SACRAMENTO – California Attorney General Rob Bonta expressed support today for the Biden Administration’s work to protect American consumers from unexpected medical bills. In a comment letter to the U.S. Department of Health and Human Services, the U.S. Department of Labor, and the U.S. Department of the Treasury (collectively, the Departments), the Attorney General applauded the federal government for the Interim Final Rule (IFR) – a regulation that will extend surprise medical bill protections to an estimated 135 million people who receive health coverage through employer self-funded plans and millions more who live in states that have no protections. In addition to offering support, Attorney General Bonta also provided suggestions for strengthening the IFR.

“No one should have to fear bankruptcy or financial ruin after receiving vital medical care during a health emergency, but we know surprise medical bills have had devastating impacts on far too many Americans,” said Attorney General Bonta. “In California, we’ve taken steps to protect our residents from the stress and financial hardship of unexpected medical bills, but states cannot do it alone. I commend the Biden Administration for taking action to close the gap and protect consumers at the federal level.”

Debt caused by the inability to pay an unexpected medical bill can result in long-term, devastating effects, including low credit scores, loss of savings, and credit card debt. It can leave individuals and families unable to afford basic necessities, and cause many to delay their education or career plans. Studies have shown that these financial challenges are worse for underserved communities, which already suffer from inequitable access to healthcare. Studies have also shown that the Covid-19 pandemic has exacerbated the problem. According to the Commonwealth Fund Health Care Coverage and COVID-19 Survey, March–June 2021, “people who lost income reported medical bill problems at the highest rates, especially those who also tested positive or became sick with COVID-19 or lost coverage.”

Last year, Congress passed the No Surprises Act to prevent patients from receiving unexpected bills from out-of-network providers in two common situations: during emergencies when patients have little say in where they will receive care, and when hospitals and other healthcare facilities offer out-of-network services without their patients’ knowledge. The IFR is the Departments’ first regulation implementing the provisions of the No Surprises Act. According to the IFR, “over 39 percent of emergency department visits to in-network hospitals resulted in an out-of-network bill” and “37 percent of inpatient admissions to in-network hospitals resulted in at least one out-of-network bill.”

California tackled the problem of surprise billing head-on in 2016 with the passage of Assembly Bill 72, which was authored by then Assemblymember Bonta. The purpose of the bill was to increase network participation and reduce the cost of care to unsuspecting consumers. The passage of AB 72 has led to a 17% decline in the share of services that specialists delivered out-of-network at hospitals and ambulatory surgical centers. However, state laws like California’s leave gaps in protection because, among other issues, they are unable to regulate federal programs or self-insured employer plans. As a result, almost six million Californians in self-funded insurance plans do not benefit from the protections of AB 72.

While the IFR addresses and closes many of the gaps in state law, others still remain. An article in Business Insider noted that urgent care clinics now handle about 89 million visits annually. Additionally, a study by Definitive Healthcare reported that the pandemic has driven a 6000% increase in the use of telemedicine. Given these shifts in how and where Americans receive emergency care, the Attorney General urged the Departments to increase consumer protections from surprise billing by broadening the IFR’s current definition of “urgent care center” to include entities like traditional and specialty urgent care clinics, retail clinics, and telemedicine.

A copy of the comment letter is available here.