A surprise medical bill is an unexpected charge a patient receives when they are unknowingly treated by an out-of-network provider. This often happens when a patient visits a hospital or clinic that is in their insurance network, but one of the doctors who treats them is not in their insurance network. The bill that a patient receives in this condition is a surprise bill but the condition is he or she must be treated without consent. If a patient gives content for treatment by out-of-the -network doctors, it won’t come under surprise billing.
Formally, this type of billing is called balance billing and is common in emergency situations. Specialists or surgical assistants who might not be part of a patient’s insurance network but are part of a facility usually have higher rates as compared to usual in-network rates. As a result of this treatment, patient ends up with a bill they never expected
These surprise bills were putting heavy financial pressure on Californians. To address this problem, the Consolidated Appropriations Act of 2021 introduced strong protections through the No Surprises Act, which works alongside other medical billing laws of California to stop these unexpected charges.
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Your Basic Health Insurance Rights in California
In California, you are entitles to all basic health insurance rights like transparent and honest billing, charged only the agreed in-network rates, to get timely responses from your insurer, and to appeal if your claim is unfairly denied. Let’s discuss all these rights in detail!
Right to Fair and Clear Medical Bills
California law requires hospitals and doctors to give you bills that are simple, honest, and easy to read. Your bill must clearly show what services you received, what your insurance paid, and the exact amount you owe. Providers cannot add hidden charges or confusing fees. These rules exist under California’s Health and Safety Code and the federal No Surprises Act to make sure you always understand what you’re paying for.
Right to Be Charged the Same Rate Your Insurer Negotiated
Under California’s AB 72, if you visit an in-network hospital, you must be billed at in-network prices even if an out-of-network doctor treated you without your permission. This law prevents doctors from charging you higher “out-of-network” rates for care you did not choose. Simply, you only pay the price your insurance company agreed to, not the higher one the provider prefers.
Right to a Timely Response From Your Health Insurer
California law requires insurance companies to process your claims within specific time limits. Most claims must be paid or denied within 30 to 45 days, and urgent cases must be handled within 72 hours. This prevents insurers from delaying payments or keeping you waiting for answers. You have the right to a fast and clear response about your coverage.
Right to Appeal Denied Claims
If your insurer refuses to pay for treatment, you have the legal right to challenge that decision. You can request an internal review, where your insurance company looks at the claim again. You can go for external review, where an independent medical expert makes the final decision. This is supported by federal and state laws, including the Affordable Care Act and California’s DMHC rules.
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Medical Billing Laws in California
Main medical billing law in California include Assembly billing 72 law and No Surprises Act. These laws protect people of California against dishonest and surprise medical bills. Lets discuss them in detail!
Assembly Billing 72 or AB 72 (Balance Billing Protection)
AB 72 is California’s law against balance billing. It states that if you choose an in-network hospital or facility for your treatment, you must pay in-network prices regardless of who treated you. Before this law, Californians were forced to pay high surprise bills because they visited an in-network hospital, but a specialist doctor or physician who is not an in-network doctor and has high fees treated them unknowingly. AB 72 requires those out-of-network providers to accept the standard in-network rate.
No Surprises Act
The law also makes sure providers give you a clear cost estimate before treatment (for planned care) and helps resolve billing disputes fairly. It is a Federal Government’s Law that is applicable federally in California and works along with AB 72 to protect consumers against surprise billing.
The No Surprises Act protects patients from unexpected medical bills when they get treated from out-of-network doctors or hospitals especially in emergencies.
After implementation of this law, if you go to an in-network hospital in case of an emergency and an out-of-network doctor treats you because of constraints like unavailability of specialist in-network doctor, you only have to pay your normal in-network costs. The doctor and the insurance company must work out the rest between themselves.
The law also makes sure providers give you a clear cost estimate before treatment (for planned care) and helps resolve billing disputes fairly.
Timely Payment and Billing Rules
California’s Health and Safety Code and Insurance Code require hospitals and doctors to send your claim to the insurer on time, and your insurer must respond quickly. Timely payment and billing rules states that:
- Claims must be filed within 30 days of the service date.
- If a claim is denied, the medical practice has 90 days to appeal the decision.
- If a claim remains unpaid after 45 days, the patient can file a complaint with the Department of Managed Health Care.
Coding Medical Billing Laws in California
Doctors and hospitals use Medical coding to turn your medical visit into a standardized set of codes to bill your insurance company. These codes describe your diagnosis (what was wrong) and your treatment or service (what was done).
California follows strict rules to ensure the process stays honest and transparent. Providers must use recognized systems like ICD and CPT codes.
ICD codes are used to describe what health problem or illness a patient has and why the patient visited the doctor. These codes are used in every medical record and bill. For example, the ICD code for flu is J10.1 and broken arm is S42.001A
CPT codes describe the service, test, or procedure you received as treatment. These codes are created by the American Medical Association (AMA) and are used all over the United States. For example, a code for regular check-up is CPT 99213. These codes ensure your bills match the care you received.
Coding can sometimes be done wrongly in the form of upcode or incorrect codes. This can lead to problems for both consumers and providers.
In upcoding, providers may charge for a more expensive service than the one provided. This can count as fraud under California’s medical billing laws and create problems for providers.
Incorrect or missing codes can delay payments or even denial of medical claims by insurance companies. This can cause headaches for consumers. Correct coding keeps the healthcare system fair and clear for everyone. It turns complicated billing into a transparent process.
Your Rights When Insurance Denies a Claim
Your health insurance company may sometimes refuse to pay for a treatment, test or a service. In California, law gives you clear rights to question the denial decision and ask for a fair review.
If a claim is denied, you can first file an internal appeal and ask your insurance company to review their decision. For in-depth review, you can send extra documents like doctor’s notes or medical reports to show why the treatment was necessary. The insurance company must review your case fairly within a specific time 30 days for regular cases.
If your insurer still denies the claim, you can move to an external review. In this case, an independent medical expert will analyze your case. By law, this review is free of cost. If the expert decides that the treatment should be covered, your insurer must pay it.
According to Californian law insurers cannot deny claims without a reason. They must clearly explain why the claim was denied and must state which rule or policy they used for that decision. This explanation helps you understand the issue and take the right next step.
Watch this video to learn more about surprise medical billing!
FAQs About Medical Billing Laws in California
1. Can hospitals balance the bill?
No, hospitals in California cannot balance bills. If you go to an in-network facility they cannot charge you extra money because the doctors who treated you were out-of-network. In this situation, laws like AB 72 and the No Surprises Act apply which state that you only pay your normal in-network costs.
2. What if I don’t have insurance?
If you do not have insurance, hospitals must bill you fairly and clearly. California law requires hospitals to offer financial assistance or payment plans based on your income. You can ask the hospital’s billing office about charity care and discounted rates, too, before paying.
3. How do I dispute a wrong bill?
If you think your bill is wrong, call your insurance company or the provider’s billing office. Ask for an explanation in writing. If the problem is not fixed, you can file a formal complaint with the California Department of Managed Health Care (DMHC) or the California Department of Insurance (CDI). These agencies help patients resolve billing issues for free.
4. Are telehealth visits covered under these laws?
If your telehealth provider is in your insurance network, the same billing protections apply. California law treats telehealth as a normal medical service. Because of this, you are protected from unfair and unexpected charges.
