Laws on Balance Billing in California

In recent years, the nation began focusing on patients' health care rights and rights to fair billing. Without a federal law regulating medical billing procedures for non-Medicare providers, many states enacted laws against the use of balance billing by medical providers. In 2009, the California Supreme Court issued an important legal decision in "Prospect Medical Group, Inc. v. Northridge Emergency Medical Group." The California Supreme Court issued a unanimous decision against medical providers who use balance billing practices in an emergency room setting.

California Law

In a legislative effort to protect its residents against deceptive medical billing practices, California enacted legislation prohibiting the use of medical billing by certain medical providers. Emergency room doctors cannot charge their consumers directly for unreimbursed medical expenses; instead, they must seek payment from their insurance companies. In a landmark decision issued in 2009 by the California Supreme Court, the prohibition on balance billing procedures was upheld as part of the Knox-Keene Health Care Service Plan Act of 1975.

Knox-Keene Health Care Service Plan Act of 1975

In the "Prospect" case, the California Supreme Court limited balance billing to emergency room physicians. The Knox-Keene Act, in the California Supreme Court's decision, applies to the use of balance billing methods, and patients who are most detrimentally affected by balance billing procedures are emergency room patients. The Court reasoned that emergency room patients generally have no control over which doctors treat them and which hospitals they are taken to by paramedics.

Often, insurance companies act as "gatekeepers" to protect their customers against balance billing practices by incorporating limitation language in their contracts with participating doctors or "in-network" providers. Typical limiting language includes provisions that state providers will accept their payments as full payment for their billed charges and cannot balance bill their patients.

Limitations

California law does not prohibit doctors from charging their patients for out-of-pocket charges or copayments, and it does not cover elective procedures that are not covered by insurance providers. Additionally, balance billing laws do not apply to out-of-network medical visits, according to an HMO's regulations.

Considerations

Since state laws can frequently change, do not use this information as a substitute for legal advice. Seek advice through an attorney licensed to practice law in your state.