The Wall Street Journal (1/9) reports that the California Supreme Court ruled Thursday that emergency department (ED) "patients can no longer be billed by doctors and hospitals for care that isn't fully paid by their health plans." Through this practice, known as balance billing, "doctors and hospitals seek to collect from patients any amounts that their managed-care plans refuse to pay." The decision "overturned a lower-court ruling and found that billing disputes over medical care must be resolved solely between providers and health plans."
The Los Angeles Times (1/9, Girion) adds that the case "stemmed from a dispute between emergency physicians and the Prospect Medical Group, a Southern California physician organization that operates like an HMO." When the Department of Managed Healthcare "failed to negotiate a compromise between physicians and HMOs," it "issued regulations banning balance billing." HMOs contend that balance billing allows physicians and hospitals to "submit inflated charges." Meanwhile, "hospitals and physicians say that without minimum fee requirements, HMOs routinely underpay them."
According to the AP (1/9, Elias), the unanimous ruling "affects California's roughly 21 million HMO members when they are treated by [ED] doctors." Writing for the court, Justice Ming Chin "noted that a 1994 law requires HMOS to pay for out-of-system [ED] visits and it also empowered doctors to sue the managed healthcare insurers if they were underpaid." Meanwhile, the court "left unresolved other out-of-system visits that result in patients receiving...bills." The court also "declined to inject itself into what constitutes 'fair and reasonable' charges and payments," the Sacramento Bee (1/8, Calvan) noted. The issue remains "a sticking point between medical care providers and insurers."
The San Francisco Chronicle (1/9, Egelko) reports that Dr. Dev A. GnanaDev, a trauma surgeon and president of the California Medical Association (CMA), argues that "the ban on billing patients would shift costs from health maintenance organizations to doctors, some of whom will end their affiliations with" EDs. He added that the ruling "will make the situation significantly worse," because California's EDs "are really in bad shape."
Gov. Arnold Schwarzenegger (R), however, "applauded the court action," according to the Sacramento Business Journal (1/9, Robertson). In addition, Chris Ohman, CEO of the California Association of Health Plans, "called the ruling a 'huge victory' for insured patients." Meanwhile, the CMA, the state chapter of the American College of Emergency Physicians, and the California Hospital Association, as well as "several other medical specialty groups" that filed the suit, are expected to appeal the decision, American Medical News (1/8, Henry) pointed out. The Central Valley Business Times (1/8) and California's Daily Breeze (1/9, Evans) also covered the story.
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