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.