Cal Supremes Rule Balance Billing by Emergency Physicians Unconstitutional

All California EP’s now involuntary HMO contract signatories (LA Times):

Winding up in the emergency room is bad enough. But the California Supreme Court ruled Thursday that patients no longer have to worry about getting billed for emergency treatment charges that their HMOs fail to pay.

Health maintenance organizations and patient advocates hailed the decision as an important protection against gouging by hospitals and physicians. But doctors said it would encourage greedy HMOs to underpay them and that that could put emergency rooms in jeopardy.

The decision resolves one part of a contentious debate that has vexed courts, lawmakers and regulators for years. But it leaves open the question of what constitutes reasonable payment for emergency services. Regulations require HMOs to pay hospitals and physicians reasonable fees but do not set out specific amounts.

I’ve been following medical policy for a while, and fortunately HMO penetration of the market is pretty low where I practice.  For all the time I’ve been watching, I’ve never heard that HMO’s pay too much for anything; indeed, they drive a very hard bargain (they aren’t stupid, and they don’t like to part with money).

Because their hard bargains work against the interests of the docs (the ones providing medical care) many times docs would rather not sign a bad deal, and choose to a) bill for the value of their service, and b) put pressure on the HMO through the patient to bargain better.  I’m not in Cal, and don’t know the details of the negotiations they had recently, but apparently when no bargain was struck between the Cal docs and HMO’s under a legislatively-sponsored negotiation, that’s the pretext for this decision.

Docs can sue the HMO for the balance of the bill, which will never happen as the legal fees would vastly outstrip the balance of the individual bill (though I wonder about class-action in this case…I’m not a lawyer, can anyone fill me in?)

Another reason for docs not already practicing in Cal to choose somewhere else.

Update: Shadowfax weighs in, and points out that now insurers have no reason to negotiate with EP’s’ as there’s no leverage to bargain with.


  1. Wait a minute – you guys told us that all we needed to get physicians into a state was some tort reform. Well, no state screws the injured worse than California, and now you’re telling us to avoid it? And you’ve told us that “reform” was the sole reason Texas has new physicians (not the significant population growth, or large number of new hospitals opening), so why wouldn’t California be flooded with them and more waiting to get in? And why would you be discouraging people from going to California when they support you on what you claimed was the most important thing?

    Did you lie to us?

    As for class actions, well, sorry, but those got significantly curtailed in the last tort “reform” craze which you were a part of backing. Hope it works out for you battling your HMO though. You don’t really need lawyers anyway, you physicians are far smarter than they are. You can file your own suits and fight the legal depts of an HMO on your own without any problems.

  2. As a trauma surgeon in California I wonder when “emergency services” will stop. After the ED? After 24 hours? For the duration of any admission arising out of the ED?

  3. Matt:

    Your point is extraneous, irrelevant. And suggesting anyone lied, ridiculous. This isn’t about tort reform, it is about being free to charge a price set by contract, or to avoid a contract and set a price you want based on what you think your time is worth and what it costs to deliver services. You know, like a lawyer would (except doctors can’t bill two different patients for the same ten minutes.)

    I think the “unconstitutional” part is a hoot. This deserves to go to federal court, and I hope the docs have the scratch to take it there.

    What is next, does the California Supreme Court think it can order doctors to work for free? Is there a lawyer that sees an equal protections challenge here? Matt? Bueller?

  4. TheNewGuy says:

    Ah… what would we do without CuriousJD’s delightful drive-by postings?

    Troll on, brother.

  5. Cal Supreme needs to pull up the HMO’s as well alongwith doctors to safeguard the interest of patient and doctors.

  6. “Your point is extraneous, irrelevant.”

    Why? Those were physician claims – not mine. If they were irrelevant, why did you publicize them? You guys claimed that physicians would flood into states with “reform”, and routinely say Texas is a great place to practice because of it. Now you won’t go to the state with the most draconian “reform”? If it’s not lying, what is it?

  7. Marilyn Mann says:

    Point of clarification: the court did not rule that balance billing was unconstitutional. The ruling was based on the court’s reading of the California statutes that govern HMOs, not on the California Constitution. If the state legislature disagrees, it can adopt legislation to permit balance billing.