CA Court Bans Direct Billing in Emergency Rooms

Early in January, the California High Court banned emergency room doctors from directly billing insured patients, after their HMOs refused to pay their emergency medical care bills. The High Court has decided that doctors should not be allowed to take up the issue with patients if they believe they’ve been shortchanged by the patient’s HMO.

This new ruling affects around 21 million people, providing them with protection if they are treated by emergency room doctors who are not covered by their HMO plan.

The issue centers around a practice called balance billing. Sometimes, HMOs don’t cover the entirely of an emergency treatment bill, typically because the doctor used by the policy holder isn’t covered by the HMO’s plan. In these cases, the doctor concerned normally directly bills the patient who received the treatment.

High Court Says Don’t Involve Patients in Billing Disputes

In the unanimous seven-person ruling, Justice Ming Chin wrote, “Emergency room doctors must resolve their differences with HMOs and not inject patients into the dispute…We perceive a clear legislative policy not to place patients in the middle of billing disputes between doctors and HMOs.”

In the decision, Chin also wrote of a 1994 law requiring HMOs to pay for emergency visits that were made out of the system, and also made provision for emergency room doctors to sue HMOs if they were not fully paid for their work. Chin concluded that “These provisions strongly suggest that doctors may not bill patients directly when a dispute arises between doctors and the HMOs.”

Good News for Patients, but Doctors aren’t Happy

Unfortunately, many doctors feel that the ruling is going to leave them severely disadvantaged. The California Medical Association has said that the court’s ruling means HMOs will now be in the best position to determine the value of work done by emergency room doctors.

Trauma surgeon Dr. Dev A. GnanaDev, the president of the CMA, claims that the ruling means financially strained emergency rooms will find themselves even more so thanks to this ruling, with emergency doctors forced to go to court if HMOs refuse to pay bills.

So now, the tug-of-war between HMOs and emergency patients has simply changed ends, with the war now between HMOs and emergency room doctors. Doctors complain that HMOs routinely shortchange them on bills, while the HMOS complain that doctors inflate those bills.

It’s hard to say who’s right here, but seventy emergency rooms have closed in California since 1990, and this new ruling is not likely to improve the situation.

photo credit: Todd Ehlers

Tags: california medical association, emergency room cost, emergency rooms, health insurance cost, HMO, HMO plans

This entry was posted on Friday, January 30th, 2009 at 4:38 pm and is filed under Health & Politics, Health Insurance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.