Assembly Bill (AB 72) No Surprise Medical Bills

Effective July 1, 2017, non-contracted providers providing services at a contracted/in-network facility
may not balance bill an out-of-network patient (OON) for their full fee.

If a claim is billed to a payer for a provider that is (OON) and the facility is in-network, the payer will pay
the greater amount of the Average Contract Rate (ACR) or 125% of Medicare Rate. The Department of
Insurance (DOI) is working on determining the ACR. To date, this information has not been published but
are required to have it published by September 2017.

In order for RCM to process your charges correctly, we require an updated list of your facility’s
contracted payers. We are asking that our clients request this information from their current facilities.
Once we have received the updated facility contract list, RCM will work to compare this to your contract
recap and identify any discrepancies. If you have any questions regarding your contracts, you may
contact Shauna Brown, our Client Services and Contracts Manager, at 714.347.1010 or at

How claims will be processed:

  • Facility and provider Out Of Network/non- contracted – there is no change to the current process, claims
    will be processed Out Of Network and the patient will be held responsible for the full fee.
  • Facility and provider are both contracted/in- network – there is no change to the current
    process, patient will be billed up to the contract rate including their deductible and co-
  • Facility in-network/contracted and provider is Out Of Network /non- contracted – claims will process
    according to the ACR or 125% Medicare Rate (the higher of the two). The patient can only be
    billed for their in-network deductible and/or co-insurance unless a consent form is signed by the
    patient. However, for the consent form to be valid, the following steps need to be followed

    • A consent form must be presented by the provider (not a proxy) 24 hours prior to surgery.
    • A consent form must include an estimate of your fee.

This option for most practices is impractical, and we have reason to believe that even if a
consent form is signed following all guidelines, it may not be admissible in court or guarantee
that the patient or insurance will pay 100% of your charge. RC McLean is strongly advising
against utilizing the Consent Method as there are no guarantees of additional payment and
could potentially flag you as a risk to payers.

This is a developing issue and as additional information is published, we will pass it on to our clients.