Organized medicine won't back down from the latest assault to physicians--the Schwarzenegger administration's proposed regulations to control billing practices for emergency services. Doctors are fighting back in the legal and legislative arenas. Absent satisfactory resolution, some worry the changes will diminish patients' access to care and boost insurance company power.
The Schwarzenegger administration's efforts to rewrite the rules for emergency services billing may, as one physician puts it, represent the biggest threat to doctors since the malpractice liability crisis of the 1970s.
But the California Medical Association--assisted by county organizations statewide--has leapt into action, launching a multipronged attack on the proposed regulations and a massive fundraising and public awareness campaign. No one is predicting what degree of success organized medicine will ultimately have, because the fight is too new and the issues are too complicated for prognostication.
Nonetheless, the stakes are high. Those in favor of the changes and those opposed are already duking it out.
Points of Contention
After originally stating his intention to have the Department of Managed Health Care enact emergency regulations impacting physicians' ER billing, the governor instead opted for three new--and permanent--regulations.
Perhaps the most onerous regulation, according to CMA leaders, would impact the definition of "fair and reasonable" reimbursement by adding a seventh criterion to the existing six in the Gould case. The new criterion would allow the introduction of "any other relevant documentation necessary to determine reasonable and customary value." What constitutes "other documentation" isn't defined in the proposal, but CMA officials are concerned it will include contract and Medicare rates.
"A clear set of criteria established by a court in responding to the challenge of fairly compensating a physician is now being proposed for alteration with a line that says something like 'and anything else you feel like,'" says Richard Frankenstein, MD, a Garden Grove pulmonologist who is speaker of the CMA House of Delegates. "That is simply unacceptable."
The second proposed regulation would prohibit noncontracted emergency care providers from billing insured patients for amounts their insurers don't pay, also known as balance billing.
"The DMHC is focused on protecting Californians who have made the right choice to participate in health insurance programs," says the DMHC, in a statement to Southern California Physician. "The governor's action fully supports the consumer and tells patients that they will not be billed for emergency care services that they expect will be covered by their insurance. It is also understood that to fully eliminate the potential for balance billing, the underlying problem must be eliminated, which is to better define the reasonable and customary value of services of noncontracted providers."
And the third proposed regulation would set up a voluntary independent dispute resolution process (IDRP) for emergency care bills. The proposed IDRP is similar to what the CMA has been discussing in a workgroup, yet different enough to cause concern. In particular, it's linked to a prohibition on balance billing, which the association won't accept.
Groups Divided About Dispute Resolution
The idea to create an IDRP has been around for years, but differences between the CMA and DMHC approaches are now clear. If the CMA approves a formal IDRP policy at the House of Delegates this month, it would likely recommend starting with a pilot project, which the proposed regulation doesn't allow. Both sides want participation in the IDRP to be voluntary, but the CMA doesn't want it to be tied to a prohibition on noncontracted physicians from billing patients. The DMHC also wants physicians to use an insurance plan's own IDRP first, for a minimum of 45 days. Any CMA policy would likely say noncontracted physicians should not be required to exhaust a plan's internal remedies.
Both sides would require payers to participate in the IDRP. When it comes to arbitration, the DMHC version would allow physicians to submit their original bill amounts or alternative amounts they're willing to accept. If the physician offers an alternative amount, the payer could also offer a different reimbursement amount. In any likely CMA version, the billed and paid amounts would be unalterable figures, to encourage submission and payment of fair bills at the outset. Both say the payment standard should be whatever amount is closest to the reasonable value of services.
The proposed regulations don't set dollar limits for the IDRP, but they allow an independent arbitrator to set them. The CMA would likely want to be sure there are exceptions for smaller claims, but no exceptions for larger claims. Both sides would allow aggregation of claims for similar services.
For supporting documents from the plan, the DMHC wants to see an Explanation of Benefits, a copy of the plan's written determination and a narrative discussion of its final offer that is not inconsistent with the justifications in its written determination. The likely CMA process would require an EOB as well, with a clear description of the specific coding edits used, the reason for the edits, and the specific methodology and data used to calculate the payment level. Absent those data, the physician would receive his or her billed charges.
Both sides want the dispute wrapped up in 60 days. And both sides want decisions to be appealable. An independent organization, subject to DMHC approval, would establish filing fees and a reasonable cost structure under the state's proposal.
