California EPs Sue State for Underfunding Emergency Care

It's not uncommon to hear of a doctor being sued, but this time around, a group of emergency physicians is taking legal action, and it's no pesky nuisance suit either. They're taking on the state of California.

Five emergency physician groups filed a class-action lawsuit against the California Department of Health Care Services (DHCS) in January, claiming inadequate funding had pushed the emergency care system into a state of crisis, according to documents filed in Los Angeles Superior Court.

Some of the plaintiffs, like Centinela Freeman Emergency Medical Associates in Inglewood, provide emergency care to inner city populations. Others serve rural areas, such as Sutter Emergency Medical Associates, which staffs six EDs in northern and central California. All the groups, including Valley Presbyterian Emergency Medical Associates, Valley Emergency Medical Associates, and Valley Emergency Physicians Medical Group, frequently treat unemployed, uninsured, minority patients - and a high percentage of Medi-Cal recipients.

Unfunded Mandate

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Medi-Cal, the California Medicaid program established in 1966, is at the center of the suit, said Michael Salomon, MD, the secretary and chief medical officer of Sutter Emergency Medical Associates. Because federal and California law require physicians to provide emergency care, he said the laws are tantamount to an unfunded government mandate, a phrase that has echoed through emergency medicine for years without any solutions proposed by government. California's EPs are underreimbursed by the state for caring for [Medi-Cal] patients, he said.

Compensation for a Medi-Cal recipient is typically a maximum of $65, often less than that, no matter how serious the condition, Dr. Salomon said. We lose money every time we see a Medi-Cal patient.

According to the lawsuit, EPs lost more than $100 million in services provided to Medi-Cal patients in 2007. The plaintiffs argue that DHCS violates the Equal Protection Clause of the U.S. Constitution and a section of the California Constitution because EPs are treated in an unlawful and unequal manner compared with nonemergency physicians, who retain the right to choose which patients to treat.

The suit also maintains that the plaintiffs' medical services constitute a property interest because they offer the value of their medical education, professional experience, and actual care rendered. Providing these medical services to Medi-Cal patients without appropriate reimbursement results in a violation of the Fifth Amendment and the California Constitution, which prohibit unlawful takings, according to the suit.

The doctors also allege that DHCS, which receives federal funds for Medi-Cal, has failed to ensure quality of care and equal access to care required by the Medicaid Act. The plaintiffs noted that 85 hospitals and 55 EDs in the state closed over the past 10 years, and that almost two dozen more hospitals in Los Angeles and Orange counties may be forced into bankruptcy or to close their doors, the suit said.

The suit also noted that DHCS has been unjustly enriched at the expense of California's emergency physicians because EPs have not been properly compensated for treating Medi-Cal recipients, and current compensation does not cover the cost of providing medical services. The plaintiffs are asking the court for reimbursement for services provided, with interest.

Though it's easy to get lost in the legal quagmire, the purpose of the suit is clear, said Irv Edwards, MD, the president of Emergent Medical Associates. The five emergency medicine groups are fighting the collapse of California's health system, which they said is inevitable without proper funding of Medi-Cal. The system is at a breaking point, and we're trying to call attention to it, he said.

DHCS cannot comment on specific arguments in the lawsuit, said Anthony Cava, a DCHS spokesperson, in a statement, but he said Gov. Arnold Schwarzenegger's administration has long maintained the need for comprehensive health care reform in California to improve the health care delivery system in ways that would benefit patients and those who are on the front lines in delivering health care, including emergency room physicians.

Courts as Last Resort

The emergency care crisis in California is neither new nor unique. Court documents report Medi-Cal has been out of balance financially for 17 years, and while hospitals may not be shuttering at the same rate in other parts of the nation, diversion, boarding, and underpayment of physicians plague EDs across the country.

So why speak up now? This is something that we've been talking about for a long time. If you feel like you're being treated unfairly in some way, you sit around and grouse about it, and a lot of times, nothing ever gets done, Dr. Salomon said.

But California's EPs found themselves carrying a large part of the public cost of providing a public good, in treating all patients without regard to pay, and the burden had become too much, he said. It's often difficult to get things done in the legislature, for various reasons, he added, and previous cases against insurance companies taught us that sometimes the courts are our best avenue for getting fair compensation.

As a member of the California chapter of the American College of Emergency Physicians since 2001 and having served as its president in 2005 and 2006, Dr. Edwards has advocated for EP rights for most of the decade. There's never really a good time for a lawsuit such as this, he said, but other options had been exhausted. We've tried to speak to legislators for ten years about the need to increase funding. We were forced into this lawsuit as a last resource; it's not really what we wanted.

We don't know if we will win, but we feel compelled to try, Dr. Edwards continued. We believe that we have a duty as physicians to try and preserve the safety net, to preserve access for our patients, and to make sure there will be a new supply of emergency physicians to practice in the state.

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