California’s Surprising New “No Surprise” Health Care Billing Law

King & Spalding

As it “rolls out” over time, California’s new “No Surprise” billing law will prohibit certain physicians and other clinicians from billing and collecting more than applicable deductibles and co-paysfrom their patients. Contrary to what many law firms’ bulletins and articles say about the new law, it does not apply to all providers or to emergency services,and is not really a “balance billing” law. The law is addressed to individual health professionals (“IHPs”) who are not contracted with their patients’ health plans or insurers but who practice at hospitals and other facilities that are contracted, i.e., “in-network.”

Despite its nickname, the law includes many surprises: it is the first law to impose pricing terms on private health care providers, dictating that IHPs who are not contracted with their patients’ health care service plans and insurers must accept discounted rates as payment in full. These rates will be either based on contracts that the payers negotiated at least two years ago with unknown and unrelated third parties or, in the unlikely event it is higher, 125% of Medicare fee-for-service rates. In essence, the law permits health plans and insurers to pay discounted rates to IHPs without a bargained-for exchange of benefits.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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