Sep 27, 2019 - Health

The effects of California's surprise medical billing law

Illustration of a red cross and a pill bottle in a pile of money

Illustration: Sarah Grillo/Axios

California's law prohibiting surprise billing has led to an increase in care delivered by in-network providers, according to a new analysis by the USC-Brookings Schaeffer on Health Policy initiative.

The big picture: The leading federal surprise billing solution is similar to the California bill in that it creates a benchmark payment rate for out-of-network care. Providers have lobbied fiercely against the approach.

  • But while provider groups have warned that such a policy would lead to doctor shortages and threaten patients' access to care, that's not borne out in the data, according to USC-Brookings.

By the numbers: There was a 17% decrease in the share of out-of-network services delivered by the affected provider specialties after the California law took effect.

  • Conversely, the share of in-network services increased from 79.1% to 82.6%.

Yes, but: What the approach likely does do is reduce providers' bargaining leverage with insurers, leading to lower overall payment rates.

  • As the NYT succinctly puts it, "Some doctors may be hurting from a pay cut, but that doesn't seem to be hurting patients."

Go deeper: We all pay for surprise emergency room bills

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