Spurred by mounting complaints, the state attorney general is warning members of the medical community that if they are billing HMO members directly for services covered by insurance, they are breaking the law.
"Consumers are getting caught in the middle of an ongoing dispute between health-care providers and the HMO industry about delays in payments by HMOs," Maryland Attorney General J. Joseph Curran Jr. said last night. "If you're a member of an HMO and you pay your bills, the HMO should pay its bills."
Mr. Curran's message, to be issued in a statement from his office this morning, comes as the latest comment on a nagging battle between the medical community and health maintenance organizations over who is ultimately liable for medical bills that remain unpaid.
Health maintenance organizations, which typically create medical networks to provide coverage at a set monthly fee, have long touted the claim that their system is virtually paperwork-free for members.
But there is growing evidence that many of the estimated 850,000 HMO members in Maryland are receiving bills for medical services that their insurers have both authorized and agreed to pay for. Under a state law that became effective July 1 last year, that action is illegal, Mr. Curran said.
Examples of the problem abound. The Health Education and Advocacy Unit in the state's Consumer Protection Division, which is part of the office of the attorney general, has received between 50 and 60 calls this year from HMO members who have received the illegal bills. "That's really the tip of an iceberg," Mr. Curran said.
Consider Robert J. Drews, manager of the foreclosure department at Standard Federal Savings Bank in Frederick. With more than 20 years' experience in consumer credit issues, the threat of a collection agency coming after him for more than $20,000 in unpaid medical bills was a particularly onerous prospect.
As a chronic kidney problem worsened into the advanced stages of renal failure last year, Mr. Drews contacted his HMO, received the go-ahead, and began medical treatment. Within months, he was piling up expenses of more than $5,000 a month for dialysis, $400 to $500 a month in doctor bills and more for blood analysis -- all with the approval of his HMO.
About the same time, the 44-year-old father of two also began receiving bills from the hospital, threatening to turn his account over to a collection agency if he did not pay.
What Mr. Drews did not know was that the bills were improper. "I only found out today that I wasn't supposed to be getting notices," he said.
At issue is a much-disputed state law -- contained in Health-General Article Section 19-710 -- that states "individual enrollees and subscribers of health maintenance organizations shall not be liable to any health-care provider for any covered servicesprovided to the enrollee or subscriber."
Some medical providers, including the state's hospital association, have claimed that the law pertains only to those doctors and hospitals which have contracts with the HMOs.
But others, including a circuit judge in Carroll County who ruled against the University of Maryland Medical Systems in April on a similar case, disagree. The law covers all HMO members and all medical providers, they say.
Mr. Curran said the practice of billing HMO members might be a tactic aimed at pressuring the HMOs for quicker payments. "We sense that there is a pattern of some health providers who are either not aware of the 1989 law -- and if so we want to make them aware of it -- or, if they are aware of it, they are disregarding the law," he said.