CMA claims proposed rule change will be 'anti-physician'

CMA claims proposed rule change will be 'anti-physician'

So called ''balance billing'' is in the crosshairs of the state regulators

The state is intervening in a long-running conflict between doctors and managed health organizations that has caught patients in the middle.

The Department of Managed Health Care is set to ban the practice of "balance billing" — billing patients for the balance of medical bills not paid by the patients'' HMOs for emergency room visits. These doctors often work in hospitals but do not have contracts with the same HMOs the hospital does.

Rick Martin, deputy director of the DMHC''s financial solvency division, said the issue has been simmering since 2004. In 2006 Gov. Arnold Schwarzenegger issued an executive order telling the DMHC to get the HMO enrollee out of the middle. Martin said his department has received numerous complaints from consumers who have found themselves sent to collections for what their HMOs failed to pay.

The DMHC has spent the past two years trying to negotiate a compromise between physicians and HMOs, and has effectively served as mediators in the dispute.
"We tried to say, when we were young and naïve, that we could find a mutually acceptable resolution to make sure physicians were being paid fairly and on time," DMHC Director Cindy Ehnes told the Los Angeles Times last month "We finally said, ‘We can''t solve this marketplace dispute, but what we can do is our core mission of protecting consumers."
Physician groups have a differing opinion.

Bill Parrish, CEO of the Santa Clara County Medical Association referred questions to SCCMA president-elect Dr. Atul Sheth, who referred questions to current president Dr. Donald Prolo, who declined to comment on the issue.

But the California Medical Association opposes the ban, and threatens that physicians might send entire hospital bills to patients rather than deal with insurers. Francisco Silva, general counsel for the CMA, told Medical News Today that specialists would be less inclined to be on call for emergencies if the regulations are approved.

Doctors argue that the proposed change would do nothing to regulate or obligate HMOs in any manner — failing to address both fair payment of physicians and inadequate physician networks. The proposal is a giveaway to the HMO industry at the expense of physicians and emergency care, according to a May 12 statement issued by California Medical Association.

Privately some doctors accuse the Schwarzenegger administration with stacking state agencies with insurance industry veterans — an industry that politicians on both sides of the aisle are beholden to for campaign contributions.

But the DMHC is determined.

"It''s always been the department''s position that an enrollee should not be balance billed for the services received," Martin said, adding that he has never seen collection efforts "to this magnitude."

Since May 2, about 60 Kaiser health plan members have complained to the state. By comparison, since 2004, 90 consumers have complained about efforts by a hospital or doctor to collect the remainder of a bill.

Kaiser has received thousands of calls from worried members, Dr. Ben Chu, president of Kaiser''s Southern California region, told the Orange County Register in May. Kaiser has started calling members to assure them they are not responsible for the bills.
However, that may not assuage consumers who are receiving collection notices, which Martin says is the reason the DMHC must act, and points to language in the rule change''s "Statement of Reasons."

"This proposed rulemaking action is necessary to prevent the increasing and often irreparable financial harm, medical dangers and legal inequities experienced by enrollees when they are billed by providers of health care services," the statement reads.

In the context of emergency services, health plan enrollees typically are given no choice about which doctor or hospital provides emergency care, according to the DMHC. Health plan enrollees also suffer economic harm from paying bills that their health plans are legally obligated to pay. If they do not pay, they suffer economic harm from provider billing practices that include aggressive collection activities.

"These provider billing practices are particularly egregious in the context of delivering emergency services in light of the fact that the health plans are obligated to pay for the emergency services provided to the enrollees," according to DMHC documents.

Health plans that don''t have a contract with a hospital are required to pay a reasonable rate, said the DMHC''s Martin.

"The question is what is that reasonable value?" Martin said.

The DMHC held public meetings through late May and as part of its statutory obligations, will take the community comments and submit them to the state Office of Administrative Law. If changes to the rule change are ordered, the rule is then put out for another public comment period.

The process will continue until the DMHC has satisfied the hearing requirements of the Office of Administrative Law, but the 800-pound gorilla in the room is getting both sides to agree on "reasonable" payments.

The DMHC wants to enact the rule change by this fall. But with a case pending in the California Supreme Court, don''t count on a speedy resolution.

—By Dennis Taylor

.Dennis Taylor is managing editor of the Healthcare Journal. You can reach him at