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California Supreme Court Says "No" To ER "Balance Billing"

Personal injury lawyers have seen disputes between HMOs and ER physicians for years. In a victory for patients, the California Supreme Court has decided that ER physicians may not go after patients for any outstanding balance remaining after being paid for their emergency services by the patient's HMO.

Prior to the court's decision, ER physicians had been going around HMOs and seeking payment from patients who were often surprised by an additional bill for their services. "This is a clear victory for ER patients," noted California personal injury attorney John Bisnar. "Patients who made good faith premium payments to HMOs had a reasonable expectation that the HMO would pay for their ER expenses, less any deductibles.

State law mandates that ER physicians perform emergency services to stabilize a patient. If the patient is a member of an HMO, the HMO is statutorily required to pay for the emergency care. The problem, in many cases, is that in ER situations, HMOs may not have had a prior contract with the physician performing the service. And thus, the increasing source of friction has been the widening gap between what the HMO will pay and what ER physicians will accept. This has forced many ER physicians to seek full compensation for their services, billing patients directly for the balance, and in some cases, even hiring collection agencies to hound patients. The court's decision finally puts an end to these practices.

In its opinion, the court said, "We conclude that billing disputes over Emergency medical care must be resolved solely between the emergency room Doctors, who are entitled to a reasonable payment for their services, and the HMO, Which is obligated to make that payment? A patient who is a member of an HMO May not be injected into the dispute. Emergency room doctors may not bill the Patient for the disputed amount."

"This decision gives ER doctors a refuge against unfair determinations by HMOs who have been offering doctors increasingly lower reimbursements for their services," observed John Bisnar. "The legislature has a history of siding with the patients and avoiding the insertion of patients in these disputes."

In 1975, the Legislature banned balance billing when an HMO is contractually obligated to pay the bill. Since 1994, HMO's have been obligated to pay for emergency care and that the Knox-Keene Act permits emergency room doctors to sue HMO's directly over billing disputes. These provisions strongly suggest that doctors may not bill patients directly when a dispute arises between doctors and the HMO's. Other provisions point in the same direction, requiring emergency room doctors to render emergency care without questioning a patient's ability to pay. Such provisions call for the patient or their legally responsible relative or guardian to execute an agreement to pay for services rendered or supply insurance or credit information promptly after the services are rendered. This implies that once patients who are members of an HMO provide insurance information, they have satisfied their obligation towards the doctors. The legislative intent was to ensure the best possible health care for the public at the lowest possible cost by transferring the financial risk of health care from patients to providers.

The Legislature further contemplated there may be disputes over the amounts owed to non-contracting providers such as emergency room doctors, and therefore the Knox-Keene Act requires that each HMO "shall ensure that a dispute resolution mechanism is accessible to non-contracting providers for the purpose of resolving billing and claims disputes."

"The goal here was to ensure that each HMO adopts a dispute resolution mechanism that is "fair, fast, and cost-effective for contracting and non-contracting providers,"" noted John Bisnar. "The legislature acted to protect the interests of non-contracting providers in reimbursement disputes by prohibiting HMO's from engaging in unfair payment patterns, unjust payment reductions, claim denials, and other unfair practices."

While the bill an ER doctor submits may or may not be the reasonable payment to which they are entitled, an HMO does not have limitless discretion to determine unilaterally the amount it will reimburse a non-contracting provider. Conversely, emergency room doctors do not have unfettered discretion to charge whatever they choose for emergency services. Emergency room doctors and HMO's must resolve their disputes among themselves.

If you or a loved one has suffered serious injuries as the result of a defective auto part or vehicle, contact the experienced California auto products liability attorneys at Bisnar Chase Personal Injury Attorneys for a free consultation. We will use our extensive knowledge and resources to achieve the best possible results for you and your family.

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