Study: Calif. surprise bill law gives payers incentive to lower provider rates

A California law that limits the size of bills from out-of-network physicians for care delivered in hospitals has changed the negotiation dynamics between hospital-based physicians and payers, giving payers an incentive to lower or cancel contracts with rates higher than their average, according to a new RAND Corporation study. Under the 2017 law, patients pay only their in-network cost-sharing obligation, and insurance plans pay the out-of-network professionals the greater of the payer's local average contracted rate or 125% of Medicare's fee-for-service rate.