State to Ban Balance Billing Practice

Sacramento, CA – The state government is considering plans to ban physicians and hospitals from billing patients for the cost of services to make up the difference from insurer reimbursements.

Called as consumer abuse by patient advocates, the balance bill practice are the result of a long-standing feud between insurers and healthcare providers, principally emergency room doctors, radiologists and anesthesiologists.

These medical providers do not often have contracts with Health Maintenance Organizations (HMO) that serve the hospitals. Thinking that they receive very low reimbursements, these providers often send additional bills to patients to make up for the difference. Many patients pay the bills, believing that it is the invoice for their co-payment and authorized by their HMO.

Consumer advocates said the practice is illegal and insurers, not the patients, should be legally responsible for reimbursing the providers.

Since 2002, the state government through the Department of Managed Health Care had tried to negotiate for a deal between the insurers and the healthcare providers but failed.

"We tried to say, when we were young and naive, that we could find a mutually acceptable resolution to make sure physicians were being paid fairly and on time," said Cindy Ehnes, the department's director. "We finally said, we can't solve this marketplace dispute, but what we can do is our core mission of protecting consumers."

As a result, the state government has decided to draft regulations against the practice as observed in other eight states.

The draft regulations would prohibit hospitals and hospital-based physicians from billing a patient for the cost of emergency services that are the responsibility of the patient's health plan. The new rules will be approved by the department after a public comment period that ends May 12.