Governor Newsom has signed AB 716, a new law that takes effect on January 1, which modifies ambulance billing practices to prevent out-of-network patients from receiving unanticipated medical bills for emergency medical ground transportation.

According to the California Health Benefits Review Program (CHBRP), California has 715 total public and private ambulance services statewide, with 3,600 licensed ambulances. There are 337 emergency ambulance service areas (zones) statewide, of which more than 220 are served by private ambulance companies.

The estimated total annual expenditures for ground ambulance services in California is approximately $2 billion.

Though the federal Patient Protection and Affordable Care Act requires health plans to cover out-of-network emergency ground medical transport (EGMT) at usual and customary rates (UCR), there are no specific standards regarding UCR.

Health plans often set their UCR much lower than what an ambulance provider charges, leaving patients open to financial liability for the remainder of the charges. For enrollees in Department of Managed Health Care (DMHC)-regulated plans and California Department of Insurance (CDI)-regulated policies, health professionals and facilities are categorized as in- network or out-of-network, based on whether they have an existing contract with specific health plans or insurers to provide service to their enrollees for a specific payment amount. In-network health facilities and professionals have a contract with the enrollee’s plan or insurer that defines a contracted rate for payment for services (and no balance billing of the enrollee is allowed).

However, when an out-of-network provider’s billed charge is more than the plan or insurer will pay, the provider may then seek to recoup the difference, or balance bill, directly from the enrollee.

After January 1, under AB 716, a health care service plan contract or a health insurance policy issued, amended, or renewed on or after January 1, 2024, an enrollee or insured who receives covered services from a non- contracting ground ambulance provider will be required to pay no more than the same cost-sharing amount that the enrollee or insured would pay for the same covered services received from a contracting ground ambulance provider.

A noncontracting ground ambulance provider will be prohibited from billing or sending to collections a higher amount, and would prohibit a ground ambulance provider from billing an uninsured or self-pay patient more than the established payment by Medi-Cal or Medicare fee-for-service amount, whichever is greater.

Under the federal “No Surprises Act,” which Congress passed in 2020, prohibits most surprise out-of-network bills when a patient receives out-of-network services during an emergency visit or at an in-network hospital without advance notice. The “No Surprises Act” includes air ambulances, but does not include ground ambulance services.

California is the 14th state to provide some protection against balance billing for ground ambulance rides.