Health plans are required by law to reimburse any emergency care provider for the reasonable and customary value of emergency services the provider rendered to the plans’ enrollees (Health & Safety Code §1371.4; 28 C.C.R. 1300.71); Health plans are prohibited by law from engaging in ―unfair payment patterns‖ involving unjust payment reductions, claim denials and other unfair practices to be defined by the DMHC (Health & Safety Code §1371.37; 28 C.C.R. 1300.71.37); All Knox-Keene-licensed plans must establish an internal dispute resolution system accessible to non-contracted providers to resolve billing and payment disputes (Health & Safety Code §§1367, 1371.38); Non-contracted providers can sue the health plan (or its delegate) directly over billing disputes (Bell v. Blue Cross of California (2005) 131 Cal.App.4th 121); and The Legislature expressed an intent to ―ensure the best possible health care for the public at the lowest possible cost by transferring the financial risk of health care from patients to providers‖ (Health & Safety Code §1342(d)).

Despite recognizing that, ―[r]eading the language of section 1379 in isolation, it does not readily apply to the precise situation here,‖ the Court held that the ―only reasonable interpretation‖ of the Knox-Keene statutory scheme, read as a whole, ―is that emergency room doctors may not bill patients directly for amounts in dispute,‖ especially ―when the doctors have recourse against the patient’s HMO.‖ The Court explained that providers ―must resolve their differences with HMO’s and not inject patients into the dispute.‖ In sum, the Supreme Court unequivocally held in Prospect that non-contracted providers may not balance bill a patient for emergency services rendered when the patient’s plan fails to pay the provider’s full bill. Providers can seek recourse only against the plan if they feel they have been underpaid.

Prospect is binding precedent on all California state courts and, to the extent applicable, all federal courts deciding questions of California law that are addressed in the Prospect decision.

2. Are there issues related to balance billing that the Supreme Court did not decide in Prospect?

Yes. The Supreme Court recognized that its opinion in Prospect does not reach other issues related to the balance billing controversy, issues that arise due to underpayment by plans for outof-network emergency care services. The Court explicitly noted that a plan does not have ―unfettered discretion to determine unilaterally the amount it will reimburse a noncontracting provider.‖ It elaborated: out-of-network providers ―are entitled to reasonable payments for emergency services rendered to HMO patients. All we are holding is that this entitlement does not further entitle the doctors to bill patients for any amount in dispute.‖ (Emphasis in original.)

The Court also identified existing legal and alternative dispute resolution avenues that theoretically avail providers with recourse for underpayment by plans, but the Prospect decision

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