Prime Healthcare, State Reach Settlement Over ‘Balance Billing’
On Monday, California's Department of Managed Health Care reached a settlement with Prime Healthcare Services over the hospital system's practice of "balance billing," the San Diego Union-Tribune reports.
Balance billing occurs when a health care providerÂ charges an insured patient for the portion of a medical bill that the patient's insurer refuses to pay, often because the patient has obtained out-of-network care. California has prohibited balance billing since 2008 (DarcÃ©, San Diego Union-Tribune, 5/25).
In January 2009, the California Supreme Court also ruled that emergency department physicians cannot bill patients directly for charges that insurers decline to pay (Robertson, Sacramento Business Journal, 5/24).
In 2008, DMHC filed a lawsuit against Prime Healthcare after more than 6,000 Southern California Kaiser Permanente patients received balance bills from Prime Healthcare EDs.
Although the Kaiser patients' health plans covered emergency care, Prime Healthcare indicated that it would turn the patients over to a credit reporting agency if they did not pay the remainder of their bills.
Under the settlement, Prime Healthcare will audit its billing records from the last six years and provide refunds with interest to patients who paid balance bills (Perkes, Orange County Register, 5/24).
Prime Healthcare also will also donate $1.2 million to six community clinics in California.Cindy Ehnes, director of DMHC, said it is unclear how many patients will receive reimbursements or how much Prime Healthcare will need to pay. She said state regulators will pressure the hospital system to deliver the refunds as soon as possible (San Diego Union-Tribune, 5/25). 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.