Gasline Newsletter December 2008

Volume 10, No. 7

Letter from the CSA President Michael Champeau, MD, Regarding Balance Billing

Dear CSA Member,

The California Society of Anesthesiologists has, as promised, closely monitored the developments in Sacramento affecting the practice of balance billing those patients with Knox-Keene health service plans (HMOs and a few PPOs) for non-contracted emergency services. The purpose of this letter is to inform you of CSA’s efforts on your behalf.

The Schwarzenegger administration, through its Department of Managed Health Care (DMHC), has made the curtailment of balance billing of these patients a high priority. After a supportive review by the Office of Administrative Law, the DMHC promulgated a regulation, effective October 15, 2008, defining the balance billing of this subset of patients as an “unfair billing pattern.” CSA joined the California Medical Association and several other co-plaintiffs in immediately filing suit in Superior Court in Sacramento to set aside the regulation. Unfortunately, despite our confidence in the legal merits of our case, the trial court judge ruled in favor of DMHC.

As a result, as of October 15 non-contracted physicians cannot balance bill Knox-Keene patients for emergency services (except for applicable co-pays, co-insurance and deductibles) without potentially risking a lawsuit for unfair competition or other adverse, but as yet undetermined, actions. Although the DMHC argued in court that this regulation concerned only the definition of the practice as “unfair” and that enforcement was another issue for another day, it is naïve to assume that DMHC went to the trouble of promulgating a regulation that it had no intention of enforcing.

Given our Governor’s intent to remove patients from the line of fire, the tide of public opinion, a legislature which simply and adamantly wants the problem resolved, and an activist judiciary, we anesthesiologists must now appreciate that a strategy that rests solely upon a “line in the sand” defense of balance billing may no longer be the most effective tactic to achieve fair payment for services rendered. Moreover, in the court of public opinion, balance billing is the sole issue on which we manage to make ourselves less popular than the HMOs. Even if we prevail in the courts on the legality of balance billing (Prospect) and ultimately defeat the DMHC regulation, it seems certain that in the not-too-distant future there will be legislation introduced, likely passed, and quite possibly signed, that will prohibit balance billing for some patients.

The real issue here is, and ought to be, fair payment for services rendered. Balance billing is simply one strategy that has been used, sometimes quite effectively, to exert pressure on the risk-bearing organizations to fulfill their legal obligation to pay for services to their members. Another mechanism to ensure reasonable payment for non-contracted services may now be required. Our judgment is that the CSA and its members are better served by participating in the legislative process to ensure that a fair, fast, and efficient mechanism for reasonable payment for non-contracted services is created.

As a result, the CSA is taking a leading role in the response of the House of Medicine to this problem, as outlined below:

CSA remains a co-plaintiff along with CMA and other specialties in the above-mentioned lawsuit challenging the validity of the DMHC regulation. An appeal is likely and additional litigation on potential enforcement action is under consideration.
CSA has drafted legislation, the “HMO Fair Payment Act,” to establish a fair, fast, and effective process for physicians to contest HMO underpayments for non-contracted emergency services. The draft will be a starting point for CMA’s development of remedial legislation on the issue.
CSA has provided background information to CMA in the ongoing Prospect case, currently awaiting resolution in the California Supreme Court, in which the legality of balance billing is at issue. This critical decision is expected in January. An adverse decision in the Prospect case would render moot an appeal of the case against the DMHC, and instead influence our decision on whether or not to litigate DMHC’s enforcement authority.

The situation remains in a state of great flux with additional changes in status expected in the next few weeks. The CSA is playing an active role within the House of Medicine on both litigation and legislation concerning balance billing, which will take place in 2009 with or without CSA. To protect the interests of its members and their patients, the CSA leadership has chosen to be active participants rather than sit on the sidelines.

Thank you for your attention, and your membership.

—Michael Champeau, MD

CSA Winter Hawaiian Seminar

Beat the winter solstice blahs! Attend the CSA’s Winter Hawaiian Seminar, January 19-23, 2009, at the beautiful Hyatt Maui Resort & Spa. Learn the latest on pain medicine, malignant hyperthermia, preeclampsia/eclampsia, tracheal stenosis and pulmonary stenting, anesthesia for emergency surgery in infants, hypotoxemia during one-lung ventilation, and more.

CSA 2009 Annual Meeting and Clinical Anesthesia Update

Save the date for the CSA 2009 Annual Meeting and Clinical Anesthesia Update: May 15-17, 2009, at the Hyatt Regency Monterey Resort & Spa on the Del Monte Golf Course. There will be an optional Hands-On Ultrasound Workshop at the meeting.

Holiday Greetings from the CSA

Finally, on a personal note, I want to wish all of the members of the CSA the happiest of holiday seasons and the most prosperous of new years. While the news this autumn has been less than cheering, we all need to remember ultimately how fortunate we are to practice the noblest of professions in one of the most beautiful and interesting places on earth. I wish you the very best, and I thank you again for your membership in the CSA.

Michael W. Champeau, M.D.

The California Society of Anesthesiologists (1948 - 2008) celebrates 60 years of dedication to patient safety, compassionate care, and physician advocacy

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