Thank you to all who responded to the California Medical Association’s (CMA) survey on criteria physicians consider before signing a contract to be in a payor network. With the help of the component medical societies and several specialty societies, we had an overwhelming response to the survey, gathering over 1,100 responses from physician practices in 43 different counties within a very short period of time.
As previously reported, CMA has received numerous complaints from physicians regarding Blue Cross and Blue Shield’s refusal to honor assignment of benefits, highlighting the burden and cost it places on the physician practice to act as debt collectors rather than physicians. In many cases, this policy has jeopardized the physician-patient relationship.
To address this issue, CMA sponsored AB 1742 (Pan) to shore up this loophole and require Blue Cross and Blue Shield, the major PPOs currently refusing to honor assignment of benefits, to pay physicians directly for out-of-network services.
Representatives of Blue Cross and Blue Shield were asserting to the legislature a false claim that by removing the incentive of direct pay to the physician for out-of-network services, there would be a broad erosion of the PPO networks. In other words, they asserted that direct pay is the main reasons physicians decide to contract and if that option is removed, doctors will no longer contract with payors.
Through the survey results, CMA was able to highlight the following to the legislature:
- The two most important factors physicians consider when deciding to join a payor network are fair reimbursement rates (78 percent) and low administrative hassle factor (35 percent), followed by fair contract terms/language (34 percent) and a payor’s market share in the area (28 percent). Only 5 percent of physicians report that the guarantee of direct payment from the payor is the deciding factor.
- More than eight in 10 physicians report that the payor’s policy of paying patients directly for out-of-network services has had a negative impact on patient care.
- Almost 100 percent of the respondents who experienced an instance of the payor paying the patient directly reported difficulty collecting from the patient.
- The failure of Blue Cross and Blue Shield to honor assignment of benefits is extremely costly for physician practices. Ninety-six percent indicated there was a negative financial impact to the practice to collect from patients (e.g. lost revenue, administrative costs to collect, collection agency fees, lost follow-up business, etc.) when a payor refuses to honor assignment of benefits. Forty-nine percent reported the financial impact of a payor sending payment directly to the patient is greater than $5,000, and 14 percent report it costs their practice more than $20,000 to try to collect when payment is sent to the patient.
- Physicians in over 40 different counties report the policy negatively impacts the physician-patient relationship.
Though this specific bill failed to get out of the Assembly Health Committee and move forward, our effort to require Blue Cross and Blue Shield to honor assignment of benefits will continue. The survey results will also aid CMA legislative efforts in support of physicians and patients on various issues.
The survey results are available here.