Denying payment for unnecessary emergency room visits

Just when American healthcare system seems so dysfunctional that it seems impossible to imagine how it could be screwed up further, a decision is made that restores one’s faith in the creativity of Man.  But before you run out of guesses as to which particular decision we’re talking about today, we’ll just blurt it out.  We are referring to a recent decision by Washington State Medicaid to deny payment for emergency room evaluations incurred by its beneficiaries that this public insurance entity decides were, in retrospect, “unnecessary.”  No “three strikes you’re out”, no quibbling over the diagnosis list, no excuses – Medicaid has washed its hands of these people.

We’d previous written about this story, when the folks at Washington Medicaid were just getting warmed up at the end of 2011.  Little did we know we’d be revisiting the issue so soon.  Have the people running the Medicaid program in Washington State gone nuts?

Like nearly all public healthcare insurers, Medicaid in the great state of Washington is rapidly going broke.  The state is faced with a $1.4 billion budget gap in the FY 2011-2013 biennial state budget, and has begun cutting all sorts of benefits to its Medicaid population.  Thus far, these have included elimination of the Basic Health Plan that delivers health care to 35,000 low-income individuals, elimination of routine dental care for persons with developmental disabilities, long-term care clients and pregnant women; increasing the level-of-care requirements for personal care services; elimination of the Adult Day Health program; utilization management for mental health services; and elimination of medical interpreter services and, of course, reductions in payments to clinicians.  But these pale in comparison with the innovation the state has devised in terms of saving on its annual Medicaid emergency room bill.  It’s a program which, as nearly as we can tell, hasn’t yet been tried elsewhere.  Call it “Heads We Win, Tails You Lose”.  Here’s the story from The Seattle Times:

Intent on cutting state budget health-care costs, Medicaid officials say the program will no longer pay for any medically unnecessary emergency-room visits, even when patients or parents have reason to believe they’re having an emergency.

The rules — arguably more drastic than an earlier proposal to limit Medicaid patients to three visits per year for nonemergency conditions — would block payment for ER visits for about 500 different conditions.

They would apply to all adults and children on Medicaid, with no exceptions, such as someone being brought in by ambulance or from a nursing home, or when patients have neurological symptoms or unstable vital signs.

Of course the need for some sort of action to be taken is pretty straightforward: a certain number of Washington Medicaid patients are clearly abusing the system and costing taxpayers millions in the process.

Dr. Jeff Thompson, chief medical officer for Washington’s Medicaid program, said the state is committed to paying for medically necessary care.  But many times, he said, patients go to ERs when they would get better, and less expensive, care in a primary-care ‘medical home.’

‘The ER cannot be the medical home of the 21st century,’ he said. ‘We will not pay for diaper rash treated in the emergency room.’

Currently, there is ‘tremendous overuse and abuse’ of emergency rooms, Thompson said — amounting to at least $21 million a year.

Some patients show up as many as 120 times a year for costs of $20,000 to $25,000, he said, but until now, most ER doctors and hospitals have done little to deter them because the state paid the bills.

‘The ER physicians and hospitals have been abusing their privileges as providers of ER services for years, having the state pay for non-medically necessary services in the ER,’ Thompson said.

‘They have not stepped up as leaders to actually be better stewards of care and safety and the public resources,’ he said.

Under the new rules, ER services not paid by Medicaid wouldn’t be billed to the patient, leaving the doctor or hospital on the hook.

While every reasonable person can agree that it defies logic, reason and good medical sense for any individual to rush to the emergency room for non-urgent or even trivial problems, one simply must treasure the rather unique assertion that emergency room physicians and hospitals are at fault for “abusing their privileges” as providers of services to the poor.  As a rule, public insurance program payment is so poor hospitals and doctors lose money on virtually every Medicaid patient they’re forced to see.  Believe us when we say that any patient showing up in your ER or office every third day is about as welcome as a porcupine in a waterbed warehouse, especially if you’re paying for the privilege of seeing them.  One has to wonder if Dr. Thompson had to rehearse his lines in a mirror to master the art of reciting them without laughing.

For those of you who may not be familiar with the ins and outs of emergency rooms, federal law mandates that each and every person walking into one be seen and evaluated regardless of their ability to pay.  This is a result of the Emergency Medical Treatment and Active Labor Act (EMTALA), which was passed by Congress in 1986.

Simply put, EMTALA says that every hospital that operates an emergency room and accepts federally funded insurance must by law, see, evaluate and, if necessary, treat each and every homo sapiens that walks, crawls or swims into their ER regardless of race, sex, nationality or ability to pay.  If the doctors and hospitals involved lose money in the process that’s just too bad.  If you don’t like it, close your emergency room.  (Coincidentally, this last idea is one that seems to be catching on around the country as a direct result of the less-than-generous payments that publicly funded insurance is paying these days. A 2009 study showed that nearly one in every three emergency rooms in the United States has closed their doors over the past 20 years.)

So here’s the actual logic underlying this new Washington Medicaid initiative:

  1.  ER docs and hospitals are required by federal law to see and evaluate anyone who walks in – at their own expense if necessary.
  2. If a Washington State Medicaid patient walks into the ER with a non-emergency and the doctors and hospitals see them as required by law, Medicaid will refuse to pay on premise that the provider are “abusing the system” and being lousy “stewards of care and safety and the public resources”
  3. Since the doctors and hospitals are abusing the system by simply being there and doing what the federal government has said they must, they should not even be allowed to try to bill the patient directly for the visit.

It may not have occurred to Dr. Thompson and the other folks in charge of this “innovation,” but it seems self-evident that when a person repeatedly goes to an emergency room for problems that are not medically urgent, we are really talking about a social problem rather than a medical one.  Heck, other states have recognized this reality.  Oregon has launched a very useful and cost-effective program that essentially assigns a social worker to each high-cost Medicaid recipient.  A major part of their job is to divert ER-abusing patients away from the emergency room and into keeping their regularly scheduled clinic appointments.  As it turns out, sucking up an hour of social worker time is far less costly – and far more effective in changing behavior – than sucking up an hour of hospital and ER time.  It makes sense once you bother to think about it.  What the new Washington Medicaid program does is simply convert a social problem to an economic one, and then dump it on doctors and hospitals in the private sector.  If this is the best government thinkers can do, we are all in some serious trouble.  Heads should roll as a result of pulling this sort of stunt.  Where’s the Queen of Hearts when you really need her?

However beyond the issue of the people running our healthcare programs are rational, competent, or even looking out for the best interests of taxpayers, there are two other more profound and troubling issues raised by this policy decision.  Issues that affect all of us.

First, is there any limit to what the government may require law-abiding citizens to do without compensation?  EMTALA requires doctors and hospitals to see patients regardless of their ability to pay, but does it free insurers of their obligation to pay for the care of their beneficiaries?  Do all insurers have the right to do this, or just public insurers?  How does requiring free people to work without compensation differ from slavery?  Where are the limits?  Can firemen be required to put out fires regardless of a community’s ability to pay them?  Can police or firemen be required to work without pay on the principle that people’s lives may be in danger?  Or should they only be paid if there really was some real risk to life and limb?

Second, if people – patients in this case – are behaving irresponsibly by, for example, going to an emergency room for diaper rash, why do they have no obligation to bear any financial responsibility for their actions?  If the issue is simply that these patients are poor, why are any financial penalties levied on the poor?  Why are the poor required to pay for parking tickets – an abuse of public space – but not clearly unneeded emergency room visits – an abuse of a private space?  Is the government in the business of protecting its citizens, or merely itself?  Where does the public interest end, and something more akin to abuse of power begin?

We may have already crossed that line.

Doug Perednia is an internal medicine physician and dermatologist who blogs at Road to Hellth.

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