In California if you end up in the emergency room at least you don’t have to worry about the bill since you have health insurance, right? Not so fast. This week a new rule was put in to place prohibiting hospitals from the so called practice of "balance billing". This means that if you end up in the hospital, particularly one outside of your provider network, you could be billed by the hospital for anything your insurance company didn’t pay. This could be thousands and thousands of dollars. This week the California Department of Managed Health Care implemented a new rule banning this practice. You can read the Department’s press release on this issue here.
But, before you head to the emergecny room without concern for the bill, be aware that a group of doctors and hospitals have filed a lawsuit challenging the new rule. They argue that many times the reimbursment rates from the insurance company is far below the amount needed to make a profit. And, since by law an emergency room is obligated to treat every patient regardless of insurance issues, they will lose billions of dollars.
The DMHC argues that the reimbursement issue will be addressed by regulations desgined to address unfair contracts giant health insurance companies are forcing on local medical providers that provide for very low payment rates for medical services.
As if the issue was not confusing enough, the California Supreme Court is set to hear oral aurguments in another case addressing this very issue – Prospect Medical Group v Northridge Emergency Medical Group -on November 5, 2008. You can see the California Supreme Court calendar here.
In a personal injury case this issue can have a huge impact on the settlemement of a case. If the lawyer can’t tell with certainty how much – if anything – the client will owe to the hospital over and above the paid amount, it is impossible to tell the client how much the net settlement will be. This is an area that cries out for judicial and legislative clarity. Hopefully, the result will be fairness to the consumer, and not protection of the profits of giant corporations.