FOUL PLAY

Insurance company mistreatment

Managing health care costs is a legitimate concern for everyone, but people in potentially life- or health-threatening situations should not be forced to diagnose their own conditions out of fear their health plans will not pay.

The American College of Emergency Physicians (ACEP) advocates for a national "prudent layperson" standard, which would require insurers to base coverage on a patient's symptoms, not a final diagnosis, and eliminate requirements for preauthorization. Since 1993, 32 states and the District of Columbia have adopted emergency care regulations; however, nearly 40 percent of the 126 million people in employer sponsored health plans are in self-funded ERISA health plans that are exempt from those regulations.

The Emergency Medical Treatment and Labor Act (EMTALA) requires health care providers to give emergency care to everyone who needs it, regardless of their ability to pay or insurance status. However, health plans are not required to pay for emergency care, and some have created administrative and financial barriers that can prevent patients from getting the care they need in an emergency.

According to ACEP, insured patients are denied coverage by their managed care plans for legitimate visits to emergency departments, based on their final diagnoses, or because they did not obtain prior authorization. Patients sometimes must follow a cumbersome preauthorization process. This means a patient might have to make several phone calls and experience prolonged waits before obtaining permission from their insurer to go to the emergency department. The decision is made over the phone, not based on an examination, and often using predetermined criteria.

Denial of reimbursement for emergency claims is such a major problem that ACEP put out a paper on “Fighting Managed Care Denials in the Emergency Department.”

The evidence is not just anecdotal. ACEP gives several examples of insurance companies breaking the rules that do exist in trying to avoid paying for emergency care:

• In California, Kaiser Permanente was fined $1.1 million for "systemic problems" with the health plan's emergency care procedures, which resulted in the deaths of three patients. In June 2002, the health plan lost its bid to have the fine overturned.
• In 2001, several patients in Utah sued the Intermountain Health Care insurance plans for regularly denying emergency billings without first reviewing patients' medical record.
• In 2002, PacifiCare of Arizona was fined $125,000 by the state for more than 1,000 violations of state laws governing health plans, including unfairly denying claims for emergency care between 1996 and 1998. PacifiCare agreed to pay the fine without challenging the state's findings.
• In 2002, emergency patients in Ohio were receiving bills because the emergency physicians did not participate in their health plans, even though the hospitals were "in-network."
• In 2001, Blue Cross Blue Shield of Rochester (NY) agreed to pay hospitals for 25,000 emergency department claims it previously denied between 1997 and 2000, worth potentially $1 million.
• In 2001, the state of Colorado fined the Rocky Mountain Health Maintenance Organization $40,000 for improperly handling claims, including those for emergency care.
• In 1999, the state of Florida fined five managed care organizations $200,000 each for denying reimbursement and late payments for emergency department claims.
• Studies in the March 2000 issue of Annals of Emergency Medicine found that managed care plans are not complying with state regulations.
• In 2000, the state of Washington fined Premera $55,000 for discouraging people from seeking emergency care. In 1999, the state fined Qual Med $25,000 for improperly denying emergency claims and ordered the health plan to pay the claims.

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