11 August 2008

California and Balance Billing

Barring a successful lawsuit, it looks like Republican Governor Schwarzenegger is on the verge of success in his quest to ban balance billing for ER visits in California.

This is a brute-force political tactic by the insurer's lobby to impose de facto price controls on the health care market for ER services. Typically, ER doctors contract with HMOs or insurers in a free-market arrangement to agree on a fixed price for services to ER patients, usually at a substantial discount from the out-of network rate. In these cases, the insurer pays the bulk of the ER doctor's fee, and the patient is only responsible for their co-pay. However, if the HMO does not offer adequate compensation, the ER docs may opt not to contract, becoming "out of network" physicians, and in that case the patient is responsible for the balance of the ER doctor's fee after whatever arbitrary amount the insurer pays.

This makes patients unhappy, and their complaints often spur the HMO and the doctors to come to agreement on terms of reimbursement for services, usually at somewhat better rates for the physicians.

What is going on now is that if the HMOs are successful in outlawing balance billing, physicians will have no recourse but to accept whatever pittance the HMOs offer, and there will be no brake on decreasing reimbursement to ER doctors. Given declining compensation from Medicare and Medicaid, this will put greater and greater economic pressure on ER docs in California. I'm appalled but not surprised that the Republicans in Sacramento are willing to sell out their nominal allies, the physicians, to benefit the insurance industry -- the CA GOP is highly pro-corporate. Kudos to CAMA and CA-ACEP for stepping up to fight these regulations, but I fear the deck is stacked against them.

And I would like to reiterate a warning to all those conservative medbloggers out there who fear universal health care in favor of our current "free market" based system -- there is very little that is free market in health care as it is, and with the insurer's lobby ascendant that will shrink further. Many complain that a single-payer system is equivalent to slavery because it compels physicians' work product while denying them fair payment for their labor. What then is this? Medicare for all would be preferable, in fact, because there would be transparency and accountability (through the ballot box). But if the insurers are allowed to run roughshod over health care providers, they are accountable to nobody and need reveal their business practices to nobody.

If you live and practice in California, or if you live in California and worry about having to visit your understaffed and overcrowded ER, a call to your state legislator might just be in order.

8 comments:

  1. Not saying I agree with this particular legislation, but obviously it's already illegal to bill Medicaideurs and Medicareurs more money than the pittance they pay for an ER visit, so I don't get your argument here. Obviously, with a single-payer plan, doctors would get whatever the govt says they get (like they do w/govt plans now), whether or not it covered costs, unless you want to go about fighting the Feds with every bill.

    Your argument would be a lot better if you didn't bring single payer into it.

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  2. Medicaid and Medicare also do not permit balance billing, it is true. That is a bad thing, I agree. But the point is that when I have a beef with these programs (which I do every damn year when the SGR kicks in), I call up my legislators, schedule F2F meetings with either the representative, senator, or a senior aide, and they have to listen to my bitching. And if I don't like what they do, then a la the AMA and Cornyn, we can work to get new representation.

    Now sometimes this approach is effective (SGR patches) and sometimes it is not (balance billing) but the point is that there is accountability in public funding of health care. Whereas I can't get anyone higher than a mid-level flunky to return my calls from UnitedHealth, Aetna, Cigna, etc. If medicare wants to depress physician reimbursement, we can raise holy hell and maybe do soemthing. But if you hand private payers the ability to unilaterally set rates, there's not a damn thing we can do about it.

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  3. I don't know how to solve health care problems, but here's my question.

    Say I need a physical, just a basic physical. I call a physician's office and they won't tell me how much it costs. (And, the situation's even more difficult if I need some stitches in an urgent care place.)

    I can't get an estimate or doing any sort of price-based comparison shopping.

    But say I go in anyway, and my insurance says the physical is worth $100, and pays that. But the physician's office says that it's actually worth $300 more. (Totally made up numbers.)

    Given that there's no way to get pricing information, how do I as a consumer protect myself against charges that seem outrageous for the exam/treatment, etc.?

    Doctors and hospitals charge uninsured folks WAY more than insured folks for some things. What's to stop them from deciding to balance bill up to that amount?

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  4. ...there is accountability in public funding of health care.

    Um, so you're saying you want single payer/public funding of health care because you want to be able to vote out those who want public funding of health care/no balance billing? That's really goofy logic.

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  5. This bill will annihilate ER and trauma care.

    Any decent specialist will ask him/her-self: Should I expose myself to high liability, little/no income, loss of sleep, disruption of private practice, etc?

    The answer will be to drop out of ER coverage.

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  6. anonymous 10:51
    have you ever actually called an office and asked for a cash price? i'd be shocked if you couldn't get a price for a standard visit quoted easily at the vast majority of offices.

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  7. it is true! I don't think any decent specialist will stay in ER. Why would they-so they can be called in 4 am, perform a 6-7 hour reimplantation surgery (for example) and then not get paid....i don't think so!

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    ReplyDelete