The Association of American Physicians and Surgeons (AAPS) filed suit in U.S. District Court on Friday asking the Court to block California AB 72, the so-called “Surprise Medical Bill” law signed last month by Governor Jerry Brown.
“This new law gives insurance bureaucrats the power to decide what out-of-network physicians can be paid for life-saving medical care,” said AAPS General Counsel Andrew Schlafly. “Independent doctors, already under attack from all directions, could be forced to shut their doors. Patients are already having trouble finding doctors, and this scheme will only exacerbate the physician shortage.”
A few other states have passed balance-billing bans that limit patients’ out-of-pocket costs, but none are as heavy-handed as AB 72, which limits the amount that insurance companies may be billed, Schlafly notes.
The Complaint launching AAPS vs. Brown, No. 2:16-cv-02441, filed in United States District Court for the Eastern District of California, states that the law violates the U.S. and California Constitutions in at least three ways:
First, the Act violates the Due Process Clauses of the U.S. and California Constitutions by delegating rate-setting authority to private insurance companies, with respect to physicians who are not under any contract with the insurance companies. In addition, the Act is unconstitutional under the Due Process Clauses by requiring arbitration for the out-of-network physicians on their reimbursements, thereby denying them their due process rights in court on their claims.
Second, the Act violates the Takings Clauses of the U.S. and California Constitutions because the Act empowers private insurance companies to deprive out-of-network physicians of the market value for their services, and arbitrarily denies them just compensation for their labor.
Third, the Act violates the Equal Protection Clauses of the U.S. and California Constitutions by having a disparate impact on minority patients for whom the availability of medical care will sharply decline as out-of-network physicians are coerced by the Act to withdraw services from predominantly minority communities.