Calif. High Court Rejects ‘Balance Billing’ by MD’s

(CN) - Emergency room doctors cannot bill HMO patients directly when disputes arise between doctors and HMOs, the California Supreme Court ruled.

Prospect Medical Group sued Northridge Emergency Medical Group and St. John's Emergency Medicine Specialists for "balance billing," the practice of billing a patient when an HMO doesn't pay the entire amount to a non-member hospital.

In California, an HMO is required to pay for its members' emergency care, even when the patient is taken to a non-member hospital.

Prospect claimed that St. John's threatened its patients with collection agencies and legal actions.

"The Knox-Keene Act permits emergency room doctors to sue HMOs directly over billing disputes," Justice Chin ruled. "These provisions strongly suggest that doctors may not bill patients directly when a dispute arises between doctors and HMOs.

"Emergency room doctors must resolve their differences with HMOs and not inject patients into the dispute," Chin added. "Balance billing is not permitted."

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