California passes bill restricting emergency room charges for out-of-network patients

California legislators have passed Senate bill 359, a bill that will restrict emergency department (ED) billing to out-of-network payers.

State law already requires hospital emergency rooms to render care to anyone who needs it. Hospitals also must adjust their charges for lower-income patients to a total amount it could “reasonably expect” as reimbursement from a government program. But for patients who carry insurance but visit an ED that is out of their payer's network, EDs often charged sky-high rates, the bill explains.

The new California bill will place limits on what most hospital emergency departments can charge out-of-network payers. “The hospital’s total expected payment would be 60% of the payer’s average in-network payments, as defined, but shall not be less than 150% of the payment the hospital reasonably could expect to would from Medicare for similar emergency services and care,” the bill reads.

The bill applies to all hospitals that have an out-of-network ED utilization rate of 50 percent or greater. It refers only to charges incurred as emergency services, and it doesn’t include patient situations where workers’ compensation, Medicare, Medi-Cal and other government benefits programs are deemed as payers.

The bill is currently awaiting the governor’s signature.

Nationwide, seniors are second only to infants in ED use. The high frequency has cause many states, including California, to create emergency departments designed especially for those 50 and older.

Topics: Accountable Care Organizations (ACOs) , Executive Leadership , Medicare/Medicaid , Regulatory Compliance