How insurers take advantage of the EMTALA mandate

Emergency care providers (emergency physicians and specialists on-call for the ER) are at a significant disadvantage when it comes to trying to get paid fairly for services rendered to enrollees of commercial health plans.  Most other health care providers are able to: 1) screen prospective patients to make sure they will get paid appropriately for the care, 2) elect not to care for a plan’s enrollees, or participate in a health plan’s network, if the plan has a history of mis-paying or underpaying claims, 3) establish an on-going relationship with their patients, 4) negotiate rates with plans without much pressure from the hospitals they work in, and 5) obtain a promise for payment by the plan, though prior authorization, for scheduled, elective care or procedures.

Emergency care providers (ECPs), by law, must provide emergency care to everyone, regardless of insurance status or ability to pay.  The law is called EMTALA.  ECPs must do this without asking first about insurance status, and care for patients even if the patient’s health plan repeatedly underpays, and they can not seek pre-authorization and guaranteed payment for emergency care services.  These providers must provide care first, and hope and beg for payment later, typically from patients they may never see again, and from plans they may never have even heard of, or are forced to contract with by the hospital where they work.  Well aware of these circumstances, most commercial health plans take advantage of ECPs in a big way using a host of methods to reduce their payments to providers (and enrollees) for emergency care services.

How do plans do this?  Let me count the ways.

  1. Denial of coverage.  Many commercial plans flat out refuse to pay for emergency care because the patient purportedly did not need to go to an ER to get this care.  The plans often do this simply on the basis of the final diagnosis on the claim, without even reviewing the medical record.  Thus, a patient who goes to the ER with chest pain, thinking they may be having a heart attack, but leaving the ER with the diagnosis of heartburn (reflux), may be stuck with having to pay the bill themselves, which makes it much harder for the provider to get paid, and embroils the ECP’s billing company in disputes between the patient and the plan over coverage.
  2. Down-coding.  Plans frequently down-code emergency physician claims before determining the allowed benefit, often without reviewing the medical record first.  Essentially, they are telling the patient that the physician lied about the level of services provided in the ER, and in the explanation of benefits (EOB) the plan often tells the patient that if they receive a bill from the provider for the difference between the provider’s full charge and the plan’s allowable benefit, the patient doesn’t have to pay this bill.  This isn’t usually correct, but it sure makes it difficult for the provider.  Plans down-code ER physician claims even when the provider is contracted with the plan’s network, knowing it will do the provider no good to cancel the contract, because the plan’s enrollees will keep showing up for care anyway.  Some plans and their capitated medical groups routinely down-code every ER physician claim for the care of the sickest, most expensive ER patients, forcing the provider to dispute thousands of underpaid claims in the plan’s inevitably biased dispute process.
  3. Bundling.  Commercial plans often inappropriately bundle an ER physician’s services together to reduce the payment on these claims.  For example, if an ER physician does an ultrasound scan to rule out bleeding in the abdomen or injury to the heart after a car accident, the plan might insist that the ultrasound was a part of the provider’s evaluation and management service (effectively denying payment for the ultrasound exam); even though CPT coding rules say these two services are ‘separately identifiable and payable’, and even though the plan would routinely pay for the emergency physician’s E&M service and pay for the ultrasound, if the ultrasound was performed by a different physician, like a radiologist.
  4. Delayed payment.  Some commercial plans will cut checks to ECPs for ER services, but then delay mailing the checks for two or more weeks.  They use this strategy in order to ‘make money on the float’, but make it look to insurance regulators like they are complying with timely payment rules.
  5. Coercive contracting.  Plans often put pressure on hospitals in their network to coerce their hospital-based physicians and ECPs to accept deeply discounted, below market rates from the plan.  These providers risk losing their jobs at the hospital if they don’t agree to accept these coerced rates.  Federal (Stark) regulations prohibit such arrangements as a form of illegal referral kickback, but enforcement is lax because regulators believe this arrangement keeps consumer’s costs down, and it’s a hard allegation to prove.
  6. Threatening to divert payment.  Plans routinely threaten to send payments to the patient rather than the ECP if the provider refuses to agree to accept deeply discounted rates, knowing that it is more difficult for ECPs to get these payments from the patient.  In California, the Legislature recognized that ECPs were at a particular disadvantage here, and required the plans to pay emergency care providers directly whether they were contracted or not, but that is not true in most other states.
  7. Renting providers to other networks.  Plans often sell a provider’s contracted discount to other plans, which in effect requires the provider to accept the discounted payment rate from plans even though they have no interest in participating in the other plan’s network, and receive no benefit (like volume referrals or marketing) in exchange for giving the discount.
  8. Recoupment.  Some commercial plans will audit a small number of claims from an emergency physician group, using minimally trained auditors, decide that few or none of these handful of claims were supported by the medical record, and then retroactively apply the average ‘overpayment’ to thousands of previously paid claims over several years, demanding that the ER group pay back millions of dollars.  This is called ‘extrapolation’, and it is often being done in a totally unreasonable way
  9. Payment at a ‘triage rate’.  Although this is more common with Medicaid managed care plans, some commercial plans have begun making minimal payments (as low as $15) to the emergency physician when the plan decides, again retroactively and without reviewing the medical record, that the patient did not have a ‘real medical emergency’ and should have been screened in the triage area and sent packing to get their care later by their PCP (assuming they could get a timely appointment).  Thus, regulators will not ding the plan for too frequently denying coverage for ER care, while the plan saves having to pay for the full evaluation and care provided.
  10. Payment adjustment.  Plans sometimes will retroactively decide that they overpaid on a claim, and then subtract the ‘overpaid amount’ from the payments made on subsequent claims for the care of unrelated patients, typically without linking one to the other in their notice of recoupment.  This creates an accounting nightmare for the provider, and complicates the dispute process.

These are just some of the ways that health insurers take advantage of the emergency care provider’s EMTALA mandate.  Unfortunately, this same kind of behavior is also common practice for Medicare and Medicaid managed care plans.  Since ECPs shoulder an inordinate financial burden for taking care of the under- and uninsured patients that many other providers are unwilling to treat, they rely heavily on commercial plan revenues to make up for these losses.  When commercial plans are allowed to freely use these abusive claims payment tactics to underpay emergency care providers, this makes it very difficult for ER groups to recruit and retain qualified emergency physicians to staff our ERs, and for hospitals to provide on-call specialty care to patients in the ER.   As a result, hundreds of ERs across the country have closed; and, increasingly, less well-trained non-physician practitioners are replacing qualified emergency physicians in the ER.  Not long ago, the most sought after residency training for graduating doctors was in the specialty of Emergency Medicine; but that may not be the case any more.

So why do insurance regulators allow this to happen, and routinely ignore complaints from ECPs about this bad behavior?  I think it is because these regulators believe that these tactics keep costs down, and somehow discourage inappropriate use of the ER by enrollees.  In addition, state insurance regulators (and legislators) seem to believe that access to emergency care is a given, regardless of how inappropriately these plans respond to ER claims.  The American College of Emergency Physicians (ACEP) has often advised legislators, regulators, and the news media that emergency physicians will always be there to respond to medical emergencies, 24/7/365; will never go on strike or participate in sick-outs; and will always provide care regardless of a patient’s insurance coverage or ability to pay, come hell or high water.

Perhaps what ACEP ought to be saying is that if health plans are allowed to continue to take advantage of emergency care providers in this way, we may not be able to show up to provide this care.

Myles Riner is an emergency physician who blogs at The Fickle Finger.

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