California court: Balance billing sometimes OK

In the Courts. By Bonnie Booth, AMNews correspondent. April 10, 2006.

A California court has ruled that if a physician provides emergency services to a health plan enrollee and the doctor doesn't have a contract with the health plan, the physician can balance bill the patient for the reasonable cost of the services if the health plan doesn't provide adequate reimbursement.

The California Medical Assn., which filed amicus briefs on behalf of the physicians at the trial and the appellate court levels, called the ruling a significant victory for physicians.

A ruling in the other direction would have had "profound quality of care implications," according to the brief the CMA filed. By not allowing doctors to balance bill, the health plan was trying to force noncontracted physicians to accept reimbursement rates physicians have not had the opportunity to negotiate or might already have rejected, the association told the court.

"Empowering plans to dictate rates to noncontracting providers destroys any chance of real bargaining and, indeed, eliminates the plans' incentive to maintain contracted networks," the CMA wrote in its brief to the appellate court. "Plans may readily reject good-faith attempts to negotiate fair contracted rates, if they know that in the end their payment levels for noncontracting physicians can remain fairly low and that, because of the Emergency Medical Treatment and Labor Act, noncontracted emergency care providers will have to provide the services regardless of how unreasonable their rates may be."