The California Supreme Court ruled on Thursday that emergency room doctors who think a patient's HMO has underpaid them can't bill the patient for the difference and must seek whatever redress they can from the health plan. This a big-money dispute in the medical industry and the unanimous ruling won praise from the consumer groups and state officials, but was of course lamented by the California Medical Association, which said it will hurt emergency care in the state.

They stated that the California emergency rooms are really in bad shape, and the ban on billing patients would shift costs from health maintenance organizations to doctors, some of whom will most probably end their affiliations with emergency rooms. Statistical data shows that more than 21 million Californians are covered by HMOs. This case involves a limited type of fee dispute, over the cost of caring for HMO members who receive emergency care at hospitals that don't have contracts specifying the amount the health plans will pay them.

Unfortunately, state law entitles doctors to receive reasonable fees for their services, and that of course causes frequent disagreements. The amounts in dispute for physicians are usually modest, perhaps $20 to $100 for typical emergency room care and up to $1,000 for surgery. However, statewide, doctors claim underpayments of about $200 million a year, and contested hospital bills are probably higher.

Thursday's ruling should also invalidate bills issued in the last period and unpaid yet. Patients often pay bills sent by hospitals, sometimes under pressure from a collection agency, and can't get their money back under current regulations.

Basically, HMOs routinely underpay hospitals and physicians, but disputing such underpayments is impractical and costly, so they bill patients for the balance, hoping the patients' complaints will prompt the HMO to pay in full. California Gov. Arnold Schwarzenegger praised the ruling because it reaffirms that patients should not be put in the middle of billing disputes between providers and health plans.

How did this case began being considered by the Supreme Court? Well, it stemmed from a dispute between emergency physicians and the Prospect Medical Group, a Southern California physician organization that operates like an HMO. It centered on emergency care rendered to its patients at Saint John's Health Center in Santa Monica and Northridge Hospital Medical Center. Afterwards, in August, after failing to negotiate a compromise between physicians and HMOs, the Department of Managed Health Care issued regulations banning balance billing.

As previously mentioned, many doctors now fear that any loss in income that might result from the ruling could further strain already strapped hospital emergency rooms and discourage specialists from taking emergency cases. It remains to be seen if this was a good decision and if hospitals and insurance companies can find a way to get along with each other.