Doctors claim that the system to enforce fair reimbursement rates from private and government payers is flawed.

Emergency department physicians are in the forefront fighting for what they’ve labeled as fair payment and billing practices for their services.

In January, the doctors were dealt a blow of defeat from the California Supreme Court ruling that overturned a ruling by a lower court. The ruling by the Supreme Court prevents emergency room doctors from billing patients for the balance not covered by managed care insurers. The ruling does not, however, prohibit physicians and other providers from suing managed care insurers directly.

“We couldn’t believe this ruling,” said Elena Lopez-Gusman, director of government relations for the California Chapter of the American College of Emergency Physicians. “It turns contract law on its head, and put us at a disadvantage when negotiating insurance contracts.”

The Department of Managed Health Care issued anti-balance billing policy because during an emergency the patient doesn’t always  have the choice to visit a hospital ED that has a contract  with their insurance.

As a result, thousands of ED patients across the state were left with large bills that were not paid by insurance, because the rates paid by managed care insurance often falls substantially below what the ED providers feel is reasonable.

Emergency department physicians took the state to court, claiming they didn’t have a right to get involved with their billing practices, and they shouldn’t be forced to just accept what insurance wants to pay.

The doctors lost in court.

“We’ve started out the New Year right by removing a crushing economic burden off the backs of California health care consumers,” said Cindy Ehnes, director of the California Department of Managed Care, regarding the court ruling.

“This decision confirms the DMHC’s regulatory action taken last year to protect consumers from balance billing. We’ve never retreated from protecting patients caught in the middle of billing disputes and, just as vigorously, we won’t retreat from efforts to make sure that doctors are paid fairly.”
Emergency department physicians say they are not trying to gouge patients, but rather get fair payment for their services.

Now that the doctors are not allowed to balance bill the patient there is little incentive for insurance companies to negotiate fairly on contractual payments, Lopez-Gusman said. Insurance companies now know that the patient is taken out of the loop, and they can pay whatever amount they want on a bill and don’t have to worry about the patient getting involved.

There is a law that was passed about six years ago that requires health insurance companies to pay a fair amount for medical services. A formula is used to determine the reimbursement rates, but many insurance companies have been violating that law, Lopez-Gusman said.

“We have submitted numerous complaints over the years to the department and they’ve only issued one citation,” Lopez-Gusman said.

Officials at the Department of Managed Health Care did not respond to the claims Ms. Lopez-Gusman made.
In January, a coalition of emergency room physicians, filed a class action lawsuit against MediCal, the state and federal insurance for the poor. The doctors claim reimbursement levels are far below costs, and should be increased.

Last year, the emergency room physicians won a lawsuit to block a cut in MediCal payments.

The emergency department doctors claim they are not getting the help and attention they need from state agencies to enforce the law regarding reimbursements, which is why they have turned to the courts.

“The only recourse now for the physicians is to go to court,” said Lopez-Gusman. “And that’s not cheap.”

- By Troy May

Troy May is the executive editor of the Healthcare Journal.