Executive Order Addresses ED Fees
Gov. Arnold Schwarzenegger (R) on Tuesday signed an executive order to stop emergency department doctors from billing patients for costs not covered by their managed care insurance plans, a practice known as "balance billing," the Sacramento Bee reports (Benson, Sacramento Bee, 7/26).
Balance billing usually occurs when a patient receives emergency services from a provider who does not contract with the patient's insurance company. If the insurer claims the medical bill is too expensive, the patient is charged for the difference between what the ED charges and what the insurer is willing to pay.
The Department of Managed Health Care says balance billing is illegal under a 1975 state law. However, a state appeals court ruled against the state's interpretation of the law, and the issue is now being heard by the state Supreme Court (Thompson, AP/San Diego Union-Tribune, 7/26).
Schwarzenegger's order requires DMHC to "take all steps necessary to protect Californians from balance billing," including:
- Writing regulations to ban the practice;
- Establishing independent panels of medical and insurance experts to settle billing disputes; and
- Working with medical, hospital and insurance groups to suggest a range of rates for services to prevent future disputes (Lin, Los Angeles Times, 7/26).
Jack Lewin, CEO of the California Medical Association, criticized the executive order, saying it does not address the underlying problem of insurance companies having "nearly unilateral power to controls the pricing and reimbursement for health care" (Los Angeles Times, 7/26). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.