(by Sean Peter)
The never-ending conflict between insurance carriers, benefits administrators, and hospitals erupted several weeks ago with the announcement of United Healthcare’s mid-2021 emergency room policy revisions. The nation’s leading commercial health insurer by market share stated that as of July1, they would be carefully scrutinizing emergency hospital visits by their insureds to determine if their visits were for a “real” emergency.
The New Policy
UHC officials estimated the new policy would result in denial of coverage for 10% of emergency room visits. 90% of emergency visits would still be covered under the new guidelines.
United Healthcare’s plan to reduce overall ER compensation was quickly and publicly denounced by several hospital organizations. Hospital emergency rooms face major financial headwinds because the Emergency Medical Treatment and Labor Act (EMTALA) requires that anyone coming to an emergency department be stabilized and treated, regardless of their insurance status or ability to pay.
Medicare and the EMTALA are classic examples of the federal government requiring an entity like a State or hospital to do something without providing the money necessary to fulfill that obligation. That’s known as an unfunded mandate.
In order to provide care to everyone who shows up in the ER, emergency physicians, according to one study by the College of Emergency Physicians (ACEP), provide an average of $138,300 of EMTALA-related charity care each year. One third of emergency physicians give more than 30 under-compensated or free hours of EMTALA-related care each week. Physicians in other specialties provide, on average, about six hours a week of care mandated by EMTALA, and on average, annually incur about $25,000 of EMTALA-related bad debt.
UHC’s proposed policy is a direct hit to the thin financial stability of all hospitals. The for-profit hospitals who traditionally operate on slim 8% profit margins, and the majority of hospitals which are nonprofits.
The UHC Response
UHC attempted to justified the new policy, stating that,
“Unnecessary use of the emergency room costs nearly $32 billion annually, driving up healthcare costs for everyone. We are taking steps to make care more affordable, and encouraging people who do not have a healthcare emergency to seek treatment in a more appropriate setting, such as an urgent care center. If one of our members does receive care in an emergency room for a non-emergent issue, like pink eye, we will reimburse the emergency facility according to the member’s benefit plan.”
A June 10, 2021 open letter to United Healthcare’s CEO Brian Thompson from The Federation of American Hospitals, a group of 1,000 hospitals in 46 states, DC, and Puerto Rico; offers the hospital’s point of view.
The FAH letter asks,
“How will a patient in severe pain know whether a situation seems life threatening? And if the patient, out of confusion, determines not to visit an emergency room, how are they expected to address a potentially very serious risk to their health and life? And what if the emergency happens to occur on a weekend, evening, or “after-hours” when an alternative facility or physician office may not be available?”
President and CEO of The American Hospital Association, Rick Pollack, stated that, “Threatening patients with a financial penalty for making the wrong decision could have a chilling effect on seeking emergency care. This is exactly why federal law requires insurers to adhere to the prudent layperson standard, which prohibits insurers from putting up coverage roadblocks to emergency services, such as by determining retroactively whether a service will be covered based on the patient’s final diagnosis.”
It’s Happened Before
Conflicts around insurance carriers, patients and emergency room care happen frequently. In June 2018, ACEP and The Medical Association of Georgia filed a lawsuit when Blue Cross and Anthem instituted a similar policy of retrospectively denying payments and/or reimbursements for emergency department encounters deemed “non-emergent”. The lawsuit claimed the policy would be contradictory to the “prudent layperson” standard of the EMTALA, and that providers and patients alike would be operating in fear that payment by the insurers would be denied.
United Healthcare has agreed to temporarily hold off on implementing their new 2021 emergency room policy, reiterating that even should they declare an ER visit to be non-emergent, if the hospital or health system attests that the patient’s visit met the prudent layperson’s definition of emergency, the claim would typically be processed according to the plan’s emergency benefits.
It appears the stage is being set for an uptick in legal and paperwork battles between hospitals, insurance carriers, and benefits administrators; with troubled patients caught in the crossfire.