Overview
A surprise bill is an unexpected medical bill that a patient receives when they unknowingly receive care from an out of network provider. It happens when a patient receives medical care at a facility within their insurance network but is treated by an out of network provider without consent.
This surprise billing, which is commonly known as balance billing is mostly charged in situations where a patient receives emergency care from specialists like anesthesiologists, radiologists, or surgical assistants who are not in the patient’s insurance network. The surprise in this balance billing lies in the result where the patient is being charged more than the typical in-network rate, ultimately leading to unexpected, higher out-of-pocket costs.
Air ambulance services are another common cause of surprise bills. If the air ambulance provider is out-of-network, even if the patient was transported from an in-network hospital, the patient may face a surprise bill as a result.
These surprise bills were cutting a huge amount out of Californian’s pockets and causing their credit score to lower highly, but the Consolidated Appropriations Act of 2021 within medical billing laws in California has proposed a solution in the form of the “No Surprise Bill Act California.”
What Is No Surprise Bill Act & How It Works with Medical Billing Laws in California?
The No Surprise Act is a federal law that protects patients in the USA from surprise medical bills, particularly from out of network providers. It works in alignment with other medical billing laws in California to provide stronger protection against balance billing.
This law ensures that patients are only charged their in-network rates when they seek care at an in-network facility, even if some services are provided by out of network (OON) doctors. It is designed to limit out-of-network medical billing practices and ensure transparency in the costs of medical care.
Let’s discuss in detail how the No Surprise Bill Act works in alignment with medical billing laws in California so you can make informed decisions about your billing practices.
AB72 Extension of No Surprise Bill Act in California
According to medical billing laws in California, the continual of the No Surprise Bill Act California is AB72*, which protects patients from getting unexpected bills when they get care at in-network facilities. It has been designed to keep patients from paying high out-of-network costs when they have done their part by choosing an in-network facility. Being a provider, what you need to understand about AB72 medical billing laws in California is:
What Are the Key Components of AB72 for Medical Billing Laws in California?
1. In-network Billing Only: According to California medical bill collections laws, if a patient goes to an in-network facility, they should only be charged in-network prices on their bill, even if they happen to be treated by an out of network provider. The focus is on keeping costs consistent and fair for the patient. If you are unable to learn the region’s current government-decided out-of-network cost, you must hire expert medical billing services in California to avoid penalties. Transcure can connect you with our medical billing experts, who are trained in all of California’s payment schedules.
2. Clear Communication Rules: Out of network providers aren’t allowed to send a bill directly to the patient until they know the exact in-network cost-sharing amount from the insurance. If they do send a notice, it must clearly state that it is not a bill.
3. Payment Limits: Out-of-network doctors get paid based on a fair set rate, which is usually either 125% of the Medicare rate or the average amount that other local doctors receive. This approach helps make sure they’re compensated fairly while keeping patient costs reasonable.
4. Limits on Refunds for Overpayments: If a patient pays more than the in-network amount, the medical billing time limits california says that the doctor must refund the extra money within 30 days. If not, the doctor has to pay interest on that amount, which is 15% per annum, beginning with the date payment was received from the consumer.
5. No Collections: Providers can’t send patients to collections or take legal action until at least 150 days after the first bill. Plus, you cannot garnish wages or put liens on primary residences to collect unpaid bills. You can only send to collections the in-network cost-sharing amount the consumer has failed to pay.
Independent Dispute Resolution Process So You Can Charge Your Desired Payment while Being an Out of Network Provider!
AB 72 also created a way for out-of-network providers to ask for more money if they feel the set rates, including 125% of Medicare or the insurer’s average contracted rate, are too low. This is called (IDRP) the Independent Dispute Resolution Process. Both providers and insurance companies must take part if one side wants to dispute the payment. If one side requests IDRP, the other side has to join in. The decision made by IDRP is final, but either side can still take the case to court if needed.
Transcure medical billing company in California can help you claim your rightful payments. You can set up a free consultation with our experts anytime.
How Patients Can Voluntarily Use Out-Of-Network Benefits as Per Medical Billing Laws in California?
Most people in California have HMO insurance, which doesn’t cover OON services. However, about 20% of people have PPO plans that cover OON services. These people can choose to get care from out of network providers and agree to pay the extra costs if they follow these rules:
1. Written Consent: They must sign a consent form at least 24 hours before getting care.
2. Separate Consent: The out-of-network doctor must get this consent separately from other documents and not at the time of admission or right before the procedure.
3. Cost Estimate: The provider must give a written estimate of how much the care will cost and can’t charge more than that amount unless something unexpected happens.
4. In-Network Option: The consent must tell the patient that they could get in-network care for a lower cost.
5. Language Translation: If the patient speaks a different language that Medicaid recognizes, the consent form and cost estimate need to be translated into that language so the patient fully understands what they’re agreeing to.
6. Out-of-Pocket Costs: The agreement should clearly state that any charges from out-of-network care won’t count toward their in-network deductible or the annual limit they pay out of their own pocket.
No Surprise Bill Act California is effective in the state as AB72 and has undergone many amendments to provide more effective and affordable care to patients. Medical billing laws in California have added some more extensions in AB72, such as AB716 in 2024. Let’s discuss this extension so you can have comprehensive knowledge about balance billing California.
AB 716 for Protection Against Ground Ambulance Balance Billing California
In California, out of network ground ambulances charge too high; their bills can easily reach up to $1000 to $2000, depending on the provider and insurer. This is much higher than the government rates, which are normally based on Medicare or Medi-Cal fee schedules.
These large surprise bills were causing financial stress for Californians using ground ambulance services from out of network providers. That’s why medical billing laws in California introduced another continuation of the No Surprise Bill Act AB72, which is AB 716. AB72 deals only with emergency and some other medical services, but AB 716 deals with the payment of ground ambulance services. Passed in October 2023 and effective from January 1, 2024, this law aims to stop out-of-network ambulance services from charging more than what a patient would pay for in-network services.
1. Cost Sharing: Patients will only be responsible for paying the in-network cost-sharing amount, even if the ambulance provider is out of network.
2. Restrictions on Collections: By California medical bill collection laws in section 1797.233 (2), out of network providers can only pursue the in-network cost-sharing amount from patients and must wait at least 12 months before taking collection actions, such as reporting to credit agencies.
3. Reimbursement for Providers: Insurance companies are required to reimburse out-of-network ambulance providers based on local government rates or a rate determined by regulations, preventing overcharging.
4. Protection for Uninsured Patients: According to 1797.233 (b1), uninsured or self-pay patients cannot be charged more than the amount set by Medi-Cal or Medicare, whichever is greater.
5. Reporting and Oversight: The law requires the state to publish annual reports showing ambulance rates by county, ensuring transparency in ambulance billing across the state. If you are not sure about your county’s general rates you must consult medical billing California experts, such as Transcure. We can help you eliminate the hassle of incorrect billing.
6. Sanctions and Legal Implications: Violations of this law can lead to legal consequences, including penalties under the Knox-Keene Health Care Service Plan Act of 1975. A willful violation of these requirements by providers or health care plans could be considered a crime under medical billing laws in California.
AB 716 is part of the broader effort to improve medical billing laws in California, ensuring that patients are protected from excessive charges and that ambulance services remain fair and transparent for all involved. This law offers significant relief to patients who previously faced large out-of-pocket costs after emergency situations while also setting clear guidelines for healthcare providers and insurers.
Looking Forward
To wind up, healthcare providers must be aware of and adhere to the medical billing laws in California. The No Surprise Bill Act protects the patient from surprise bills coming from out-of-network providers, especially for emergency cases, and shifts the burden to the providers and insurers in cases of dispute over bills. As a provider, this not only improves the processes for billing but most importantly, instills trust in the patients. This reduces the likelihood of disputes or delays with payments.
Additionally, knowledge of the California statute of limitations on medical debt enables providers to minimize the risk of legal complications by managing collections within the legal timeframe. Looking forward, providers will need to stay current with these ever-changing laws to maximize their billing practices and ensure that the system remains friendly and transparent to the patient. Transcure, the most trusted out of network billing company in California, can help you stay compliant and ensure accurate billing practices.
Frequently Asked Questions (FAQ’s)
What is balance billing?
It is a surprise bill that happens when a healthcare provider charges a patient for the amount that their insurance didn’t cover. This occurs when the provider is out-of-network and not covered fully by the patient’s insurance plan. A patient in this regard would, therefore, be “balanced billed” for the outstanding balance after insurance. For instance, if a doctor charges $500 dollars, and the insurance pays only $300, then the provider may bill the patient for the remaining $200.
What is the minimum monthly payment on medical bills?
In particular, there is no minimum amount for the monthly payment towards medical debt. It actually depends on the plan that you and your healthcare provider will agree upon. Before making a deal on a payment plan, examine your bill to ensure that you will pay only what your insurance didn’t cover. This way, you may be able to note the mistakes and also avoid overpaying.
What is the California statute of limitations on medical debt?
The medical bill statute of limitations California is four years, which means that a creditor has four years from the date of the last payment to or when the debt became due to file a lawsuit to collect his unpaid medical bills. You must know the statute of limitations California medical debt in detail so you can act within a reasonable time.
