I found the fastest growth ever of an already huge bureaucracy when I opened the website medi-cal.org and read on its home page that Medi-Cal provides “Health insurance and long-term care to 6.5 million low-income children, their parents, elderly and disabled people in the state.” I dug deeper into the website and found Medi-Cal’s most recent press release stating that it provides services for 7.5 million people.
This was just an eye-opening backdrop to the story of one physician’s battle with Medi-Cal and its claim-processing/payment subcontractor, Electronic Data Systems (EDS). This battle took place some years ago in a North Bay city and county to remain anonymous.
My friend—I’ll call him Dr. J—was a primary care physician. Part of his practice included obstetrics. He delivered a baby for a mother covered by Medi-Cal. He submitted a bill to EDS and was paid $544. But three months later, $544 was deducted, with no explanation, from a payment for different Medi-Cal services.
Dr. J telephoned EDS, which put him on hold for 20 minutes. When he finally reached a representative, he asked, “What’s the problem with this payment?” The explanation came from the Twilight Zone, as follows: The baby was jaundiced and needed one more day in the hospital for treatment; the hospital asked Medi-Cal to approve payment for the mother to also stay in the hospital one more day; Medi-Cal denied this request; the hospital allowed the mother to stay for free; but, said EDS, since there was a denial associated with this hospitalization, all charges related to the hospitalization were denied. Say what? “But this is your denial,” said Dr. J. “You know I performed the service. You didn’t pay out any extra money. This must be a clerical error.” Response: If Dr. J was unhappy with the result, he would need to file an appeal.
Dr. J filed an appeal, which included lots of paperwork. Two months later, EDS responded, “Appeal denied,” with no further explanation.
In response to another call to EDS, Dr. J was told to file a second appeal, requiring even more paperwork than the first. Two months later, EDS responded, “Appeal denied,” with no further explanation.
Dr. J called EDS again and asked to speak with a supervisor, telling her that none of this made sense and must be a clerical error. Fatefully, the supervisor said, “If you don’t like it, sue us.”
So, Dr. J sued EDS in small claims court, asking for $2,000 as his “usual and customary fee” for delivering a baby rather than the $544 allowed by EDS/Medi-Cal. It wasn’t easy, with lengthy forms that required (at that time) a typewriter to complete. He needed to find his old typewriter in his attic to get the job done. Dr. J also needed to find the official agent for service of process for EDS. Eventually, the forms were filed and served, and Dr. J received a court date eight weeks later.
He arrived at court on the appointed date, along with hundreds of other people whose cases were scheduled to be heard. Two hours later, his case was called, and the judge immediately urged Dr. J to confer with the two bureaucrats sent to court by EDS and attempt to settle the case. The bureaucrats offered $544. Dr. J decided he wanted to tell his story to the judge.
Dr. J told his story to the judge, who was incredulous and angry. He gave the bureaucrats a harsh civics lecture and then asked them repeatedly, “Is this true?” The bureaucrats stalled and dodged the question, blaming processing problems on their “audit process.” When the bureaucrats finally answered the “Is this true?” question with a sheepish “yes,” the judge immediately awarded Dr. J his full claim for $2,000.
End of story? Not by a long shot. Dr. J called an attorney friend and asked, “How do I collect?” The friend said, “I don’t know. In my cases, there’s always an attorney on the other side. When I win a judgment I call the other attorney and say, ‘Pay up.’”
Dr. J called an attorney for the medical association and asked, “How do I collect?” In response, the attorney said, “You aren’t done yet. EDS is going to appeal the verdict. They have 30 days to appeal. They don’t want doctors to think that they can sue Medi-Cal and collect ‘usual and customary fees’ instead of the much-lower Medi-Cal reimbursements.”
Sure enough, at 29 days into the 30-day appeal period, EDS filed a Notice of Appeal using a big corporate law firm in San Francisco. A trial date was set in Superior Court. Soon thereafter, an attorney contacted Dr. J and offered to settle for $544.
Dr. J said, “No, I’d rather see what kind of defense EDS offers in court. Let me tell you my story.”
The attorney listened to Dr. J’s story. A day later, he telephoned to say that EDS would pay the full judgment with a condition that Dr. J. not discuss the settlement with anyone. Dr. J agreed but said he had two conditions of his own: He wanted an apology from the specific supervisor who told him, “If you don’t like it, sue us,” and he wanted EDS to provide better training for claims processors in hopes of saving other doctors from Gothic horror stories similar to his own. The agreement was made, conditioned on compliance within 30 days.
Dr. J got his letter of apology, but he didn’t get the money within the 30-day period, thus voiding the “no discuss” agreement. Later, he called the San Francisco attorney, who was astonished and dismayed: “After all this, they didn’t pay you?!” He had a courier bring a check for the full judgment from San Francisco to Dr. J’s office. Later that day, he called to make sure Dr. J had received the check.
It took more than a year for Dr. J to straighten out one small claim to Medi-Cal/EDS for services rendered. Of course, he recognizes it wasn’t a smart financial decision to pursue his claim, given the amount of time it took.
But there was satisfaction in the result—and a bonus. In subsequent dealings with EDS, representatives seemed to know exactly who he was and provided him with surprisingly responsive service.
