Cal Path Facts

Ruling that Bans Balance Billing - More Information and Guidance

We informed you last week that 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. The impact on pathology is limited since it is emergency services but the principal is important to all Hospital based physicians.

There is an updated version of the Balance Billing Toolkit prepared by CMA Legal Counsel to assist physicians in dealing with the impact of this new ban on balance billing patients. It is attached in the 'Quick Links' column and can also be found on the CSP website homepage at www.calpath.org. It replaces the earlier version that was also posted there. The Court has clearly directed that the physicians resolve the issue of fair payment with the HMO or delegated medical group. The DMHC also has a dispute resolution mechanism that would adjudicate what is "fair payment". The Toolkit provides the alternatives and addresses the issue of retroactivity, i.e. is the Supreme Court decision retroactive and what about bills to patients for services rendered prior to the decision. It appears that the best advice is to not balance bill patients for services after the effective date of 10/15/08 for the DMHC prohibition and clearly not after 1/13/09 and the Supreme Court ruling.

The effort now will focus on legal and legislative solutions to protect hospital based physicians and to assure fair payment for services rendered. That effort will need more data and experience on what HMOs and medical groups are actually reimbursing non-contracted physicians for emergency services. To that end we encourage you to review and complete the attached survey developed by the CMA to evaluate what changes are occurring and the levels or reimbursement. We have attached a copy of the survey and you can also complete it on line by going to http://www.cmanet.org/news/bb_survey.asp , where we can more easily digest and analyze the responses.

We will keep you informed as developments occur.