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In California, a ‘Surprise’ Billing Law Is Protecting Patients and Angering Doctors

There is less data about what doctors are being paid under the new system. The letter from the California Medical Association provides examples of insurers that are demanding rate cuts as high as 40 percent. Blue Shield of California, one of the state’s largest insurers, told Senate staff in a letter that its payment rates had increased since the law went into effect, even as the number of doctors in their network increased. But its experience may not be universal. The Congressional Budget Office estimates that the average payment to affected doctors could end up falling by between 15 percent and 20 percent if the bill before the Senate becomes law.

A recent survey from the Kaiser Family Foundation found that 78 percent of adults favor a solution to surprise medical bills. When told this could reduce doctors’ pay, 57 percent still support the idea.

Michael Champeau, the president of the Associated Anesthesiologists Medical Group in Palo Alto, said he was the first physician to try out California’s appeals process. After the law passed, it prompted his practice to try to sign contracts with all the nearby insurance companies, most of which obliged, offering similar prices. Blue Shield, he said, was the exception. “We made several calls to their contracting officer,” he said. “No one ever returned our phone calls. They just refused to acknowledge we existed.”

Matthew Yi, a spokesman for Blue Shield, said the company did respond to Dr. Champeau’s company in the summer of 2016, with a request for materials to begin a contract negotiation. He said the practice did not reply for several months, and then only to update its address.

After his practice treated Blue Shield patients at Stanford Hospital, Dr. Champeau received an automatic payment 35 percent lower than what the other insurers pay him, he said. After a long process, he lost the appeal. “Why on earth would they want to contract with me for the average going rate in my area when they knew they were going to be able to pay me 35 percent less?” he said.

Dr. Champeau, who is now the treasurer for the American Society of Anesthesiologists, has been to Washington and discussed his experience with Anna Eshoo, the chairwoman of the Energy and Commerce Health Subcommittee, and with Speaker Nancy Pelosi.

Ms. Duffy, the RAND researcher, said this was a common refrain from the doctors she interviewed for her study, who lamented that the new law meant they had less leverage in contract negotiations.

“They said the tenor of the conversation had changed,” she said. “It had been made clear to them they were in a weak position. And that was very upsetting to them.”

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