California doctors to continue battling ban on balance billing

The state's director for managed care says her department will work to make sure physicians and hospitals are paid fairly.

By Tanya Albert Henry — Posted Jan. 6, 2009

Print  |   Email  |   Respond  |   Reprints  |   Like Facebook  |   Share Twitter  |   Tweet Linkedin

California physicians likely will appeal a recent state court ruling that upheld the Dept. of Managed Health Care's right to define balance billing for out-of-network emergency services as an unfair billing practice.

The California Medical Assn., the state chapter of the American College of Emergency Physicians, the California Hospital Assn. and several other medical specialty groups sued the department to halt rules banning doctors and hospitals from billing patients for out-of-network emergency care costs that health plans don't cover.

Physicians and hospitals argued balance billing is not a "billing pattern" addressed in the law that governs the state's managed care department. They maintained the statute only allows the Dept. of Managed Health Care to regulate how a practitioner bills, addressing issues such as upcoding or unbundling.

But physicians and hospitals told the court that making rules pertaining to balance billing regulates who a physician or hospital bills. That is something the law doesn't give the managed care department the authority to do, organized medicine argued.

The court disagreed with the interpretation. The Sacramento County trial court in December 2008 ruled that the department had the legal authority to create the regulation that has been in place since Oct. 15, 2008. The court noted that "nothing in the express language of [the law] ... limits what can constitute an unfair billing pattern in terms of who and how. DMHC's conclusion that balance billing can constitute a demonstrable and unjust billing pattern is reasonable and not in conflict with [the law]."

Dissatisfied with court decision

CMA officials said the ruling leaves important questions unanswered. They are exploring an appeal.

"The court only upheld the DMHC's right to define 'balance billing' as an unfair billing practice. The court explicitly chose not to address whether the DMHC has the authority to enforce that definition against providers, leaving that issue for another day," the CMA, lead plaintiff on the lawsuit, said in a statement.

CMA officials said the regulation is a one-sided rule that does not address why physicians balance bill in the first place: HMOs do not pay the emergency care bill for policyholders.

"It is also short-sighted in that it will transfer hundreds of millions of dollars from California's distressed system of emergency care to HMOs," the CMA said in its statement. "Another related systematic impact will be to remove incentives that HMOs have to contract with providers, which will leave Californians with smaller networks of HMO providers and less access to the health care they need."

Dept. of Managed Health Care Director Cindy Ehnes said the court's ruling protects patients from balance billing for emergency services.

"Our legal authority to protect consumers from bills they should never have received has now been confirmed," Ehnes said in a statement. "We will continue to not only defend consumers from being caught in the middle of billing disputes but also work to ensure that providers are paid fairly and on time."

Back to top



Read story

Confronting bias against obese patients

Medical educators are starting to raise awareness about how weight-related stigma can impair patient-physician communication and the treatment of obesity. Read story

Read story


American Medical News is ceasing publication after 55 years of serving physicians by keeping them informed of their rapidly changing profession. Read story

Read story

Policing medical practice employees after work

Doctors can try to regulate staff actions outside the office, but they must watch what they try to stamp out and how they do it. Read story

Read story

Diabetes prevention: Set on a course for lifestyle change

The YMCA's evidence-based program is helping prediabetic patients eat right, get active and lose weight. Read story

Read story

Medicaid's muddled preventive care picture

The health system reform law promises no-cost coverage of a lengthy list of screenings and other prevention services, but some beneficiaries still might miss out. Read story

Read story

How to get tax breaks for your medical practice

Federal, state and local governments offer doctors incentives because practices are recognized as economic engines. But physicians must know how and where to find them. Read story

Read story

Advance pay ACOs: A down payment on Medicare's future

Accountable care organizations that pay doctors up-front bring practice improvements, but it's unclear yet if program actuaries will see a return on investment. Read story

Read story

Physician liability: Your team, your legal risk

When health care team members drop the ball, it's often doctors who end up in court. How can physicians improve such care and avoid risks? Read story

  • Stay informed
  • Twitter
  • Facebook
  • RSS
  • LinkedIn