By: Andrew Silverio, Esq. In March, the California Department of Managed Health Care (“DMHC”) issued an “All Plan Letter” (available HERE) describing the relationship between the No Surprises Act (“NSA”) and California’s existing law establishing balance billing protections in various situations. Followers of our ever-expanding library of content on the NSA will remember that the NSA defers to “specified state law” which meets certain criteria. Most importantly, this means a state law that provides a method for determining the amount payable under a health plan or insurance policy for a nonparticipating provider or emergency facility. This letter confirms that California’s existing balance billing laws, enacted by AB 72, are indeed a specified state law under the NSA, operating in place of the NSA’s provisions when applicable. The law meets the NSA’s criteria by requiring that payers reimburse the greater of the average contracted rate (similar to the NSA’s all-important Qualified Payment Amount which is usually the median contracted rate) or 125% of the applicable Medicare reimbursement rate and impose no greater cost-sharing than applicable for in-network providers.
The California law’s applicability is not quite as broad as the NSA’s, however – it sets these guidelines for non-network emergency services and non-network services provided at in-network facilities, but does not apply to air ambulance claims as the NSA does. Thus, the NSA’s requirements and protections will apply for air ambulance claims in California. Additionally, it’s important to remember that self-funded ERISA plans still enjoy broad preemption of state law. In situations where the California law cannot apply to a given dispute because of the plan’s status, the NSA’s requirements would remain in force.
Contact us to learn more about balanced billing and what that means for you!