Payors report system changes to comply with AB 72

March 30, 2018
Area(s) of Interest: AB 72 Payor Issues and Reimbursement Out of Network Billing 

When California’s new out-of-network billing and payment law (AB 72) took effect on July 1, 2017, the California Medical Association (CMA) began receiving calls from physician offices concerned that Anthem Blue Cross and Blue Shield of California were not correctly paying claims. In both cases the incorrect payments were linked to manual processing of AB 72 claims.


CMA worked with Blue Shield to ensure affected claims through October of 2017 were automatically reprocessed. Blue Shield also committed to conducting weekly audits to catch any additional claims that were processed erroneously. While the payor continues to process claims manually, Blue Shield reports it is working on an automated system fix expected to be implemented by mid-year.



Anthem has also reported to the Department of Managed Health Care that it implemented a system fix to allow claims subject to AB 72 to be processed automatically rather than manually.



AB 72 requires fully insured commercial plans and insurers to make “interim payments” to non-contracted physicians for covered, non-emergent services performed at in-network health facilities, and places limitations on the ability of physicians in such circumstances to collect their full billed charges.



The interim rate is defined as the greater of the average contracted rate or 125 percent of the amount that Medicare reimburses on a fee-for-service basis for the same or similar services in the geographic region in which the services were rendered.



The new law also requires payors to honor assignment of benefits and issue the interim payment directly to physicians.



If your practice has received incorrect payments or denied claims related to the new law, CMA wants to hear from you. Practices can contact CMA’s AB 72 advocate Juli Reavis at (888) 401-5911 or jreavis@cmadocs.org.



To learn more about this law, find out if payors are reimbursing you correctly and learn how to dispute the interim rate, visit CMA’s AB 72 Resource Center.



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