A Sacramento judge has affirmed state regulations aimed at protecting consumers in payment disputes between hospitals and insurers, easing the financial burden on patients who get stuck with the cost of emergency care that they assumed would be paid by their medical policies.
The case, which will likely be appealed by hospital and medical associations, is the latest skirmish over a practice known as "balance billing," which affects people who are members of HMOs.
About 20 million Californians are members of HMOs.
The practice most often occurs when patients receive emergency care at a hospital that is not part of their list of network providers.
Insurers negotiate fees with member hospitals – but "out-of-network" providers aren't bound by those fees and often seek payment on the balance not covered by what an insurance company is willing to pay.
If a hospital or emergency room doctor can't get payment from the insurance company, they then seek payment for the unpaid balance directly from the patient – sometimes for thousands of dollars.
Two years ago, Gov. Arnold Schwarzenegger directed the Department of Managed Health Care to end balance billing. Regulations that deem it an unfair practice went into effect Oct. 15.
Sacramento Superior Court Judge Michael P. Kenny had tentatively sided with the state last month, but agreed to hear further arguments from the California Medical Association and the California Hospital Association, which tried to stop the regulations from going into effect as scheduled in October.
He affirmed the department's regulations late Tuesday.
The hospitals and medical groups argued the order was unfair and could undermine the networks and agreements already in place between insurers and their member hospitals.
State officials could not say how many people are affected by balance billing, but the number of complaints have been relatively few – about 325 complaints filed with the department since 2004, said spokeswoman Lynne Randolph.
Nevertheless, the Governor's Office sought the regulations after being alarmed by the economic anguish suffered by consumers who found themselves caught in the middle of payment disputes.
Call The Bee's Bobby Caina Calvan, (916) 321-1067.
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