Proposal would ban some charges to ER patients
The proposal, by the Department of Managed Health Care, is the agency's third attempt in two years to outlaw so-called balance billing, which turns patients into pawns in payment disputes. The earlier proposals were scrubbed after regulators failed to build consensus among various health care parties.
What remains is a stripped-down version that lacks provisions for an independent dispute-resolution process and a method for calculating fair charges for hospital and doctor services.
The San Diego hearing comes about two weeks after several medical centers owned by Prime Healthcare, including Paradise Valley Hospital in National City, sent thousands of collection letters to Kaiser Permanente members. They demanded payment for outstanding emergency room bills.
Prime's hospitals had sued Kaiser, the state's largest health plan, in February. They contended that Kaiser refused to pay for more than $25 million worth of services after concluding that the conditions of some patients didn't constitute true emergencies.
Kaiser officials said as many as 6,000 of their members received the bills from Prime. A Prime spokeswoman said a relatively small number of bills were sent to patients treated at Paradise Valley, but she didn't know the exact figure.
Cindy Ehnes, director of the managed care agency, said Prime's widespread balance billing “put a face” on a practice that receives little public attention despite being controversial.
A final version of the agency's proposal is expected to be published by fall.
Balance billing surfaces most often when emergency room patients receive care outside of their insurance company's network of contracted providers. State law requires health plans to pay fair amounts for emergency room services, but the exact price is often disputed and insurers wind up paying a lower amount than what they are charged.
Some physicians and hospitals offset the reduced payments by sending bills to patients that cover the difference, an amount that can run from as little as $25 to thousands of dollars.
Balance bills average about $300, according to the California Association of Health Plans, a trade group that lobbies for its 40 members.
The practice can leave patients confused and afraid of being reported to collection agencies if they ignore the bills. While some people lodge complaints with their insurers or state regulators, many pay the charges.
Medical providers who engage in balance billing said the practice is intended to pressure insurers to pay for services in full. They also said it's their most effective alternative to taking health plans to court, an expensive option given the huge legal resources that most health plans have.
The managed care agency's latest proposal will give insurance companies a bigger advantage in payment disputes with out-of-network providers, said Dr. Ted Mazer, past president of the San Diego County Medical Society.
“The department is telling the health plans that they can tell the physicians what their services are worth,” he said.
Instead, Mazer said, the agency should require insurers to pay some portion of disputed bills upfront and use historical data to determine what constitutes appropriate charges.
Supporters of the proposed regulations said a ban on balance billing is long overdue.
“What this does is take the first step: saying it is wrong to have patients in the middle,” said Chris Ohman, president and CEO of the California Association of Health Plans. “The health plan industry is committed to the next step, which is designing a process that will be fair to both plans and providers.”
Insurers, doctors and hospitals must resolve their disagreements without involving patients, said Michael Russo of the nonprofit California Public Interest Research Group in Los Angeles.
“It's ridiculous to hold consumers hostage,” he said. “The patients aren't doing anything wrong.”
Keith Darce: (619) 293-1020; keith.darce@uniontrib.com
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