The state of California has settled a lawsuit with Prime Healthcare Services, a hospital system, over billing patients the balance of the costs for emergency services.
Prime Healthcare settles Calif. lawsuit
As part of the settlement, 12-hospital Prime Healthcare, Ontario, Calif., has agreed to halt the practice of billing plan members the balance of services provided; not pursue collections; provide refunds with interest to patients; and audit its records for the past six years to determine whether enrollees paid the balance of the services billed for emergency care.
The settlement also requires Prime Healthcare to donate $1.2 million to community clinics in the state's neediest areas.
The California Department of Managed Health Care, which oversees HMOs, filed a lawsuit against Prime Healthcare in 2008, after receiving complaints from patients and providers over bills for emergency services. A 2006 executive order signed by Gov. Arnold Schwarzenegger protected consumers from owing the balance of a hospital bill for services rendered in an emergency. In 2009, the California Supreme Court ruled that emergency room doctors could not directly bill patients for the balance of charges that the insurance company did not pay.
“Consumers who purchase health coverage in good faith will know, once and for all, that it will cover them in a medical emergency and they will not fall victim to a crushing medical debt that they legally do not owe,” Cindy Ehnes, director of the California Department of Managed Health Care, said in a statement.
Prime Healthcare said in a statement that although it believes it would have ultimately won the case at trial, it decided to settle to avoid further costs. Prime Healthcare “looks forward to working with the department to ensure that HMOS live up to their legal obligations,” according to the statement.
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