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The Buck Stops Here: CA Supreme Court to Rule on Health Plans’ Negligent Delegation of Payment Responsibilities

California ACEP, Lifeline Magazine

October 2016

Published in Lifeline 

By Andrew Selesnick

A disturbing trend has emerged within our health care system that places the financial interests of health plans over not only the livelihoods of physicians, but also the accessibility, affordability and quality of
health care to patients. Rather than bearing the financial risks of providing coverage to their own enrollees, health plans delegate this risk to undercapitalized risk-bearing organizations (”RBOs”), such as medical groups and independent practice associations (“IPAs”) which often cannot cover the costs of
the medical services provided. In California, this issue recently came to a head in a case I argued before the state’s Supreme Court.1 Before the end of this year, the Court will decide whether emergency physicians can sue health insurance companies for negligently delegating payment responsibility to an IPA when the plan knew, or should have known, that the IPA was not financially stable.

 

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