California's ‘Surprise’ Billing Law Is Protecting Patients and Angering Doctors
Physician here.The problem with this law is it takes the medical reimbursement contract system and then shoots the physicians in the back.When insurance companies are trying to get people to join their network, they offer competitive rates.  Once they are large enough, they start to exert downward pressure on physician reimbursement to both existing and new medical service providers (hospitals and physicians).  The only way to counteract their pricing power is to be willing to walk.  Physicians do not like going out of network; the insurance companies make it incredibly painful, refuse to pay you, and instead send the check to the patient who is expected to deposit it and forward it to the patient (if they pay at all).However, what has happened post-ACA is massive consolidation across the medical services sector so that large staffing companies would deliberately go out of network to force better rates strategically.  It was no longer the individual physicians choice whether or not to out of network; rather their employers'.However, these laws are a huge gift to the insurance companies.  They remove the physician/hospital's ability to negotiate, and already, we are seeing insurance carriers refuse to negotiate or offer rates greater than 125% of Medicare.  It also completely eliminates the incentive for insurance carriers to even bother creating a provider network.  This is not the intent of the law and fundamentally is acting as a wage-cap.Medicare rates are intentionally set by fiat and often below the cost of goods sold.  125% of Medicare is an arbitrary "sounds good" number that is not helping anyone but the insurance companies.Instead, a better version of the law would be to have payments indexed to the FAIR health claims database [https://www.fairhealth.org].Yes, I agree the medical reimbursement system in the US is not ideal; however, this is tantamount to price fixing which in EVERY thread on compensation for software engineers, people think what Google/Apple/et Al did to prevent wage increases and poaching was unethical and unfair to workers.  I don't think this is any different.