Hospital, Physician Groups File Lawsuit To Block Enforcement of California Rules That Ban Balance Billing

Several hospital and physician groups in California have filed a lawsuit that seeks to block enforcement of new rules that ban the practice of balance billing for emergency care, but state officials said they will move forward with the ban despite the legal challenges, the Los Angeles Times reports. The new rules, which take effect on Wednesday, prohibit physicians from charging patients directly for emergency care when the doctors have billing disputes with insurance companies.

Balance billing often occurs when insured patients seek medical care from physicians at out-of-network emergency departments. The out-of-network hospitals and physicians may bill insurers more than what would normally be paid for in-network treatment and insurers may send back less than the full payment. Insurers "accuse hospitals and physicians of taking advantage of the situation and sending out inflated bills," while hospitals and physicians "counter that it is the insurers that take advantage by paying far less than reasonable and customary rates," the Times reports.

Ned Wigglesworth, a spokesperson for California Medical Association, said, "The root cause of balance billing is HMOs underpaying providers," adding the purpose of the California Department of Managed Health Care "is to regulate HMOs." He said, "Yet, instead of addressing balance billing by addressing the misfeasance of the industry it is supposed to regulate, the DMHC went after doctors and hospitals," adding, "The question is why."

DMHC Director Cindy Ehnes said the enforcement of the new rules will proceed as scheduled to address the hardship that balance billing creates for patients. Ehnes said, "No longer will Californians face the possibility that if they have to use an emergency room, they may be stuck with a bill, asking them to pay a second time for emergency care, which they already purchased with their (insurance) policy." Ehnes added, "We believe our legal authority to protect consumers from balance billing is clear, and we believe our moral authority is even more clear."

In related news, the state Supreme Court this month will hear arguments in a DMHC lawsuit against Prime Healthcare Services involving balance billing allegations. Ehnes said that Prime Healthcare is a "serial balance biller whose actions have unjustly threatened the credit rating of thousands of Californians," adding that patients should not be caught in the midst of billing disputes involving hospitals, physicians and insurers (Girion, Los Angeles Times, 10/15).