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The state medical board was within its authority to reject taking jurisdiction of a couple’s complaint that a group of privately-contracted emergency room physicians engaged in “balance billing,” the California Court of Appeal, First District, Division 4, held September 26 (Leon v. Medical Board of California).

Under balance billing, emergency room physicians under contract— outside of a hospital’s billing system and not covered by insurance—bill patients for the difference between the cost of emergency procedures and the amount a patient’s insurer is willing to pay.

Maria and Rafael Leon claimed that when they visited the emergency room at Watsonville Community Hospital in 2010, the hospital, which normally accepted their Blue Cross/Blue Shield medical insurance, assigned emergency doctors to the couple who were not employed by the hospital and were not covered as providers under their policy.

The doctors, organized under a separate organization called the Watsonville Emergency Medical Group, billed the Leons separately from the hospital, and the couple ended up paying the difference between the bill and what their insurance offered—$532—out of pocket.

The Leons claimed that, after paying the bill, they learned both that the Group’s contract with the hospital requires the doctors to accept the payment offered by their insurer and that California judicial precedent prevents medical groups from collecting the difference between such bills and their insurer’s offer. Believing the doctors had engaged in unprofessional conduct, the Leons sent a letter to the board asking it to investigate and help in settling the matter.

The board declined the case, informing the Leons that it was only authorized to investigate violations of California’s Medical Practice Act and that the Leons’ “complaint is not about medical care and treatment” and thus fell under the jurisdiction of the state’s Department of Managed Health Care. The board explained that it did not have the authority to charge physicians with dishonesty for non-compliance with a private contract.

In response, the Leons filed for a writ of mandamus to compel the board to accept jurisdiction of their complaint, and the case eventually went up to a state court of appeal, which issued a decision September 26.

The appeals court agreed with the board, finding that it was not required to take charge of the Leons’ complaint. In their letters to the board, the Leons claimed that the doctors had violated provisions of the Medical Practice Act that prohibit acts of dishonesty related to the duties of a physician.

However, although the board has authority to investigate complaints of dishonesty, “that does not mean the Board is required to conclude that the allegations in any given complaint establish unprofessional conduct warranting further action,” wrote Justice Jon Streeter.

In their appeal, the Leons argued that the board incorrectly concluded – based on its comments regarding the Department of Managed Health Care—that it had no jurisdiction to investigate their complaint. Despite the board’s statement regarding its authority to investigate complaints of non-compliance with a private contract and that the Leons’ complaint was “not about medical care and treatment,” Justice Streeter wrote that the board’s letters “do not show the Board ultimately concluded it could never investigate whether a physician’s billing practice constituted unprofessional conduct.”

By saying in its letter that it only had authority to take action against individuals in violation of the Medical Practice Act, the board had simply concluded that the medical group’s billing procedures had not violated the act, not that dishonest billing would never be a violation.

“The Board’s letters, taken together, show the Board reviewed the Leons’ complaint, attempted to respond to concerns and requests presented by the Leons, and explained the Board’s judgment that the conduct alleged by the Leons did not constitute dishonesty warranting disciplinary proceedings against the individual physicians involved.”

© 2018 Professional Licensing Report, published by ProForum, a non-profit research group, www.plrnet.org. Reprinted by permission.

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