The California Supreme Court on Thursday barred emergency room doctors from billing insured patients when their health plans refuse to pay. The decision has broad implications for health care consumers, as it provides strong support to patients’ advocates who claim that emergency room doctors and hospitals are putting patients in the middle of the dispute with health maintenance organizations, or HMOs. They say that billing disputes should not affect patients, they must be resolved solely between the emergency room doctors and hospitals, and the HMO.

 

On the other hand, doctors said the decision would encourage greedy HMOs to underpay them and this situation could put emergency rooms in jeopardy. The California Medical Association said the decision would hurt emergency care across the state.

The case focused on the problem of balance billing, a practice that occurs when a patient is treated for an emergency at a hospital that does not have a fee contract with the patient’s HMO. HMOs claim that in such situations doctors often submit inflated charges.

 

State law entitles doctors and hospitals to receive reasonable fees for their services, but doesn't specifically define those amounts. When an insurer refuses to pay the full bill, doctors and hospitals try to collect the money from the patient. In the last two years, more than 1.75 million Californians who received emergency room care were billed by doctors and hospitals for balances, beyond their co-pays, deductibles and the amount paid by their insurance plans, according to information released by the California Association of Health Plans, the trade group that represents the state's HMOs.