Courts Won’t Give Doctors Relief From Unpaid Medical Bills

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Courts Won’t Give Doctors Relief From Unpaid Medical Bills

alth Care by Laurence Darmiento

The California Medical Association has reached the end of the line in its lawsuit against Blue Cross of California, Health Net Inc. and several other managed care plans over unpaid medical bills.

The California Supreme Court declined to hear an appeal of a lower court ruling that found health plans do not have to pay doctors for their unpaid bills when physician management groups or independent practice associations go bankrupt and leave doctors holding the bag..

The doctors filed suit after a spate of failures starting in the late 1990s that, according to the CMA, left thousands of doctors with millions of dollars in unpaid medical bills.

The doctors argued that stingy managed care contracts caused the failures and claimed under state law that health plans had to ensure they were paid after such failures. But the courts haven’t bought the argument, instead siding with insurers, who argued they should not have to pay twice for care.

Doctors will have to write off their past losses, but the CMA is starting an educational campaign informing doctors to get such guarantees written into their new contracts.

“Our thrust now is to tell physicians to be very, very careful about their contracts,” said Dr. John Whitelaw, president of the CMA.

The CMA also is not giving up hope for a broader solution. It has asked the state Department of Managed Health Care to issue regulations that would require payments from insurers after future failures.

Foundation Bankruptcy

The remaining two clinics of the troubled Community Health Foundation have closed but already other health-care providers are inquiring about how they can take over its operations.

The clinics, which once served 65,000 low-income residents, closed after more than a year of controversy about Community Health’s billing practices and allegations of mismanagement that caused it to lose key contracts. The last two clinics closed March 29.

However, now that Community Health has formally filed for bankruptcy, any effort to reopen the clinics will have to go through U.S. Bankruptcy Court, where the clinic operator’s main asset, its headquarters building on Whittier Boulevard, will be auctioned off.

Lien Update

More than ever it appears the state Supreme Court has reason to rule on whether it’s legal for hospitals to put liens on accident awards, even when they already have been paid by health insurers for treating patients.

Mixed lower court rulings are a prime reason for the high court to delve into matters.

Late last month, a Los Angeles appeals court decided to publish (thereby making precedent) a ruling that upheld the liens in a lawsuit brought against Catholic Healthcare West. About the same time, a San Diego appeals court struck down the practice in a case against Scripps Health.

Staff reporter Laurence Darmiento can be reached at (323) 549-5225 ext. 237 or at

[email protected].

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