Winding up in the emergency room is bad enough. But the California Supreme Court ruled Thursday that patients no longer have to worry about getting billed for emergency treatment charges that their HMOs fail to pay.
Health maintenance organizations and patient advocates hailed the decision as an important protection against gouging by hospitals and physicians. But doctors said it would encourage greedy HMOs to underpay them and that that could put emergency rooms in jeopardy.
The decision resolves one part of a contentious debate that has vexed courts, lawmakers and regulators for years. But it leaves open the question of what constitutes reasonable payment for emergency services. Regulations require HMOs to pay hospitals and physicians reasonable fees but do not set out specific amounts.
At issue in the case is a practice known as balance billing, a practice that typically occurs when a patient is treated for an emergency at a hospital that does not have a fee contract with the patient's HMO.
In such cases, HMOs say, physicians and hospitals often submit inflated charges. But hospitals and physicians say that without minimum fee requirements, HMOs routinely underpay them.
Disputing such underpayments is impractical and costly, physicians say, so they bill patients for the balance, hoping the patients' complaints will prompt the HMO to pay in full.
Gov. Arnold Schwarzenegger praised the ruling because it "reaffirms that patients should not be put in the middle of billing disputes between providers and health plans."
Two years ago, Schwarzenegger directed his Department of Managed Health Care to adopt regulations banning balance billing, and last year he vetoed a bill that would have set minimum payments for emergency care.
Chris Ohman, chief executive of the California Assn. of Health Plans, said the ruling would help contain healthcare costs and give consumers "the peace of mind they should have with health insurance."
"They will no longer face the threat of receiving bills from emergency room doctors who want more than the fair payment a health plan is willing to cover," he said.
Physicians said they were disappointed by the decision and bristled at the notion that they would overcharge. They said the loss of patient billing removed what little leverage they had with big HMOs to get fair payment.
