Proposed Rules Would Prohibit ‘Balance Billing’ in California
On Friday, the Department of Managed Health Care issued new draft regulations that aim to ban physicians and hospitals from billing patients for the difference between HMO payments and the physicians' usual rate, the Los Angeles Times reports.
The practice, called "balance billing," involves physicians who work in hospitals that have different contracts with HMOs than the physicians do. The practice primarily affects emergency department doctors, radiologists and anesthesiologists who work at the hospital but are not hospital employees.
Arguing that the HMO payments are inadequate, doctors have sent additional bills to patients indicating the difference between the HMO payment and the usual rate. According to the Times, patients often paid physicians the amount cited in the bill, believing that the amount was their copayment under their health plan.
The draft regulations would prohibit hospitals and hospital-based physicians from billing patients for the cost of emergency department services that should be covered under patients' health plans. A public comment period on the rules ends May 12.
Similarly, bills to control balance billing have repeatedly died amid opposition from providers and insurers, the Times reports.
In 2006, Gov. Arnold Schwarzenegger (R) ordered DMHC to ban the practice. The agency has worked to negotiate a compromise between physicians and insurers over the past two years but failed to find common ground.
The California Medical Association said the new rules could cause physicians to send complete bills to patients who would then have to deal with insurers for reimbursement.
Insurers said the proposed rules would discourage physicians from contracting with HMOs because it would raise the possibility of out-of-network physicians being reimbursed at higher rates than network providers.
Senate President Pro Tempore Don Perata (D-Oakland) has introduced a bill (SB 981) that would ban balanced billing and require HMOs to provide physicians with interim payment and establish a method for resolving disputes.
Delaware and Florida have similar laws, while New Jersey and West Virginia require HMOs to pay physicians' bills (Rau, Los Angeles Times, 4/1).