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California's Department of Managed Health Care has proposed rules that would prevent physicians from billing patients for additional charges beyond the costs of in-network care covered by insurance. Typically, billing disputes arise when patients go to in-network hospitals or emergency rooms for treatment but are inadvertently treated by an out-of-network physician who has not accepted the HMO's negotiated price. Physicians, in a process called balanced billing, can then directly bill the patient for the difference between the two fees.

According to the Los Angeles Times the department has been trying to work out a compromise between physician groups and HMOs on the issue for two years, but ultimately has proposed the rules to protect consumers from increased out-of-pocket spending. Under the proposal, consumers would not have to pay for any difference in billing. Instead, physician groups and insurance companies would have to resolve the disputes on their own.