California’s ‘surprise’ medical bill law targeted by lawsuit

A new California law on out-of-network billing may be blocked by a lawsuit from a controversial medical association.

The Association of American Physicians and Surgeons (AAPS) filed the suit in the U.S. District Court in Sacramento, California, according to the San Francisco Chronicle. The law sets reimbursement requirements for insurers for paying out-of-network ancillary providers that patients didn’t know weren’t covered by their plans, which AASP argues is too favorable to insurers.

“This bill basically empowers private insurance companies to set prices for physicians and other caregivers who are not even in their network,” said Andrew Schlafly, general counsel for the group, to the Chronicle. “It basically gives the insurance companies the power of government.”

The lawsuit fits with AAPS’s past legal actions, as its founding mission statement in 1943 pledged to “fight socialized medicine.” Its more recent history includes lawsuits against the Clinton healthcare plan in 1993 and arguing HIPAA was unconstitutional in a 2001 suit. Along with its legal advocacy, the group remains controversial thanks to material in its medical journal, where articles have promoted discredited claims like HIV doesn’t cause AIDS or abortions can be linked to breast cancer. During the presidential campaign, it went against the practices of other medical associations by openly questioning Hillary Clinton’s health.

Other physicians have argued the reimbursement in the law would be inadequate. The out-of-network physicians or specialists would be paid t at 125 percent of the Medicare rate or at the insurer’s average contracted rate, whichever is greater. Opponents of the law have argued this will lead to further narrowing of networks by insurers and decreased access to care.

The sponsor of the legislation, Democratic California Assemblyman Rob Bonta, said to the Chronicle the law has physician protections "by allowing them to seek any legal remedy they see fit if they are dissatisfied with their compensation.”