California Supreme Court Issues Ruling to Ban Balance Billing
Yesterday the California Supreme Court issued a unanimous decision in the Prospect Medical Group case involving non-contracted hospital emergency room physicians and a delegated medical group. The Medical Group argued that there was an "implied" contract between the emergency room physician and the HMO enrollee in the case of emergency services that prohibited the ER physician from balance billing and requires them to seek any payment recourse from the plan or delegated medical group. The CSP has joined the CMA and other impacted medical specialties in fighting this issue in the Courts and in the Legislatures. This decision only applies to emergency services in the hospital setting but does apply to other then just ER physicians. Reprinted below is the press release from the CMA. More information will follow.
Court Decision Outlaws Balance Billing,
Increases Burden on Stressed ER System
Solution Still Needed to Address HMO Underpayment for ER Services
Sacramento - Today's ruling by the California State Supreme Court striking down the practice of "balance billing" forces physicians and hospitals to eat the cost of emergency medical care that HMOs refuse to cover, the California Medical Association said.
When HMOs don't pay the full cost of ER care for their policyholders - a growing trend - doctors must bill for the outstanding balance, creating an awful burden for both physician and patient. The practice is known as balance billing.
CMA supports a solution that protects doctors and patients by requiring HMOs to pay the bill for emergency services. By outlawing balance billing without a realistic remedy, however, the court has placed another strain on financially struggling emergency rooms and the physicians who work there.
"As a trauma surgeon, my No. 1 priority is to save lives and protect the health of my patients," said Dr. Dev A. GnanaDev, CMA president. "This court ruling basically says if I do my job as I see fit and HMOs don't want to pay, tough luck, go to court. I signed up to be a doctor, not a lawyer."
The court's failure to solve the underpayment problem will stress the already beleaguered emergency care system. More than 70 California ERs have closed since 1990. In addition, the state's emergency rooms performed more than $1 billion in services than they were paid for in the year ending June 30, 2007, the most recent statistics available, according to the Office of Statewide Health Planning and Development.
"There is no doubt this ruling adds to the growing woes of California's emergency rooms," GnanaDev said. "Sadly, this will reduce the availability of emergency care throughout the state."
CMA is exploring all of its options to ensure physicians have adequate recourse when HMOs fail to pay reasonably for emergency services.