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State suing doctor over billing tactics

Jeannette Martello's aggressive tactics to collect fees from emergency room patients — including lawsuits and taking out liens on their homes — prompt unprecedented court case by state officials.

August 17, 2012|By Anna Gorman, Los Angeles Times
  • Bill Buck was treated in an emergency room by Dr. Jeannette Martello for a workplace injury. Not satisfied with her insurance payment, the doctor sued Buck, his wife and his business for the full amount.
Bill Buck was treated in an emergency room by Dr. Jeannette Martello for… (Irfan Khan / Los Angeles…)

When Bill Buck accidentally cut off the tip of his finger at his Duarte cabinet workshop two years ago, he headed to Huntington Memorial Hospital's emergency room.

He assumed his insurance company would sort out the $12,630 bill from the plastic surgeon, Jeannette Martello.

But Martello wasn't satisfied with the $3,500 insurance reimbursement, so she returned the check and filed a lawsuit against Buck, his wife and his business for the full amount, according to the state attorney general's office. She also began a process to force the sale of Buck's home to collect the money, records show.

Martello's use of aggressive tactics to collect fees from emergency room patients like Buck — including lawsuits, taking out liens on their homes and damaging their credit — prompted an unprecedented court case by state health officials and a judge's order for Martello to cease the practices.

The underlying issue is familiar: many physicians don't believe they are getting paid enough for their services. Doctors bill insurance firms and frequently get a fraction of their full fees.

Under managed care plans, out-of-network doctors are supposed to receive the "reasonable and customary" value of the service. "As you can imagine, there is a wide gulf between what the health plans think is reasonable and customary and what the doctor thinks is reasonable and customary," said Carol Lucas, a healthcare attorney not involved in any of Martello's cases.

The state's lawsuit against Martello, however, is the first of its kind, according to Marta Green, California Department of Managed Health Care spokeswoman. State officials allege in court papers that Martello collected or attempted to collect more from patients than insurance companies paid, a practice known as balance billing.

Protections against balance billing are strongest in emergency cases because patients have less control over who treats them, experts note.

Martello's attorney, Andrew Selesnick, acknowledged his client was "very persistent" about collecting bills but said she was lawfully pursuing her rights to recoup fees for her services. With a private practice in South Pasadena, Martello has treated patients bitten by dogs or injured in falls, car crashes or construction accidents. Through her attorney, Martello declined to comment.

In a statement, Huntington Memorial Hospital told The Times that Martello was no longer under contract to provide on-call emergency services there.

The state's managed health care department, which tried more than once in recent years to halt Martello's bill collection practices, said there were at least 10 court cases in which the doctor allegedly violated the law by seeking payments from patients covered by managed care. It's not clear how many patients overall may have been affected, but Los Angeles County Superior Court records list Martello as a plaintiff in more than 50 civil cases since 2010, many of them breach of contract claims.

Under state law, patients like Buck with managed care plans are entitled to have their emergency care covered, experts said. Disputes over payments — for patients with certain plans — are supposed to be resolved between the doctor and the health plan under a 2009 California Supreme Court decision, experts said.

"The Supreme Court was very clear," Lucas said. "If the doctor is unhappy with what they are getting paid by the managed care plan, they need to fight it out with the health plan and leave the patient out of it."

But Selesnick, Martello's attorney, said the emergency room patients his client billed were in stable condition at the time of treatment. Because she was not providing emergency services, he said, she was allowed to bill them for what the insurance companies wouldn't cover.

"The question is, 'Were these emergencies or not?'" he said. "We don't believe that they were emergencies. The issue is not black and white. It is very gray."

Selesnick said the patients didn't want an emergency room doctor to stitch them up, so they waited for a plastic surgeon. "They wanted a professional," he said. He added, "No one is complaining that Dr. Martello did a bad job."

Selesnick argued that the state's case against his client underscores a larger problem: no one wants to pay for medical services. "Dr. Martello is definitely passionate about being a physician," he said. "She is equally as passionate about getting paid for the work that she did."

California's managed healthcare regulators investigated Martello after receiving complaints. Then, in 2010, they issued a cease-and-desist order against her. When that didn't stop her, the department sued her in Los Angeles County Superior Court — the first time the state has taken such an action against an individual doctor, officials said. The case alleged Martello's actions posed a "substantial, irreparable, and unjustified threat to the financial livelihood" of the patients. Officials said that didn't stop her either.

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