As of October 15, 2008, there is a new California state rule that bars hospitals and doctors from billing patients for the balance of emergency treatment not paid by insurance companies. Hospitals and physicians are contesting this new law and California Supreme Court will be hearing another ‘balance bill’ challenge next month.
According to the Department of Managed Health Care director Cindy Ehnes, the practice of balance billing patients have “unjustly threatened the credit rating of thousands of Californians” and patients should not be in the middle of billing disputes between insurance companies, hospitals, and physicians.
She further 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,”
These problems usually occur when a patient ends up in a hospital due to an emergency and is the hospital is not a part of the patient’s carrier’s network. The issues further involve physicians specialists who may be called in to treat the patient. The hospital and physicians may submit claims that are higher to the patient’s insurance than what the insurance company would normally pay doctors who are a part of their network. The insurance often pay these claims at an amount that is not acceptable to the hospital and physicians. Patients often end up in collections when they refused to pay the balance of the bill.
Opposing hospitals and physicians assert that the Department of Managed Health Care is suppose to regulate the HMOs and yet instead of addressing the reason why the HMOs are underpaying hospitals and physicians, they are enforcing the ban on balance billing. The DMHC is simply putting a another bandaid on the problems undermining our healthcare system today.
Until the final word come down from the Supreme Court, this new rule should help patients to keep their accounts out of collections and even repair the credit of those who have been affected.