Non-Contracted Emergency Care Providers Cannot "Balance Bill" Plan Enrollees
Prospect Medical Group, Inc. v. Northridge Emergency Medical Group, 45 Cal. 4th 497 (2009)
The California Supreme Court was recently faced with the issue of whether emergency care providers that do not have contracts with the health care service plan (the “plan”) can bill the patient for the difference between the bill submitted to the plan and the actual amount received from the plan—a practice known as “balance billing.” In Prospect Medical Group, Inc. v. Northridge Emergency Medical Group, 45 Cal. 4th 497 (2009), the Court held that non-contracted emergency care providers may not engage in balance billing of plan members.
In reaching its holding, the Court first noted the regulatory framework of the Knox-Keene Health Care Service Plan Act (Cal. Health & Safety Code §§ 1340 et seq.) with respect to emergency services. The Court explained that Health & Safety Code Section 1317(d) requires emergency care providers to provide emergency services without first questioning the patient’s ability to pay and requires the patient to either execute an agreement to pay or to provide insurance information after the services are rendered. The Court then examined Section 1371.4 of the Act, which provides, in relevant part, that a “health care service plan shall reimburse providers for emergency services and care provided to its enrollees, until the care results in stabilization of the enrollee.” Under regulations promulgated by the Department of Managed Health Care, the plan has a duty to pay “the reasonable and customary value for the health care services rendered” by an emergency room physician. 28 CCR § 1300.71(a)(3)(B). The often end-result is a dispute between the plan and the emergency care provider over what constitutes the “the reasonable and customary value for the health care services rendered.” In that respect, the Act permits emergency care providers to sue plans directly over billing disputes. See Bell v. Blue Cross of California, 131 Cal. App. 4th 211 (2005).
The Court then examined Section 1379 of the Act, which expressly precludes balance billing by contracted providers and requires such prohibition to be part of every contract between the health care provider and plan. Subsection (b) of Section 1379 further provides that “[i]n the event that the contract [between the plan and the provider] has not been reduced to writing as required by this chapter or that the contract fails to contain the required prohibition [of balance billing], the contracting provider shall not collect or attempt to collect from the subscriber or enrollee sums owed by the plan.” Based upon the statutory duty requiring emergency care providers to provide services, the plan’s corresponding duty to pay providers for emergency services provided to its enrollees, and the emergency care providers right to sue the plan directly over billing disputes, the Court held that there was an implied contract between the plan and emergency care providers that fell within the purview Section 1379(b). As a result, Section 1379(d) prohibits non-contracted emergency room provider from balance billing HMO patients.
See Judicial Opinion Here:
