The California Medical Association (CMA) has defeated a bill that would have drastically changed the current health care marketplace by allowing a massive transfer of negotiating power to the health plans at the expense of physicians. Assembly Bill 533 was an attempt to shield patients from billing disputes between providers and health plans and would have required non-contracted physicians and dentists to accept Medicare rates as payment in full when performing services in a contracted or “in-network” facility.

Although CMA is in favor of removing patients from billing disputes between health plans and out-of-network physicians, this specific solution was unacceptable and would have transferred far too much power to health plans. If physicians were required to accept Medicare rates, the plans would have no motivation to contract with physicians. This not only would have eliminated physicians' abilities to negotiate fair contracts and payment rates, but also would have incentivized plans to maintain narrower networks—without any punishment for failing to maintain adequate networks.

In the late days of the session, the bill's author—Assemblymember Rob Bonta (AD 18, Alameda County) —transformed AB 533 from a bad bill into a hostile act against the medical profession. Overnight, the bill became essentially a health plan-sponsored bill, with the strong support of consumer groups and organized labor.

AB 533 would have done more harm than good by giving massive market power and profits to health plans and insurers, while placing unfair burdens on the state’s physicians and patients.

The measure would also have implemented a three-day delay for patients accessing out-of-network physicians under a PPO plan and created complications for physicians with an undefined dispute resolution process.

CMA fought the measure to the end, rallying physicians and lobbying against it until a final vote was taken at midnight on the last day of the legislative session. Ultimately, the bill did not receive enough votes to advance.