RACHEL MARTIN, HOST:
Maybe you know this feeling - you get a medical procedure done and you think it's covered by insurance. Then you get a bill in the mail, and you find out you are on the hook for a whole lot of money. State legislators in California are trying to do something about these so-called surprise medical bills, and they've pushed forward a bill that's on its way to Governor Jerry Brown's desk. Stephanie O'Neill from member station KPCC reports.
STEPHANIE O'NEILL, BYLINE: Last summer, 57-year-old Cassie Ray had a mastectomy. And a few weeks later, she needed a minor follow-up procedure at an outpatient clinic.
CASSIE RAY: I looked up on my insurer's network and made sure that the outpatient facility that I was being referred to was in my network. And I knew my doctor was already in my network and was set to go.
O'NEILL: But a month later, the resident of Fairfield, east of San Francisco, received an unwelcome surprise - a nearly $600 bill for an out-of-network anesthesiologist.
RAY: I called the facility back. And at first, I felt like this has to be a mistake. They'll fix it.
O'NEILL: But the clinic instead told her she'd have to negotiate the bill directly with the doctor. Ray's experience illustrates the problem of surprise, or balance, medical billing. That can happen when a patient goes to an in-network facility and winds up getting care from an out-of-network provider. Betsy Imholz of Consumers Union says her organization has done research that shows it's a common problem that can result in costly medical bills.
BETSY IMHOLZ: They can range in price from a hundred dollars to many thousands, so it's a big financial burden on consumers.
O'NEILL: And a stressful one. In Cassie Ray's case, it took about seven months for her insurance to pay the bill so she could clean up her credit.
RAY: I was so frustrated. I was just in tears as I was dealing with it. And my immediate response was there does need to be a law to fix this. This is so wrong.
O'NEILL: The legislation would limit a patient's financial obligation to no more than what they would've owed if the provider had been in-network. Dr. Karen Sibert, president-elect of the California Society of Anesthesiologists, says that's a good thing.
KAREN SIBERT: Patients should never have surprise bills.
O'NEILL: But her organization, along with other specialty medical groups, opposes the measure. At issue, Sibert says, is its formula for paying doctors who fill the gap when insurance companies fail to have enough specialists in their networks.
SIBERT: It's a problem because it removes any incentive for insurance companies to reach fair contracts with physicians.
O'NEILL: And without that incentive, Sibert says, insurance companies will continue to have provider networks that are too narrow.
SIBERT: Right now, there's nothing to stop an insurance company from saying OK, your hospital is in-network, but not telling the patient that they don't have a contract with an anesthesiologist there.
O'NEILL: Or other doctors. The powerful California Medical Association agrees, but it's shifted its position from opposed to neutral. Janus Norman is the group's vice president of governmental affairs. He says the measure now before the governor has been rewritten to offer more oversight and to give these out-of-network doctors the chance to appeal payments through a binding resolution process.
JANUS NORMAN: Prior versions didn't really have the details of how that would really operate.
O'NEILL: Betsy Imholz of Consumers Union says the medical association's neutrality made the difference this year. And she predicts if Governor Jerry Brown signs the legislation, other states will follow suit. For NPR News, I'm Stephanie O'Neill.
MARTIN: This story is part of a reporting partnership with NPR, KPCC and Kaiser Health News.
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