CA physicians confront insurance industry

Sacramento, CA-Providers are trying to correct a glitch in a California law that effectively allows health plans a loophole to skirt provisions in a prudent layperson statute adopted by the state in 1995.

They're also supporting legislation to hold health plans accountable for refusing to pay emergency physicians their portion of a patient's claim in a timely manner.

"These two pieces of legislation represent a major breakthrough for emergency providers in California," says John Bib, MD, an emergency physician at Cedars-Sinai Medical Center in Los Angeles. Bib is also a former president of the California chapter of the American College Emergency Physicians.

The present prudent layperson standard enforced by the state applies only to health plans that do not have a contract with a provider. It exempts hospitals and physicians who contract with a plan. It also exempt plans chartered under the federal Employee Retirement Income Security Act, which regulates many employer-sponsored health benefits.

In effect, hospitals and physicians that contract with a managed care organization (MCO) aren't protected at all by the standards, Bib says. The assumption is that the contract adequately allows for payment for necessary emergency services, but that isn't necesssarily true, Bib adds.

AB 682, introduced last year by Assemblyman Bill Morrow (R-Oceanside), would delete that exemption and make it a crime for any health plan to violate the 1995 statute.

The second bill, introduced by Sen. Tim Leslie (R-Roseville), attempts to correct alleged abuses inflicted by MCOs in paying emergency physicians for their portion of a patient's claim. Emergency physicians, according to Bib, tend to account for a small portion of the total claim. About 80% of a claim is typically attributable to the hospital for technical expenses.

As a result, payers are slow to pay the physician's professional fee. Sometimes the fee is completely denied, Bib says. Federal law requires that interest accrue whenever an uncontested claim isn't reimbursed in a timely manner.

The measure would give courts authority to impose penalties other than interest payments on health plans that are slow in paying. Penalties would include unspecified fines, court costs, and attorney's fees in addition to the full amount of the claim.