State Supreme Court to Reconsider Noncontracting Physicians' Right to Bill for Emergency Services
[Posted 09/28/06]

The California Supreme Court recently agreed to reconsider the historic Prospect case, which upheld the right of noncontracting physicians to bill patients if an HMO fails to fairly reimburse them for services provided to its enrollees.

In this case, the plaintiff, Prospect Health Service Medical Group (a capitated IPA), argues that when a physician bills and is paid by an HMO or its contracting intermediary, an "implied contract” has been created whereby the physician is prohibited from balance-billing the patient under the Knox-Keene Act.

The plaintiffs argue, in effect, that alone among all health care providers, physicians are always and automatically "contracting providers” when they provide emergency services. The trial and appellate courts in this case rejected that argument.

The plaintiff's brief makes unfounded accusations that physicians' billed charges are "almost always” unreasonable and that physicians use "impermissible strong-arm tactics to force payment of an unreasonable amount.”

"These unsupported allegations of unethical behavior are deplorable,” wrote the defendant emergency medical groups' attorneys in their answer brief, filed last week with the state supreme court.

Although CMA attorneys assisted the medical groups' attorneys in preparing the answer brief, CMA will also file its own "friend of the court” brief, explaining that nowhere in California law are noncontracting physicians required to accept health plans' discounted payment as payment in full and that any attempt to deny noncontracting physicians the right to bill patients for the outstanding balance violates constitutional protections ensuring a "fair and reasonable return.”

Click here for a copy of the defendants' brief.

Contact: CMA's legal information line, 415/882-5144 or legalinfo@cmanet.org.