Calif. Supreme Court says HMOs are on the hook for clients' emergency bills -AND- The End of Obamacare

CAL/AAEM News Service at
Sun Dec 11 13:32:36 PST 2016



November 15, 2016


Calif. Supreme Court says HMOs are on the hook for clients' emergency bills 



mpaign=financedaily> Modern Healthcare



By Erica Teichert


The California Supreme Court on Monday guaranteed that HMOs will pay for
noncontracted emergency services in the state, telling insurers they can't
hide behind third-party contracts to avoid paying ER providers.


Two groups of doctors accused several California insurers of refusing to pay
them for emergency services provided to the HMOs' planholders because the
insurers had delegated the payment responsibility to independent physician
associations, or IPAs. But those IPAs-known as La Vida-were in financial
trouble and failed to pay those emergency bills.


The California justices unanimously ruled that HMOs must ensure their
contracted IPAs are financially sound, and the insurers can't delegate their
payment responsibilities to insolvent groups.


The doctor groups alleged that the insurers-including Anthem Blue Cross,
Aetna and Cigna Healthcare of California-should have known La Vida was in
trouble when it failed to meet the state's solvency rules back in 2007.
Although the doctors repeatedly reached out to the HMOs for help when La
Vida wouldn't pay for the emergency services, the health plans told the
providers to keep submitting their bills to the IPA. La Vida eventually went
bankrupt in 2010.


The health plans claimed that state regulations allowed them to shift their
financial responsibilities to the IPAs, and the providers should have no
recourse to come after them, even if the IPAs were insolvent. But the high
court determined the HMOs were negligent and still had a duty to pay the


"With this decision, the California Supreme Court has championed the notion
that emergency service providers should get paid for their work, and that
HMOs cannot simply absolve themselves of their obligations to these
providers by delegating payment responsibility to third parties," said
Andrew Selesnick, an attorney with Michelman & Robinson who represented one
of the plaintiffs. "As a matter of public policy, we want emergency service
providers to deliver excellent care to all who need it, rather than worrying
about whether payers are financially distressed or insolvent."


The cases had originally been tossed based on the health plans' contentions
that they weren't liable for the payments. The lawsuits will return to the
trial court level for further proceedings.




November 16, 2016


The End of Obamacare 



 <> New England
Journal of Medicine



By Jonathan Oberlander, Ph.D.


Donald Trump's triumph in the 2016 presidential election marks the beginning
of an uncertain and tumultuous chapter in U.S. health policy. In the
election's aftermath, the immediate question is this: Can Republicans make
good on their pledge to repeal Obamacare? The Affordable Care Act (ACA) has
persisted largely thanks to President Barack Obama's protection. With Trump
in the White House and Republicans maintaining House and Senate majorities,
that protection is gone.


Obamacare's vulnerability reflects not only the 2016 election results, but
also its shallow political roots. The ACA has achieved much, including a
large reduction in the uninsured population. Still, it lacks strong public
support and an organized beneficiary lobby, has encountered significant
problems in its implementation, and has been enveloped by an environment of
hyperpartisanship.1 If the ACA were more popular and covered a more
politically sympathetic or influential population, if its insurance
exchanges were operating more successfully and had higher enrollment, and if
Democrats and Republicans were not so ideologically polarized and locked in
a power struggle, then an incoming GOP administration would probably be
talking about reforming rather than dismantling Obamacare.


The Trump administration can do much to undercut the ACA. The insurance
exchanges, buffeted in many states by high premium increases,
sicker-than-expected risk pools, and insurer withdrawals, require
stabilization; simply by doing nothing the GOP could damage them. A Trump
administration could also stop reimbursing insurers for the cost-sharing
reductions they must give low-income Americans with ACA exchange plans - a
move that would severely destabilize insurance marketplaces and lead to
insurers' exiting the exchanges.2 Just as the Obama administration used
executive orders to buttress the law, so the Trump administration could
reverse those orders and take additional actions to weaken it, including
leveraging waivers that enable states to opt out of ACA requirements.


The GOP-led House has already voted to repeal Obamacare dozens of times and
will most likely do so again. The situation in the Senate is more
complicated. The Republican majority of 51 senators is far less than the 60
votes necessary to overcome a filibuster and thereby pass contested
legislation. However, the GOP can use a legislative procedure that requires
only a simple majority - budget reconciliation - to overturn Obamacare's
main coverage provisions.


Republicans face challenges in dismantling the ACA. Procedural limits mean
that reconciliation can be used to repeal many Obamacare provisions but not
the entire law (its insurance market regulations would probably be spared).
Moreover, some of its provisions, such as banning insurers from
discriminating against people with preexisting conditions and allowing
children to stay on their parents' health plan until 26 years of age, are
popular. The GOP could attempt to retain such reforms, which President-elect
Trump has expressed interest in maintaining, while eliminating the mandates
for individuals to obtain and larger employers to offer insurance coverage
or pay penalties, the Cadillac tax on high-cost private plans, and other
measures the GOP opposes. Many ACA policies, though, are interconnected:
without a requirement that individuals either obtain insurance or pay a
penalty, regulations prohibiting insurers from excluding sicker people from
coverage or charging them higher premiums are not viable. Picking and
choosing to keep only the ACA's popular provisions is easier said than done.


Furthermore, more than 20 million Americans have gained insurance coverage
since the ACA's enactment, representing a sizable constituency of
beneficiaries of Medicaid expansion and subsidized marketplace insurance.
Repealing those benefits without adequate replacements would de-insure a
substantial share of the U.S. electorate, inviting a political firestorm.


Therein lies the GOP's chief quandary: talking about repealing the ACA is
much easier than actually repealing and replacing it. The GOP could
reintroduce a repeal bill, vetoed by Obama, that congressional Republicans
passed in 2015 (through budget reconciliation in the Senate) stripping the
ACA's core coverage provisions away.2,3 But with what, if anything, will the
GOP replace Obamacare? Trump's health care platform comprises a handful of
bullet points - including allowing the interstate sale of health insurance,
expanding the use of health savings accounts, and establishing high-risk
pools.4 None of those policies would do anything meaningful to restore the
access to health insurance that repealing the ACA would take away from
millions of Americans. Trump's reform vision remains largely a mystery.


Republicans could build on a June 2016 plan released by House GOP
leadership, led by Speaker Paul Ryan (WI). The plan shares the above
policies with Trump's platform.5 In addition, it calls for replacing the
ACA's insurance subsidies with tax credits. Insurers could not charge higher
premiums to people with preexisting conditions as long as, and only if,
those people maintained continuous coverage. The plan would limit the tax
exclusion for employer-sponsored insurance that has exempted employer
contributions to workers' insurance from taxation. And it would reform the
malpractice system by introducing caps on noneconomic damages.


Yet these policies, too, fall far short of the ACA's insurance protections
and coverage expansion. Under the House GOP plan, more Americans would be
uninsured, more would become underinsured, and more would be subject to
insurer discrimination. Nonetheless, even that proposal is viewed by some
conservatives as an overly ambitious "Obamacare lite."3 There is no
agreed-upon Republican replacement plan; a new health care reform debate
could expose divisions within the GOP and between Congress and Trump. If
Republicans want to replace the ACA, they must resolve issues such as how
ambitious a GOP reform package should be and how to pay for it. Limiting the
tax exclusion for employer insurance could generate considerable funds, but
many Americans will view that change as an unwelcome tax increase and a cut
in their health benefits.


Republicans' drive for repeal thus brings with it considerable political
risks. Americans are profoundly confused about the ACA's benefits, but the
prospect of losing them could prove clarifying. The 32 states, including
some governed by Republicans, that have expanded Medicaid do not want to
have coverage taken from their residents or to lose large federal payments.
Republicans may discover that it is harder to pull the plug on Medicaid
expansion than on the insurance exchanges. Other issues await the GOP, such
as what to do about the ACA's measures slowing down Medicare spending
growth. Ending those policies would substantially worsen the federal budget
deficit. And what becomes of the ACA's payment and delivery reforms, its
expansion of Medicare prescription-drug benefits, and myriad policies
affecting medical care and public health that are embedded in the law?


A host of health system stakeholders - hospitals, doctors, insurers, and
others - will be anxious about the current uncertainty in the health policy
landscape and worried about any changes that substantially reduce insurance
coverage and adversely affect their bottom lines. Much of the health care
industry supported the ACA as part of a broader coalition that included
consumer groups. Whether that coalition can reassemble to effectively resist
the ACA's demise is unclear.


Health policy debates could ignite beyond the ACA. Speaker Ryan supports
major changes to Medicare and Medicaid. The new Congress and the Trump
administration could enact large-scale tax cuts that reduce federal revenues
and increase the budget deficit, creating pressures to constrain spending on
government insurance programs. The 2015 House GOP plan called for
transforming Medicare into a modified voucher system, raising Medicare's age
of eligibility, and converting federal Medicaid payments to states into
block grants or per capita allotments. Pursuing those controversial
policies, which would shift more costs onto older and lower-income
Americans, could trigger a backlash. However, Trump may not support Ryan's
Medicare reform plans (though he has voiced support for block granting
Medicaid). The expiration of funding for the Children's Health Insurance
Program also looms in 2017.


The ACA's enactment represented a major step toward making health care a
right in the United States. Now after another landmark election, health care
reform in the United States is headed backward. It is uncertain which parts
of the ACA will survive past 2017 and what will follow it. What is certain
is that Obamacare as we know it will end.




Jeff Wells
Deputy Editor, CAL/AAEM News Service


Brian Potts MD, MBA
Managing Editor, CAL/AAEM News Service

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