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?
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.