The Association of American Physicians and Surgeons filed suit to block the implementation of legislation designed to prohibit balance billing practices in California.
The physician advocacy group filed a complaint against Gov. Jerry Brown (D-Calif.) and Shelley Rouillard, director of the California Department of Managed Health Care, in the U.S. District Court for the Eastern District of California Oct. 13. The suit alleges bill AB 72 violates federal and state constitutions.
Specifically, the suit claims the legislation denies state physicians due process as well as just compensation for their labor. AAPS requested the court issue an injunction against the legislation.
Bill AB 72, signed into law by Gov. Brown on Sept. 26, aims to protect patients who inadvertently receive out-of-network care from receiving costly, unanticipated medical bills not covered by insurance. The bill requires insurers to reimburse out-of-network physicians at 125 percent of the Medicare rate, or at the insurers' average contracted rate. Physicians are prohibited from billing patients for any outstanding balance.
"This bill basically empowers private insurance companies to set prices for physicians and other caregivers who are not even in their network," Andrew Schlafly, general counsel for AAPS, said in a statement. "It basically gives the insurance companies the power of the government."
Bill AB 72 takes effect July 2017.