California Ruling Halts Balance Billing for ER Care

Published on

SACRAMENTO, CA — Health insurers and medical providers will have to work out balance-billing disputes among themselves, the California Supreme Court ruled. The court found that policyholders cannot be held responsible for emergency room treatment their insurance companies do not pay.

The unanimous decision in Prospect Medical Group vs. Northridge Medical Center overturns previous rulings that found that state law did not prohibit balance billing. It was welcomed by health insurers and consumer advocates.

The California Association of Health Plans, in a statement, said the ruling against what it called a "predatory practice" will prevent consumers from being put in the middle of payment disputes between health plans and medical providers. "Our view is simple — it’s just not fair for physicians to put patients in the middle of payment disputes with health plans. Today the California Supreme Court has gone one step further and said it is against the law," CAHP Chief Executive Officer Christopher Ohman said.

"Health insurers and HMOs are as much to blame for the problem as doctors. Sometimes balance billing results when doctors want too much money. Other times, insurers refuse to pay fair rates. One thing for certain is that patients should
not have to pay a cent," Jerry Flanagan, health care policy director for Consumer Watchdog, said in a statement.

But the ruling essentially forces physicians and hospitals to shoulder the cost of care that HMOs and other insurers refuse to cover, Dr. Dev GnanaDev, president of the California Medical Association, said in a statement. More than 70 California emergency rooms have closed since 1990 and those remaining performed more than $1 billion in uncompensated care last year, he said.

"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," GnanaDev said.

In August, the California Department of Managed Health Care has finalized regulations restricting "balance billing" for emergency care, identifying as an unfair billing practice the procedure of making patients responsible for the disputed difference between a provider’s bill and the health plan’s coverage. In June, the DMHC filed a lawsuit against Prime Healthcare Services, a Southern California hospital chain, seeking penalties of $2,500 for each instance of balance billing of more than 3,500 insured patients (BestWire, Aug. 4, 2008).

Contact the author Sean P. Carr, senior associate editor, at: [email protected]

Consumer Watchdog
Consumer Watchdog
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

Latest Videos

Latest Releases

In The News

Latest Report

Support Consumer Watchdog

Subscribe to our newsletter

To be updated with all the latest news, press releases and special reports.

More Releases