This is a victory for patients and California consumers. I’m talking about the California Supreme Court’s decision, which firmly establishes that emergency room physicians may not go after patients to collect any remaining balance remaining after being paid for their services by the patient’s HMO. Before the court’s decision ER physicians had this practice of hounding patients to pay additional bills for emergency services, often sending collection agencies after them. Our source for this blog was this news report in the San Francisco Business Times.
How big is this problem? A 2007 study by the California Association of Health Plans, an HMO industry group, reports that more than 1.8 million insured Californians who visited emergency rooms between 2005 and 2007, received bills on top of their copayments and deductibles. The average bill was $300, translating to an overall tab (for that two-year period) of $528 million.
State law requires that ER physicians perform emergency services to stabilize a patient. If the patient has HMO, then the HMO is required to pay for such emergency care. The problem, however, is that in emergency situations, HMOs may not have had a prior contract with the physician who is performing that service. So there has been increasing friction between the HMOs and emergency physicians about the discrepancy between what the HMOs will pay and what the physician has billed or will accept. This situation has forced many ER physicians to bill patients directly for the balance.
The California Supreme Court’s decision has finally put an end to this nonsense. The court rightly concluded that billing disputes over emergency services must be resolved between the HMO and the emergency physicians. I absolutely agree. Patients who made good faith premium HMO payments have a reasonable expectation that the HMO would pay for their ER expenses, minus any deductibles. It is unfair to insert a patient into a dispute between the doctor and the HMO and that is exactly what the court found.
This decision also gives ER physicians protection against unfair determinations by HMOs, who have been offering these doctors lower reimbursements for their services. The legislature has also had a history of taking the patients’ side on this issue. The legislature has banned such “balance billing” since 1975. Since 1994, HMOs have been obligated to pay for emergency care and the Knox-Keene Act allows ER physicians to sue HMOs directly over billing disputes. ER doctors are also required to render emergency care to stabilize a patient without questioning a patient’s ability to pay.
However, the patient or their legally responsible relative is responsible for paying the ER physician who rendered the service. Patients who have an HMO and provide their insurance information are considered to have satisfied their obligation toward the doctors. While the bill an ER doctor submits may or may not be the reasonable payment to which they are entitled, the HMO does not have an unrestricted right to determine the amount it will reimburse the doctor. There is no question based on California law that ER doctors and HMOs must resolve their disputes among themselves. Dragging patients into these payment issues is not only unfair, but absolutely unnecessary.