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Scripps Health Faces Medical Services Billing Class Action

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A class action lawsuit was filed January 26, 2009 in San Diego Superior Court on behalf of a putative class of California emergency medical services patients whom, during the past 4 years, Scripps Health billed for medical services after their HMO's refused to pay the full amount of their emergency medical bills.

The lawsuit alleges that Scripps Health and co-defendant La Jolla Emergency Physicians Medical Group illegally engage in the practice of "balance billing" of their emergency medical services patients. Balance billing occurs when a dispute arises between a medical service provider and HMO over the reasonable value of medical services provided and the HMO refuses to pay the full amount of the bill submitted. Rather than pursuing the HMO, the medical service provider bills the patient for the unpaid amounts in dispute.

California's Health and Safety Code, Section 1317 requires hospitals and other emergency care providers to provide emergency medical care to patients who request it without regard to the patient's ability to pay. The Knox-Keene Health Care Service Plan Act of 1975 (Cal. Health & Safety Code Sections 1340, et seq.), as amended in 1994, (the "Knox-Keene Act") requires HMO's to reimburse emergency health care providers for the emergency service they provide to an HMO's members. California Department of Managed Health Care ("DMHC") regulations require HMO's to pay the reasonable and customary value of the emergency services provided.

On January 8, 2009, the California Supreme Court held that the Knox-Keene Act and these DMHC regulations prohibit an emergency medical provider from balance billing, remarking: "A patient who is a member of an HMO may not be injected into the dispute." Prospect Medical Group, Inc., et al v. Northridge Emergency Medical Group, et al, S142209.

The lawsuit seeks unspecified restitution and/or damages on behalf of a class of California patients illegally billed by Scripps Health and La Jolla Emergency Physicians Medical Group.

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