AAPS vs. Brown – Protecting Physicians and Patients from AB 72

Update 7/12/2018:

AAPS files Memorandum in Opposition to Motion to Dismiss: http://aapsonline.org/judicial/aaps-v-rouillard-7-12-2018.pdf

Update 4/30/2018:
AAPS file Amended Complaint: http://aapsonline.org/judicial/AAPS-v-Rouillard-4-30-2018.pdf

Update 11/3/2017:

AAPS files supplemental brief at request of District Judge: https://goo.gl/h2jWVQ

Update 10/20/2017:

Kudos to the courageous California physicians standing up with and for their colleagues and patients against this bad bill.

Our challenge to AB 72 went very well in federal court on Thursday, where we are litigating Association of American Physicians & Surgeons v. Brown, Gov. of California, et al., 16-cv-2441-MCE.  California AB 72 authorizes insurance companies to impose their own in-network rates against all physicians.  If AB 72 is not blocked, reimbursement rates for all physicians will soon be reduced to only 125% of Medicare.  Many concerned physicians attended this hearing in federal court in Sacramento, and all were pleased by the thorough understanding and concerns expressed by the Court based on our submissions and presentation.

At the hearing we emphasized how AB 72 does not allow any practical way to challenge the adequacy of reimbursements, which is a violation of due process.  Rent control laws, for example, are unconstitutional if they lack a means to challenge the fairness of the price controls.  AB 72 also constitutes an unconstitutional takings from physicians who have invested so much in their medical licenses but are prevented from recouping a fair return on their large investments in their careers.

The Court expressed particular concern about whether AB 72’s mandatory, binding arbitration for fee disputes is constitutional.  AB 72 denies physicians timely access to the courts to challenge inadequate reimbursements, and instead forces them to pursue impractical internal review procedures with insurance companies followed by a binding arbitration system.  The Court requested additional briefing on this potentially unconstitutionally foundation of AB 72.  Striking this arbitration procedure would end AB 72.

The Court also probed additional aspects of the unprecedented AB 72, which is already making it difficult to practice outside of insurance networks and is quickly driving reimbursements lower.   In response to a suggestion by the State that physicians do not have to see patients out-of-network under AB 72, the Court mentioned AAPS’s assertion that fewer out-of-network physicians could result in less care for uninsured, underserved communities, charity work often shouldered by out-of-network doctors.

In addition to my arguments on behalf of AAPS, attorney Marc Del Piero made a well-received presentation at the hearing against AB 72 on behalf of amicus Physicians Advocacy Council.  The Court also read into the record its receipt of letters from four additional physicians’ groups in California which support our side in our challenge to AB 72.

Update 10/16/2017:

AAPS v. Brown, 2:16-cv-02441-MCE-EFB

Dear AAPS Members and Friends:

AAPS vs. Brown, our challenge to AB 72 and its attack on independent physicians and their patients, will get its day in court this Thursday, Ocbober 19, at 2pm.

You are welcome to join your colleagues at the  Robert T. Matsui United States Courthouse in Sacramento to hear the proceedings as AAPS General Counsel, Andrew Schlafly, argues the case before Judge Morrison C. England, Jr.

Please bring a friend, a physician or patient … anyone is welcome. We will have press present. No white coats. Just professional attire.

Date/Time and Location:

2pm Thursday, October 19, 2017

Robert T. Matsui United States Courthouse
501 I Street
Sacramento, CA 95814
Courtroom 7, 14th floor
Click here for map.

Hope to see you there!

More details about this crucial lawsuit can be found below.

Update 8/25/2017: AAPS files Memorandum of Points and Authorities in Opposition to the Motion for Judgment on the Pleadings – http://aapsonline.org/judicial/aaps-v-brown-08-24-2017.pdf

Read Complaint: http://www.aapsonline.org/judicial/aaps-v-brown-10-13-2016.pdf

Dear AAPS Members and Friends:

A horrendous anti-physician bill was just signed into law by California Governor Jerry Brown, and we are suing to stop this bad idea before it spreads nationwide. The bill imposes wage-and-price controls against physicians, and allows insurance companies to set the rates for all physicians, even those not under contract with the insurance companies.

This is a devastating blow to the practice of private medicine, unless we stop it in court.

Falsely promoted as a fix for “surprise medical bills,” this new law (AB 72) hands control over to insurance bureaucrats to essentially decide what out-of-network physicians will be paid for life-saving medical care.Independent doctors, already under attack from all directions, could be forced to shut their doors. Patients are having a hard enough time as it is finding doctors and this scheme will only exacerbate the physician shortage.

While other medical associations have already waved the white flag of surrender and are refusing to challenge this law, AAPS and its members will never back down when it comes to standing up for physicians and patients. Today we filed suit in federal court to stop this law.

We must be straightforward with you: this battle is not going to be easy and it’s not going to be cheap. We are going to need all hands on deck to beat back this harmful legislation before it roars across the country.

Your tax-deductible contribution TODAY to our American Health Legal Foundation will go directly to fund this crucial fight.

Please visit http://AmericanHealthLegalFoundation.org to pitch in to make sure we have the resources to effectively pursue this lawsuit.

Other states have passed balanced billing bans, that limit patients’ out of pocket costs, but none are as brazen and this new California law. It basically prohibits billing the insurance company more than what it wants to pay! If unchecked, other states will soon be following California’s lead to the detriment of doctors and patients.

Here’s an excerpt from the AAPS lawsuit, AAPS vs. Jerry Brown, filed in United State District Court for the Eastern District of California:

The Act [AB 72] 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.

To read the entire initial complaint CLICK HERE. We are asking for an immediate injunction to stop this unconstitutional law from going into effect.

Thank you to all our loyal members and friends for making this action possible! Your continued support today will amplify the force we can apply to this pivotal case.

~AAPS.

Stop AB 3087

Update: Thanks to your efforts, this bill has been stopped, at least for the current session. It is likely to be back so stay tuned for future updates.

Dear AAPS Members and Friends,

Last week the California Assembly Committee on Health approved AB 3087 by an 11 to 4 vote. Its next stop looks to be the Appropriation Committee before likely heading to a full Assembly vote.

“This bill, introduced by Assemblymember Ash Kalra (D- San Jose), is the latest effort by special interests to unilaterally implement state control of physician practices and payments,” writes Linda B. Hertzberg, MD of the American Society of Anesthesiologists.

As Adam Summers of the Independent Institute warns: “Doctors, who already struggle with low and notoriously late and unpredictable government reimbursements, are already warning that the new law would force many of them to move to less restrictive states or leave the medical field, which would only worsen the shortage of doctors caused by previous government supply restrictions and further reduce patients’ access to and quality of care.”

Please take a moment TODAY and ask your Assemblymember to oppose AB 3087 if and when it comes up for a vote.

Quick links to contact Assemblymembers are available here:
http://assembly.ca.gov/assemblymembers

Here is a template for what you might say in your note:

Dear Assemblymember:

I am a physician/patient in your district asking you to oppose AB 3087. The price controls resulting from this bill will serve to restrict access to care. Californians would be better served by solutions that aim to re-empower patients to exert their true market clout. The legislature could look at the reference-based pricing program of the California Public Employees Retirement System, for instance. Empowering CalPERS members to be savvy consumers is lowering the cost of high-quality medical care. Please vote “NO” on AB 3087 if it comes up for a vote. Price controls will fail patients and drive physicians out of this state; better solutions exist and should be pursued.

Meanwhile AAPS continues to press forward with our lawsuit against AB 72, a precursor to AB 3087.

After a promising hearing in U.S. District Court late last year, the court has issued a ruling giving AAPS an opportunity to provide more evidence of harm arising from this flawed legislation.

On Monday we filed our latest brief with the Court, further outlining how the provisions in AB 72 violate constitutional rights and cause ongoing harm to out-of-network and opted-out AAPS members who practice in California.

If you have experienced underpayment resulting from the price fixing provisions in AB 72, please reach out to us and let us know.

Thank you for standing with AAPS, your colleagues, and your patients as we fight together to save independent medicine in California and across the United States.

~AAPS