Why Does the Irrational Out-Of-Network Emergency Care Payments System Need a Defined Legislation for Fair Prices- An Insight by Gregory Pimstone

Why Does the Irrational Out-Of-Network Emergency Care Payments System Need a Defined Legislation for Fair Prices- An Insight by Gregory Pimstone


The system for the payment of out-of-network emergency care in California lacks a defined benchmark for determining fair prices in such reimbursement cases. This has resulted in unnecessary litigation between non-contracted health insurance carriers and ER providers in the state. A leading healthcare lawyer is calling for immediate legislation to define a clear-cut benchmark or formula to determine the reasonable value of such services as litigation on the same issue is clogging courts today. 

Gregory Pimstone – how can a well-defined legislature help to reduce litigation?

Gregory Pimstone is a prominent lawyer from Los Angeles and the Head of the healthcare law group at the national law firm Manatt. According to the law, every ER in America is under the obligation to treat an injured person who comes to the hospital even if that hospital does not have a contract with the person’s healthcare insurance plan. The treatment is administered to the person until they are stabilized. 

The payment for the emergency care treatment is done by the healthcare insurance plan of the patient. If the plan has no contract with the hospital, the payment is taken care of by managed plans, and a price will be fixed via a method supervised by the regulator. Under the law, the ER provider is not obliged to accept the amount offered. This leads to disputes regarding fair prices for the emergency care of the non-contracted patient plan in courts of law. 

The courts are burdened with disputes 

There are several cases similar to the above dispute in courts, and ER providers, hospitals, and non-contracted healthcare carriers need to exchange a lot of information electronically. At the same time, a team of expert witnesses is summoned to determine what should be the fair prices of such cases that are tried individually though being judged on the same parameters in most cases. There is a lot of money and time wasted in the process of unnecessary litigation. The system has no clear formula when it comes to determining the reasonable value of emergency care out-of-network services, and sometimes hospitals have to spend millions of dollars on several cases predominantly on the same issue. 

No action by the Legislature to date

Unfortunately, the California Legislature has not stepped in to resolve the issue. A defined benchmark for determining the fair prices in such disputes is the need of the hour. This system serves no purpose and only benefits the attorneys and legal professionals hired for battling disputes. 

He says the Legislature should hear stakeholders’ views on the above matter and pass clear legislation that will define a set formula or a benchmark for determining the reasonable value for out-of-network emergency cases in the state. Courts will also receive clear guidelines when it comes to trying such cases, and justice to both parties to the suit can be attained as well. 

Gregory Pimstoneof Manatt asks what the point of keeping a system that only wastes valuable time, resources, and lots of money is. With legislative intervention, this issue can be resolved, and the litigation in the state will decrease to a large extent successfully.

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