It’s called balance billing. Usually it happens when an insured patient gets treatment in an emergency room that is not contracted with their health plan. That means the insurer doesn’t pay the doctor’s entire cost. So, the provider will then directly bill the patient for the remaining balance.
But the California Department of Managed Health Care says it’s stopping this practice that can leave consumers with unwarranted debt and ruined credit. DMHC director Cindy Ehnes says the new regulation will help providers and patients.
“What we have said consistently to the provider community is to come to the department if you need our help getting paid on time and for god’s sake take the patient out of the middle of this.”
The Department can fine health plans or hospitals up to $2,500 a day if they don’t stop the practice. Physician advocacy groups argue the regulation is outside of DMHC’s authority and they’re trying to challenge the new rule in court.