09 January 2009

I'm glad I don't work in California

Because physician income there is about to plummet.

Court Limits Patient Billing for E.R. Care
California's high court ruled that emergency-room patients can no longer be billed by doctors and hospitals for care that isn't fully paid by their health plans.

The court on Thursday struck down a practice known as "balance billing," in which doctors and hospitals seek to collect from patients any amounts that their managed-care plans refuse to pay. Instead, the providers must either absorb the costs themselves, or get the insurance companies to pay.

Balance billing is controversial because patients are sometimes hit with emergency-room bills because they go to the nearest hospital or other medical facility regardless of whether it accepts their insurance. Health-care providers argue that they need some way to guarantee that they can be paid for their services.

In its decision, the California Supreme Court overturned a lower-court ruling and found that billing disputes over emergency medical care must be resolved solely between providers and health plans.

Patients are "hit" with bills! Oh Noes! Isn't that awful that patients might actually have to PAY for services rendered? That's just not American! We need to stop that. Tell you what, here's a reasonable solution, let's just let the insurance companies decide what to pay. They know the cost of care and I'm sure they'll be fair, don'tyouthink?

Gaah.

For those of you who don't run physician practices, this is a disaster in the making. Currently, if an insurer does not want to pay a fair amount for our services, we drop out of their network (go "non-par") and the patient will get a bill for the full charge for their ER visit. That averages about $400. The insurer will pay some random amount, and the patient is responsible for the rest. Patients hate this, so they complain to their employer and insurer, and in most cases the complaints will bring the docs and insurer back to the table to find a common ground. In those cases, the docs will usually allow a discount from their gross charge, anywhere between 10-40% depending on the market clout of the insurer, in return for prompt hassle-free payment.

Now, however, the option of going non-par in California is simply off the table. If that happens, the docs have to accept whatever pittance the insurer pays as full payment. But the doctors can no longer negotiate with insurers either, since they no longer have any credible leverage to demand reasonable payment for their services, so they wind up having to accept whatever pittance the insurer offers.

The result of this is that all commercial payers in CA are going to trend rapidly down to the medicare rate, which is barely at or below costs for most docs. You might as well just go to single payer, since then at least the crappy reimbursement would be slightly offset by the fact that medicare never denies claims, which I am sure the insurers will continue to do. Either way, it's terrible news for physicians. It's particularly bad for ERs, as it is ER docs who generally have the most trouble with this balance billing issue. See, if you are an office doc, and a patient wants to make an appointment, you can check their insurance in advance and if you don't take their insurance, they either get sent elsewhere or have to pay cash. But ER docs have to take all comers; under this ruling they now must either contract with every single insurer out there or run the risk of non-payment as out of network providers.

CalACEP and CalAMA need to be all over this. They need to get themselves some well-connected lobbyists in Sacramento and get some legislation which would restore some balance to the negotiations.

It's a pity that none of the players in this dispute were able or willing to make the case that is is acceptable for patients to bear some financial responsibility for their health care. That's the real underlying problem here -- the entitlement mentality that health care must always be free. It boggles my mind that the Cal Supreme Court agreed with this. Maybe Symtym can explain the reasoning behind the legal decision, but that won't change the fact that it was wrong.

11 comments:

Anonymous said...

Don't know what the first comment is about. But the ban on balanced billing is pure liberalism at it's core.

Bobby Nations said...

Looks like someone went off their meds.

Bobby Nations said...

That was quick. Oh, well, that first comment could have been a lot of fun ;-)

To any ER docs looking to relocate, my state, Tennesee, is a lot more understanding about this sort of thing. Heck, not long ago, our politicians actually addressed a looming entitlement program you might have heard about, TennCare. Acted like adults, they did.

Anonymous said...

It's a pity that none of the players in this dispute were able or willing to make the case that is is acceptable for patients to bear some financial responsibility for their health care. That's the real underlying problem here -- the entitlement mentality that health care must always be free.

If that were really what it's about, that would be one thing. But this isn't about patients who want everything to be free, and who want to go whereever they want instead of where their insurance is accepted. It's about patients who have coverage, go to the correct emergency department for their insurance plan, pay their $250 copay, and then get another bill for $50 on top of that because the ER docs are unhappy with the deals they've made with insurance companies and take it out on the only people left -- the patients who have already paid for their insurance and paid their copay. Which let me tell you, is far from free.

The idea that patients should keep track of not only what hospital they are going to, but which ER docs from which practices are on what shifts and interview them to make sure that the reasonable and customary reimbursement from their insurance is accepted is insane. Especially when this is the *emergency* department. Where at least some people go because they actually have an urgent problem. If you walked into a patient's room and they said 'I have XX insurance; what will you be billing me on top of my copay and what my insurance pays?' Would you know the answer? How can they even know to ask that question when their Evidence of Coverage states that the services they are receiving are covered?

What is being done to docs by insurance companies when it comes to reimbursement (in all areas of practice) is wrong. It is unfair. It is damaging the practice of medicine, and it is detrimental to patient care. But taking that out on the patients with surprise after the fact charges is wrong too.

Aidian said...

My wife barely survived a medical problem that left her in the ICU for more than a week. It started with her getting sick at home -- sick enough that I drove her to the ER, and, as as California residents in a major city, you've got to be pretty sick before you go to an ER.

We didn't drive to the Kaiser facility that's slightly closer to our house because it's not part of our insurance coverage. We went to the hospital that's covered. It was a legit ER visit, not the sort of thing you should wait to see your PCP for. She was admitted. She almost died. We pay a ton of money every month so that when that happens, we don't have to pay another cent.

After all that, a month later I got a bill from a practice I'd never heard of for some portion of her treatment I don't remember (though was no doubt important). It was for like 150 bucks or something -- not a huge deal, but there's no way I would pay it.

I've got to say, after seeing the almost superhuman efforts, skills, and compassion of all the pros that saved her life, I don't bitch nearly as much about our monthly premiums. These people rock.

But I did everything I was supposed to do under our insurance as I understood it -- and I'm pretty good about fine print stuff -- and there's no way short of getting both an M.D. and a law degree that I could prevent or foresee that bill. I ain't paying it, and now apparently I don't have to.

Anonymous said...

If my toilet leaks saturday at 2am and I need a plumber and he charges 500$ do I get away with paying him only 50$

If I blow a tire and the only station around has one for 80$ do I get away with only paying him 8$

Of course not, but this is what insurance companies get to do now.

So cost cutting comes from somewhere. ER's get shittier and shittier. Fewer specialists take call.

You get what you pay for folks. Just wait until Obama and Daschle get their paws into it.

Anonymous said...

If your toilet leaks on Saturday, and you call Plumbers, Inc. and they say that sending a plumber to fix your toilet will cost $50, and you pay that, and then later Joe the Plumber, an employee of Plumber's Inc., thinks that disrupting his Saturday was worth more like $450 and sends you a bill for that amount, should you have to pay it?

Clearly the analogy breaks down since ER docs are not (usually) directly employed by the hospitals. But the ultimate responsibility for ER docs being unhappy with the contracts they've negotiated with insurance companies and hospitals does not lie with patients. It's like Sony being unhappy that Wal*mart won't pay enough for their TVs so they bill everyone who buys a TV $50 two months after they take it home. After all, Sony's got to run a business and what Wal*mart is paying is barely enough to cover the raw materials of the TV.

We do indeed get what we pay for, and isn't it funny - patients are paying more, doctors are earning less, hospitals are closing, and yet insurance (both health and malpractice) and drug companies remain highly profitable. Perhaps the problem is really that what we are paying is not allocated to the things we want to be paying for.

symtym said...

Actually CAL/ACEP and CMA have been all over the Balance Billing issue for years. Good review from CAL/ACEP here: PDF. The only resolution on this issue will be in the courts (my opinion). The California Supreme Court gave a correct opinion, albeit detrimental to me and other EPs in California. Its a situation of two wrongs can't make a right: HMOs refusing to pay physicians and physicians balance billing patients.

Anonymous said...

12:19

It is not an issue of not liking agreements with the insurance companies. In the case of balance billing it is because WE DON'T HAVE AN AGREEMENT WITH THE INSURANCE COMPANY. This is because they either suck or they operate outside of the local area. Should an ER group have agreements with every health plan in the country??

If your insurance sucks and doesn't cover the bill why is that automatically the ER doctors fault? I didn't force you to buy your insurance. The policy holder should also hold their insurance accountable.

Anonymous said...

Love the patient that appreciated the superhuman effort to save his wife's life. Like the Obama team told Blago, "...that's all you get, appreciation..."

Hope patients realize, appreciation won't get you a doc for long. Jeve

cynic said...

Aidian,

how noble you are and what a blessing it is to have a "man" in this world raising our future generations. You give me hope knowing that a team of experts saved your wife's life, yet it is not worth $ 150.00 dollars to you. I know with your expert guidance, your children will grow up to be leaders, I can see it now.

There will come a time when you need help, and it will not be there. Just know, you are part of the problem. I hope that $150.00 gets you far.