice has resulted in unpleasant surprises to patients when they learn that the medical bills they’re getting are higher than expected because the specialist called in at the last minute was “out-of-network.” This practice ends with Bonta’s legislation which unfortunately hits doctors but spares MPNs.

Here’s the scoop: the MPN purposefully retains too few doctors, especially specialists, in order to avoid paying “in-network” specialists. This practice is known as “network contraction” or “in-network sharing.” It allows more of subscribers’ premium payments to be used for things other than patient care, like executive compensation for instance. Bonta’s bill could have fixed this aspect of the problem along with the smack-down on “surprise billing, however, this did not happen. The likely reason was so as not to upset the insurers and MPNs .

Because AB 72 leaves ‘network contraction’ as a viable business method, eliminating only the ‘surprise billing’ element, the CUA recommends that CMA seek legislation requiring MPNs to field fully staffed networks so that “out-of-network” doctors are no longer needed. The legislation needed would require that MPNs be fully  staffed or risk penalties for non-compliance. Fully staffed’ means that they include a complete range of medical and surgical specialists.