Too often, people who end up in an emergency room also end up being charged for services and paying bills they don't owe – bills that their health insurers are legally obligated to pay.
It happens this way: In emergency situations, patients sometimes get their care from doctors in emergency rooms outside their insurance networks. Some of these doctors believe that the payments they receive from insurers are too low, so they send bills to patients for the difference – a practice called "balance billing."
Many times, consumers don't realize that these bills should not be their responsibility, and they pay them. And if they don't pay, they get collection agencies hounding them and credit agencies downgrading their credit rating.
Here's an example. In April, Prime Healthcare Services, a hospital chain in Southern California, sent collection notices to nearly 6,000 people with Kaiser insurance who had received emergency care at its hospitals. The California Association of Health Plans estimates that more than 1.75 million insured Californians who visited emergency rooms in the past two years were billed after paying their co-payments and deductibles – an average of $300.
Well, as Gov. Arnold Schwarzenegger has said, the patient shouldn't be caught in the middle of what is really a pay dispute between doctor and insurer. So the governor and the California Department of Managed Health Care finally have put an end to it.
It has taken two long years, but it's done. In July 2006, Schwarzenegger issued an executive order, then attempted over the last two years to get a compromise between feuding insurers and emergency room doctors on regulations – to no avail. On Friday, the department simply issued regulations outlawing the practice. These take effect Oct. 15, after a September hearing and publication by the secretary of state.
This is a major health care victory for Californians. Patients who face a medical emergency and end up in an emergency room no longer can be billed for services that are covered by their health insurance.
Doctors complain that they are forced into the practice because insurers deliberately follow an underpayment strategy. But as the department has pointed out, existing law doesn't allow insurers to underpay out-of-network doctors or to unilaterally set reimbursement rates to doctors.
The law requires insurers to pay out-of-network doctors the "reasonable and customary" value of their services. If a doctor believes the insurer is underpaying, the law requires health plans to provide "a fast, fair and cost-effective dispute resolution mechanism under which providers may submit disputes to the plan."
If that fails, the doctor then may go to the state Department of Managed Health Care's independent dispute resolution process. The department does a review to determine whether claims should have been paid or whether interest is due. It also looks for evidence of unfair payment patterns by the insurer that might merit further action.
The new regulation recognizes that the patient doesn't belong in the middle of this. Billing patients who have already paid their health insurance premiums, co-payments and deductibles should be no substitute for going after insurers to pay bills they are legally obligated to pay.
