CALIFORNIA

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The California State SBL took effect July 1, 2017. Like other State SBL’s, the law protects patients from OON balance bills where the patient did not make a conscious decision to be treated by an OON provider. It is comprehensive in the sense that it not only protects patients but establishes a dispute resolution process as well. Cal. Health and Safety Code § 1371.9 (2016). The reimbursement provisions of the California State SBL call for reimbursement for inadvertent OON services at the greater of 125% of Medicare or the average INN rate. Regarding emergency OON services, California case law has established that the appropriate standard of reimbursement is the usual and customary rate for the service or UCR. That standard has now been codified for ER OON treatment.

Regarding bifurcation, California does have an arbitration process at the state level. As per CMS,

California does not have an applicable All-Payer Model Agreement that would determine the out-of-network rate. Based on the survey response and CMS communications with California Department of Insurance, Department of Managed Health Care, and Department of Health staff, CMS understands that Cal. Health and Safety Code §§ 1371.30, 1371.31, and 1371.9, and §§ 10112.8, 10112.81 and 10112.82(a) of the Insurance Code are specified state laws that will apply for purposes of determining the [OON] rate with respect to non-emergency services furnished to individuals in health care service plans (and their delegated entities) and certain health insurance plans in California by noncontracting individual health professionals at contracting health facilities.4 The [Federal IDR] process under section 2799A-1(c) of the PHS Act and 45 CFR 149.510 will apply for purposes of determining the [OON] rate with respect to any items and services furnished to individuals in an insured group health plan, or group or individual health insurance coverage in California by nonparticipating providers and nonparticipating emergency facilities to which Cal. Health and Safety Code §§ 1371.30, 1371.31, and 1371.9, and §§ 10112.8, 10112.81 and 10112.82(a) of the Insurance Code do not apply. The [Federal IDR] process under section 2799A-2(b) of the PHS Act and 45 CFR 149.520 will apply for purposes of determining the [OON] rate with respect to any services furnished to individuals in an insured group health plan, or group or individual health insurance coverage in California by nonparticipating providers of air ambulance services. The California Department of Insurance and the Department of Managed Health Care will enforce the outcome of the [Federal IDR] process for such cases in California through a collaborative enforcement agreement.

CMS Letter to the Governor of California dated December 22, 2021.