Introduction
When a medical service provider attends to a patient without getting a contract with his insurance plan, his services are called out-of-network. The charges for these services are called OON billing and the situation can occur due to several reasons. For example, when a patient visits the hospital in an emergency, service providers attend to him without his network confirmation. OON services can cause surprise billing and higher-cost treatments.
The charges on the patient for OON services are called surprise billing. The term surprise is used because the patient receives an unexpected bill for using OON providers. Surprise billing occurs when a patient receives emergency care from an in-network facility but is treated by OON providers. These bills charge high rates because insurance rates do not bind OON services. California introduced several laws to save patients from this financial stress.
California’s Out-of-Network (OON) Law (AB 72)
- This OON law ensures that patients only share the cost of in-network services. OON providers cannot serve the patient without his consent, and in emergent situations, the in-network facilities use their services to share the cost. This law took effect on July 1, 2017, and it shares the balance billing burden on patients.
- This legislation compensates non-participating providers through commercial payors such as DHCS and CDI. According to state law, the compensation rate is the average of contracted insurance for the same service and region. The rate is also decided as 125% of in-network Medicare prices.
- This plan benefits patients and service providers. Patients avoid surprise and balance billing hassles, and service providers receive a fair amount of compensation. When a transparent decision is made on balance billing, the law enhances patients’ trust in the state’s healthcare arrangements.
The Federal No Surprises Act (NSA)
This federal act saves patients from surprise billing for non-emergency and emergency conditions. This law takes effect on January 1, 2022, and is equally beneficial in all US states, including California. The implementation of this legislative step applies to several health insurance plans, including ERISA.
Applicability to California
The application of federal NSA in California provides additional protection to existing state laws. This act added self-funded and ERISA insurance plans that were previously out of scope in the state’s legislation.
Coverage for Emergent and Non-Emergent Care
According to NSA, OON providers cannot charge for their emergency services, and patients will share the cost of in-network services. The patient is free from balance billing in emergency treatment, regardless of whether the services are in-network or OON.
Self-Funded/ERISA Insurance Plans
The act provided the same protection to self-funded insurance and state-regulated plans, which provides extra protection for healthcare facilities. Self-funded and ERISA insurance plans are handled at the federal level, so patients receive extra protection by adding these plans to the federal NSA.
Consumer Protections Under California Law
The state introduced several guidelines for protecting consumers from unexpected payments for medical services. The primary focus of these practices is preventing surprise billing.
Balance Billing Prohibitions
According to this act the service providers cannot impose charges of difference between insurance coverage and OON expenses. The payment disputes should be settled between insurers and service providers. By these instructions, the patient receives quality care without financial burden.
Emergency Services Coverage
The medical emergency does not allow enough time to choose the network status according to the patient’s insurance. Hence, to provide timely medical assistance for patients, the state allows insurers to cover emergencies without the concern of in-network service or the OON.
Patient Rights and Responsibilities
Patients must understand their rights and responsibilities because a deep knowledge guides them to navigate the medical complexities efficiently. According to California rules, patients have the right to make consent decisions about network selection and can access their medical records.
With certain rights, it’s their responsibility to understand the insurance structure. They should follow the instructions of professionals during treatment. They should timely apply for the IDR process in case of surprise billing and ensure submission of all relevant documents to resolve payment disputes.
The Independent Dispute Resolution (IDR) Process
Mediation vs. Arbitration
Both processes are types of IDR and are used to resolve the differences between insurers and service providers. These types save the cost and time of litigation steps and allow both parties to resolve the issues confidentially. In mediation, the third party creates a positive environment for both parties to negotiate and solve the issue with common interests. Conversely, the arbitration process allows the third party to impose a final decision after collecting evidence and information from both parties.
Role in Resolving Billing Disputes
Arbitration and Mediation help compensate service providers for their OON services. Both processes work like a defensive shield for patients by preventing their involvement in billing disputes. The IDR process also resolves issues without legal involvement.
Recent Developments and Statistics
California is continuously enhancing the IDR process to resolve payment issues fairly and efficiently. A recent development of expanding the IDR to attend OON services in emergencies increased patient protection. The state is going to set criteria for selecting mediator parties. The selection based on higher qualifications and experience will increase the transparency of decisions.
Health Care Providers’ Considerations
The state introduced specific conditions to prevent service providers’ payment loss. These guidelines help compensate for non-covered services and ensure a smooth treatment process for patients.
Billing for Non-Covered Services
In emergency treatment, service providers cannot receive the charges for OON services. However, for non-emergency treatment, providers are responsible for informing the patients regarding their network status in advance. They should also get patients’ consent signatures on hospital documents to prevent any disputed situation.
Working at In-Network Facilities as Out-of-Network Providers
OON providers working at in-network facilities can create a confusing situation for patients. They should clearly inform patients about their network status and directly negotiate with insurers for cost coverage. Such providers can also initiate the IDR process to resolve their payment disputes.
Requesting Arbitration
Providers should have comprehensive knowledge of the state’s laws and requirements to start the arbitration. They should also have all relevant documents before applying for arbitration. Preparation guides to timely follow-ups for requests.
Health Plan Provider Directory Requirements
Californian health directories must comply with state requirements. This alignment helps to spread up-to-date information to patients so that they can make informed decisions.
Listing by Specialty
The service providers on directories should be available on their specialty basis. The developers can classify these specialties into subcategories to provide more accuracy in search results.
Availability & Updates
These directories should be mobile-friendly and available f4/7 without any login requirements. For patients, The developers should create multiple formats of one directory, such as online, print form, or downloadable in PDF format. The planners should regularly update the directory to provide accurate information about availability.
Final Analysis
California developed favorable rules and regulations for patient protection. The state’s laws benefit both service providers and patients. If the acts save patients from surprise billings, the providers also receive compensation from state payers. Authorities are continuously striving to enhance California’s healthcare landscape.
Out of Network billing service providers like Wise Medical Billing keep itself up to date with ever evolving landscape of healthcare regulations and is continuously helping Out of network providers getting a fair reimbursement for the valued services they provide to their patients.
Reach out to us to know more about Wise Medical Billing Out of network complete revenue cycle management services Today.
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