November 13, 2017
Area(s) of Interest: Payor Contracting
AB 72, California’s new out-of-network billing and payment law, 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 defined in AB 72 is the greater of the average contracted rate (including only commercial contracts) 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 California Medical Association (CMA) has published a workbook to help practices identify if payments they receive comply with AB 72's interim payment rules.
The AB 72 Payment Monitoring Workbook is available free to CMA members in the AB 72 resource center. This tool compares the payor’s allowed amount to 125 percent of Medicare, which serves as the floor for whether or not the interim payment rate was met.
Note: If claims subject to AB 72 are being paid at your full billed charge rate, it could indicate that the physician’s billed charge is less than the interim rate required under AB 72. Physician practices are encouraged to review their billed charges by CPT/HCPCS code to ensure they are not billing below the interim payment rate.
CMA’s AB 72 resource center also has a number of other resources to help physicians navigate this new system, including an FAQ, a sample appeal letter, a guide to help physicians challenge “interim payments” and a series of on-demand webinars.