Stakeholder Perspectives and Early Responses to California’s Surprise Medical Billing Law (AB 72)
*Names in bold indicate Presenter
I conducted a descriptive single-case study to capture the initial perspectives and early policy responses of physicians, insurers and health plans, patient advocates, and hospitals. Semi-structured interviews were conducted with 28 stakeholders in January through March 2018. Interviewees included representatives of advocacy organizations, representatives of state-level professional associations, legislators, regulators, and current executives of physician practice groups, hospitals, and health benefits companies. Relevant documents were also reviewed, including bill text, analysis, rulemaking guidance, and legislative advocacy documents. Interview transcripts and documents were analyzed using process-tracing, pattern-matching, and explanation-building techniques with computer-based qualitative analysis software.
Stakeholders reported that AB 72 is effectively protecting patients from receiving surprise medical bills. However, provisions of AB 72 that limit the levels of payments to out-of-network hospital-based physicians have decreased the leverage of these physicians in their contract negotiations with payers. Physician stakeholders and market observers report that AB 72 has resulted in lower contracted payment rates and failures to contract, particularly in the anesthesiology, radiology, and orthopedics specialties. With less negotiating leverage, some physician groups have accelerated steps toward consolidation. Stakeholders reported concerns about the long-term stability of the hospital-based specialist workforce and possible decreases in access to care.
Although AB 72 affects a narrow band of hospital-based specialists, these impacted physicians provide critical services for procedural and diagnostic clinical care. Therefore, it is in the interests of lawmakers and regulators to foster a sustainable payment rate to maintain stability in the hospital-based physician workforce and access to these services. As implementation of AB 72 continues in the coming months and years, it will be critical to monitor its effects and take steps to mitigate negative consequences. For example, regulators could adjust the payment standard or network adequacy requirements to encourage contracting between payers and physicians.