PRESIDENT’S REPORT: CMA’s Unseen Legislative Battles: AB 533 vs. AB 72

Peter Bretan, MD, FACS

One of the great difficulties in maintaining membership for the Marin Medical Society (MMS) and the California Medical Association (CMA) is trying to be all things to all members. This can be extremely difficult since we have such a diverse membership and modes of practice. One of the toughest challenges we face is to show members the work we do all-but-invisibly on a daily basis.

Our Small and Solo Group Practice Forum (SSGPF) used to represent the dominant mode of practice, making up over 75% of our membership for more than introduced because out-of-network billing prompted many patients to complain to the Legislature. These bills are a byproduct of insurance companies’ narrow and inadequate physician networks, which almost guarantee that outof-network physicians are often dragged in to care for patients insured by these companies. These patients get procedures from anesthesiologists, surgeons, radiologists and other non-contracted, hospitalbased doctors who are thus “out of network” when they are on call at an in-network hospital. The patient then gets slammed with a “surprise billing.” Obviously this is the fault 20 years. Economic forces and an everevolving medical practice landscape have changed that significantly, so that many solo practices have joined multi-specialty groups or larger practices. The SSGPF now accounts for only about a third of our membership. Unfortunately, it is the SSGPF that is disproportionately hurt by much recent legislation. It is the goal of the Marin Medical Society and the California Medical Association to battle and overcome some of these bills, which would not merely hurt solo/small practices but threaten their very survival.

Many of the CMA’s struggles are invisible to the membership, and sometimes certain bills’ passage appears to occur because of neglect by the CMA. Nothing could be further from the truth. Often, when a controversial bill passes, it is the lesser of two evils. This is what happened in the recent passage of AB 72 over its more sinister twin, AB 533. Both bills were introduced by Assemblyman Robert Bonta of Alameda, and both were labeled as “Surprise Billing” legislation. They were introduced because out-of-network billing prompted many patients to complain to the Legislature.

These bills are a byproduct of insurance companies’ narrow and inadequate physician networks, which almost guarantee that outof-network physicians are often dragged in to care for patients insured by these companies. These patients get procedures from anesthesiologists, surgeons, radiologists and other non-contracted, hospitalbased doctors who are thus “out of network” when they are on call at an in-network hospital. The patient then gets slammed with a “surprise billing.” Obviously this is the fault not of the provider, but of an inadequate insurer network. Unfortunately, insurers have been using this loophole to avoid paying providers adequately. Also unfortunately, AB 72 eliminates “surprise billing” by transferring this cost to the non-contracted, out-of-network providers. Many solo practitioners perceive this as a slippery slope, a ramp-up to unregulated capitated care as a consequence of insurers’ narrow networks, which angers many struggling providers. The most damaging accusation is that CMA did not fight to prevent this. On the contrary, CMA did everything possible. Let me outline here just what it did.

AB 533 was the first of these bills to be introduced. It would have required non-contracted physicians to sign a written consent form 72 hours before providing a service. It also called for reimbursement at 125% of the Medicare rate. CMA consistently opposed AB 533 and proposed a solution similar to legislation passed in New York using the interim payment metric of the 80th percentile of the Fair Health database. However, the Legislature didn’t agree. Supporters of AB 533 included all major labor unions, health plans, consumer groups and the California Chamber of Commerce. CMA was able to defeat AB 533 by keeping it short of the 41 votes necessary for passage at the end of 2015. Unfortunately, the bill could still be brought up for reconsideration at any time after that.

AB 72 was offered as an alternative to 533. When it was being vetted by CMA, it received input from a broad representation of physicians from every mode of practice. CMA’s various forums had spokespeople at each CMA Board of Trustees meeting. By ensuring stakeholder participation in the AB 72 development process, CMA was able to secure improvements in AB 72 that made it better than AB 533. CMA was able to get the Legislature’s support for these changes in the bill by switching its position from “opposed” to “neutral.” This was CMA’s only option—to seek the support of allies in pushing for AB 72 over AB 533. Despite the ongoing effort to make AB 72 more palatable than AB 533, our SSGPF asked CMA to send a letter to the governor urging him to veto AB 72 just at the time that CMA was in the midst of actively working to amend— to improve—AB 72 so as to destroy AB 533. Obviously, sending such a letter would have killed CMA’s credibility in the effort to make AB 72 as palatable as possible—and perhaps the credibility of future CMA efforts as well.

What some physicians fail to realize is that there is truly no support in the Legislature for holding patients responsible for services they never agreed to. CMA’s stance has been that the insurers are responsible for these costs, since they are the direct result of the insurers’ narrow networks, which are in turn the result of inadequate reimbursements to providers. Nevertheless, that is irrelevant to the negotiation process in the Legislature, especially since we needed the insurers’ support for AB 72 over AB 533.

The CMA Board of Trustees directed the CMA Government Relations staff to negotiate the best deal possible for AB 72 as a replacement for the more damaging AB 533. The CMA leadership understood that this was the right thing to do despite the protest from unengaged members of the SSGPF.

In its final form, AB 72 has been sent to the governor for signing. It includes these provisions:

• Health plans and insurers must pay physicians the greater of the average contracted rate or 125% of the Medicare reimbursement for that service.
• A non-contracting physician must get written consent with an estimate of the patient’s total out-of-pocket cost for the use of out-of-network benefits more than 24 hours ahead of the scheduled service.
• The continuity-of-care provision in existing law will remain in effect. Thus in certain instances a patient may still have a right to get covered services from a non-contracted physician.
• Most importantly, the bill now allows state health insurance regulators to better determine whether plans’ and insurers’ networks are adequate, and to take action if they are not.

The battles fought by MMS and CMA at the state Legislature and by AMA in Congress are an ongoing saga. We may not always get what we want, but we fight for what we need. I hope we can all understand that CMA/MMS look at the whole practice of medicine and the effect on our patients. I hope you stay involved and always question what insurers and government are going to do to your practice, but understand that the negotiating effort requires credibility, patience and attention to detail. Rest assured that we are doing everything in our power for your practices, and that your membership enables us to fight day in and day out.

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Dr. Bretan, a urologist and transplant surgeon in Marin, Sonoma and Mendocino counties, is president of MMS, a member of the CMA and AMA delegations, and a former CMA trustee.
Email: bretanp@msn.com