ER Patients Use Court Ruling to Push for Billing Refunds
CAL/AAEM News Service
calaaem_news at yahoo.com
Thu Feb 12 20:50:24 PST 2009
ER Patients Use Court Ruling to Push for Billing Refunds
By Evan George
Source: Daily Journal
(http://www.dailyjournal.com)
Date: February 11,
2009
LOS ANGELES - Ariel Sabban wants a $57.83 refund for a
medical bill he paid more than a year ago. And he has the attention of the
state's multibillion-dollar hospital industry.
The San Diego man sued Scripps Memorial Hospital and its
emergency physician group last month, claiming they broke the law by billing
him for the difference between what his insurer would pay and the full $521
bill for treating a cut on his son's head.
That controversial business practice, known as "balance
billing," was deemed illegal by regulators and the state Supreme Court in
a January ruling.
Now, health care providers reeling from that decision could
suffer a new financial blow if this and other suits proceed. Hospitals and ER
doctors could be on the hook for hundreds of millions of dollars in collective
refunds to patients they billed several years ago, particularly if plaintiffs'
lawyers file a wave of class actions over the issue. The court opinion last
month left open the question of whether the ban would apply retroactively.
Doctor groups have railed against the lawsuit as unfair and
unwise. But lawyers for Sabban argue he and other emergency room patients
should be refunded all the money they paid under the now-illegal billing
scheme.
"It is not fair for [providers] to keep that money if
they are not lawfully collecting it," said Vincent Slavens, a partner at
Krause Kalfayan Benink and Slavens in San Diego, who represents Sabban.
"Not only will it benefit people who had been charged, but going forward
it will also stop the hospitals from doing this to people in the future."
The proposed class action asks for compensation and some
damages.
A lawyer for Scripps, which has four hospitals in Southern
California, said the chain does not balance bill and that the bill at issue
could be from La Jolla Emergency Physicians Groups, which runs the hospital's
ER.
The case is the second lawsuit in recent months seeking
retroactive refunds due to allegedly unfair billing. An Orange County couple
has sued Mission Hospital, owned by St. Joseph's Health System, claiming
balance billing was at play in overcharging them for services. Attorney Ron
Bochner is representing the couple.
In both cases, the emergency room physicians have also been
sued. That has doctors throughout California nervously watching the cases.
"Everyone is calling and asking," said Elena
Lopez-Gusman, director of governmental affairs for the California chapter of
the American College of Emergency Physicians. "There is a fear that we're
next."
Lopez-Gusman said doctors only billed insured patients when
it was the last way to recoup expenses. "Balance billing was legal,"
Lopez-Gusman said. "To say that [the law] was retroactive is requiring
physicians to have had a crystal ball four years ago."
Many believe forcing doctors to give refunds could further
fray an emergency system already in deep financial trouble. Since 1996, 70
emergency departments have closed statewide, according to the California
Hospital Association.
"Do they want their $50 back or do they want the system
to stay in place?" Lopez-Gusman said.
Many patients with health care coverage might never receive
medical bills directly from a hospital or doctor because health plans contract
with providers to set pay rates. But when no contract exists, a financial tug
of war often ensues.
Emergency care has spurred much of the balance billing in
California because ER doctors are required by law treat all patients,
regardless of their health care coverage or whether a hospital contracts with
that insurer.
Involving the patient in the dispute was outlawed on Oct. 15
when the state's Department of Managed Health Care implemented a new regulation
banning balance billing.
One industry study found as many as 1.7 million insured
Californians were hit by balance billing after visiting an emergency room since
2007. The California Association of Health Plans study reported that the
average bill was $300, for a total of $528 million in extra bills for patients.
Lawyers watching the class actions said they expect to see
more complaints for refunds and damages.
"Certainly the trial bar will be looking at these cases
to see if there's an opportunity there," Francisco Silva, general counsel
for the California Medical Association, said. "We may participate to make
sure that doesn't happen."
Emergency physicians could file cross complaints against the
health plans for the low rates they pay, Silva added.
Indeed, the controversy over sticking insured patients with
the bill stems from the raging, nationwide feud between health providers and
the insurance industry over what medical care should cost. Doctors say they are
routinely stiffed by HMOs that fix reimbursement levels too low. Insurers
meanwhile claim that doctors inflate their bills, driving up the price of
health care.
At the heart of the dispute lies one legal question that
will continue to be fought over: What is "fair and reasonable"
compensation for emergency medical care?
That's a question the California Supreme Court chose not to
answer in its ruling last month. The court found that the state's Health and
Safety Code does not allow balance billing but refused to dictate what health
plans should pay. Prospect Medical Group v. Northridge Emergency Medical Group,
2009 DJDAR 347.
Hospital representatives said they are still grappling with
how to ensure they are paid fully. "Our world turned upside down when the
court ruled, and we're just trying to figure out what it means," said
Dietmar Grellmann, senior vice president of the California Hospital
Association.
Key to the new lawsuits is whether the court ruling applied
retroactively. The Department of Managed Health Care has said its regulation
started Oct. 15. But the Supreme Court ruling was less clear.
"To say 'give them back the money' because there might
have been technical questions about who was supposed to pay is absolutely
wrong," said Andrew Selesnick, a partner at Michelman & Robinson in
Encino.
Selesnick heads the firm's health care office and argued the
Prospect case on behalf of emergency room doctors at the trial court level. He
said he had reviewed both of the recent lawsuits. "I think there are
several questions about the retroactivity of the Prospect decision that courts
are going to have to deal with," Selesnick said.
Other cases, including several brought by California
physicians against Blue Cross and Blue Shield, are wending their way through
the appeals process.
The issue of fair pay is also playing out in federal courts
nationwide. The American Medical Association sued insurers Aetna Inc. and Cigna
Corp. Monday in a New Jersey District Court, claiming that the two health plans
routinely under-reimburse physicians. That follows a massive settlement with
UnitedHealth over its fixing of reimbursements.
Pay rates were not part of the picture as Sabban rushed his
young son to Scripps Memorial Hospital in La Jolla on June 24, 2007. His son
had fallen and cut open his head.
Sabban informed doctors that his son, who was admitted to
the ER, had health insurance with Blue Cross. After surgery, the emergency
department submitted a bill to Blue Cross for $521, according to the complaint.
Blue Cross agreed to pay only $463.71.
Then, on Oct 15, 2007 - exactly one year before California
banned balance billing - Sabban received a bill for the remaining $57.83 with a
letter that said "responsibility for payment is yours." Two months
later, Sabban mailed a check for that $57.83.
Slaven, the lawyer for Sabban, said he sympathized with
doctors who feel they are underpaid by health plans like Blue Cross. But he
said that did not change the law.
"They can pursue their claim against the HMO,"
Slaven said. "They do have recourse. They just don't have the recourse
against the patient."
evan_george at dailyjournal.com
Abid Mogannam &
Brian Potts MD, MBA
Managing Editors, CAL/AAEM News Service
University of California, Irvine
The CAL/AAEM Archives are available at: http://maillists.uci.edu/mailman/public/calaaem/
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