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New Study: California’s Surprise Medical Bill Legislation Protects Patients Without Threatening Provider Networks

Press Release

Published Aug 22, 2019 • by AHIP

State’s approach can be a model for federal legislation

WASHINGTON, D.C. – (August 22, 2019) – A new comprehensive study published in, the website of The American Journal of Managed Care by America’s Health Insurance Plans (AHIP) shows that since California passed its legislation to end surprise medical bills in 2016 (AB 72), the number of in-network doctors has increased by 16%.

“Too many hardworking families are hit with a surprise medical bill after they get the care they need,” said Jeanette Thornton, senior vice president for Product, Employer & Commercial Policy for AHIP. “This study shows that we can protect patients, improve affordability, and ensure strong provider networks with the right legislation to stop surprise medical bills.”

About the Study

Surprise medical bills occur when patients receive care outside of their insurance network, at no fault of their own, and are billed directly by specialty doctors for whatever amount they determine they are owed beyond what a health plan pays. Legislation like AB 72 in California corrects this market failure by setting a benchmark, locally negotiated market reimbursement rate for out-of-network care. In California, doctors are paid either the physician’s average contracted rate (ACR) or 125% of the Medicare reimbursement rate, and patients do not receive an additional bill above and beyond that amount.

The study is based on new research examining 11 health plans, representing 96% of covered lives in the fully insured commercial market in California. The survey excluded health plans that had fewer than 10,000 enrollees, as well as Kaiser Permanente (KP). While KP is the largest health plan in California, serving more than half of the commercial fully insured market in the state, it was excluded because Kaiser Foundation Health Plan has exclusive contracts with the two Permanente Medical Groups which provide most care through their own physicians.

The data show that following adoption of California’s surprise billing legislation, the number of physicians in provider networks was 116% of the level prior to the law going into effect:

Average Change by Health Plan in the Number of In-network Providers in California between July 2017 and July 2019.

Physician Type In-network Providers, 2017-2019, %
Total Physicians 116%
General Surgery 110%
Emergency Medicine 110%
Anesthesiology 118%
Diagnostic Radiology 126%
Pathology 101%

The results of this study show that lawmakers at the federal level can use California’s law as a roadmap to address surprise medical billing for every American.

About AHIP

America’s Health Insurance Plans (AHIP) is the national trade association representing the health insurance community. AHIP’s members provide health and supplemental benefits to millions of Americans through employer-provided coverage, the individual insurance market, and public programs such as Medicare and Medicaid. AHIP advocates for solutions that expand access to affordable health care coverage to all Americans through a competitive marketplace that fosters choice, quality, and innovation. Visit for more information.