Health Insurance Companies Deny Emergency Services Benefits

Several insurance companies are refusing to cover emergency room visits, telling their policy holders/patients that they must pay for emergency services if the insurer deems the ER visit “unnecessary”. This new policy began with Anthem Insurance Company, which decides whether to pay an emergency room bill based on a doctor’s diagnosis — not the reason the patient went to the hospital. Health experts say this new policy will scare patients away from emergency departments – patients who could potentially have a life-threatening condition. Insurance attorneys are filing complaints against such insurers, claiming they violate federal and state law.

Over 100 million Emergency Room (ER) visits in the U.S. every year are costly for both patients and insurers. Anthem has a new policy that can deny claims for ER visits that were later deemed non-emergent, and other insurance companies are expected to follow suit.

However, a wrong self-diagnosis can have severe financial consequences for patients. Say you visit the ER with chest pains and you’re diagnosed with indigestion. Under Anthem’s policy you’ll likely pay the entire bill. An emergency room visit can cost patients thousands of dollars, and charges vary, depending upon the hospital. For instance, a 2013 study funded by the National Institutes of Health found an upper-respiratory infection charge of $740 and a kidney stone $3,437.

Insurers Implementing ER Denial Policy

Anthem, the second-largest insurance company in the country, and its Blue Cross and Blue Shield of Georgia subsidiary has informed its members that if they show up at the emergency room with a problem that later is deemed to have not been an emergency, their claim won't be paid, according to the Los Angeles Times (Jan 2018).

Blue Cross Blue Shield of Georgia, which offers individual insurance plans in 96 of the state's 159 counties, informed its members that non-emergency, or “inappropriate” ER visits will be refused as of July 1, 2017. It defines inappropriate visits as any but those that "a prudent layperson, possessing an average knowledge of medicine and health," would believe needed immediate treatment. But what defines a “prudent layperson” and “average knowledge”?

Prudent Layperson Definition

The above insurers have misinterpreted the definition of “prudent layperson” that was written into the Affordable Care Act to protect patients. It was intended to require that insurers base their claim payments on what an average person would consider an emergency. But this new definition is based on the doctor’s diagnosis after examinations and tests at the Emergency Room, and then the insurer decides after a claim is submitted whether the patient did act prudently.

The insurance company says this policy’s goal is to get healthcare more affordable. Health care experts say it’s all about making more profits for the insurer. Attorneys argue that the insurer’s new policy violates the “prudent layperson standard” guideline.

States Implementing ER Denial Policy

The ER denial policy was first enforced in Kentucky in 2015, followed by Georgia and Missouri--and recently Indiana, New Hampshire, and Ohio. Hospital officials in these states say claim denials for thousands of consumers are piling up, often leaving patients with huge medical bills. Medicaid programs in Indiana and Kentucky are working to implement policies that charge patients more for using the emergency room for care that turns out not to be urgent.

Missouri Since the policy took effect in June 2017, some hospitals have reported 25 ER insurance denials a month, up from zero, says Jonathan Heidt, M.D., president of the Missouri chapter of the American College of Medicine.

Georgia Since July 2017, Anthem has rejected 580 claims—including many that should fall under the company’s exemptions, according to an analysis conducted by the Emergency Department Practice Management Association.

Kentucky There have been at least 1,000 ER claim denials by Anthem, says Ryan Stanton, M.D., a spokesman for the Kentucky chapter of the American College of Emergency Physicians. Kentucky was the first state to implement the policy in 2015.

California A lawsuit has been filed by several California hospitals against insurer Molina Healthcare, claiming the insurer failed and refused to properly reimburse the hospitals for more than $ 1 million in ER services (see more below)

What Symptoms are Deemed Inappropriate and Denied?

A spokesperson for Anthem said the policy wouldn't apply when the patient is 14 or younger, an urgent care clinic isn't located within 15 miles, or the visit occurs on a Sunday or holiday. Minor ailments, such as cold symptoms or a sore throat, would be denied. But symptoms of potentially more serious conditions, such as chest pains, would be covered, even if they turn out to be indigestion.

Studies and Research

A research paper published in JAMA(June 2016) found that six of the 10 top reasons for unnecessary visits, including back, abdominal and chest pain and sore throats and headaches, were also among the top 10 symptoms of real emergencies. Researcher Renee Hsia described the Blue Cross Blue Shield of Georgia rule a "well-intentioned policy with dangerous consequences for patients." Studies have shown that efforts to use financial incentives to reduce healthcare usage often lead patients to cut down on necessary as well as unnecessary care.

A study published in the American Journal of Managed Care found that about a third of ER visits are for non-urgent problems. While health experts agree that ER visits are sometimes unnecessary, “We just don’t think this [ER Denial] is the way to address that,” says Herb Kuhn, CEO of the Missouri Hospital Association.

Two Patients Denied ER Services Vox reports that Brittany Cloyd has an ER bill for $12,596 due to insurance denial. She went to ER after her mother – a nurse—thought her symptoms could be appendicitis. Multiple tests determined she had ovarian cysts. Consumer Reports tells of patient Kimberly Fister-Mesch who woke in the middle of the night and thought she was having a stroke—she was experiencing severe head pain and high blood pressure. A CT scan found she had a serious but treatable inner ear infection; she was given antibiotics and pain killers and sent home. A few weeks later Anthem sent her a bill for $4,300, and said her condition wasn’t serious enough for ER. Instead she should have called the insurer’s 24/7 online doctor service or have gone to her doctor’s office or to an urgent care center.

Hospitals file ER Denial Lawsuit against Molina Health Insurance Company

A lawsuit has been filed by several California hospitals – part of Prime Healthcare, a community-based health system that operates 15 acute care hospitals in CA-- against insurer Molina Healthcare. The lawsuit alleges the insurer failed and refused to properly reimburse the hospitals for more than $ 1 million in out-of-network ER services and care delivered to patients enrolled in Molina’s California Medicaid (Medi-Cal) benefit plans.

Nine hospitals, the plaintiffs, are referred to as the “Prime Hospitals”. According to the lawsuit, Prime Healthcare hospitals provided critical and life-saving ER care to Molina’s beneficiaries with the expectation that Molina would pay for that service as required by CA law.

All nine hospitals have won multiple awards. For instance, Alvarado Hospital is the only hospital in San Diego to receive the Healthgrades Patient Safety Excellence award four years in a row, from 2015-2018. This award is given for superior performance at hospitals that have prevented the occurrence of serious, potentially avoidable complications for patients during hospital stays. Centinela Medical Center is one of “100 top hospitals” in the country and is ranked among the top 5% of hospitals nationally for patient safety.

Molina is subject to the rules and regulations applicable to the Knox-Keene Act and the Medi-Cal program, which is California’s version of Medicaid: a federal and state-funded, state administered health insurance program that provides low or no-cost health care benefits to qualifying low-income Californians. The Medi-Cal program does not directly provide health care services. Instead, it reimburses health care plans and providers for covered services provided to Medi-Cal beneficiaries on a “fee-for-service” basis or “managed care” basis.

This lawsuit involves emergency health care services and care provided by the Prime Hospitals to Molina members enrolled in the insurer’s Medi-Cal benefit plans. Molina is accused, among other things, of violating California Emergency Services Laws; and Violating California Unfair Competition Law. The lawsuit was filed on June 19, 2018 by Baker & Hostetler, LLP, in the Superior Court of California County of Los Angeles, Central District Case No. BC710551

Take Action if your ER Claim is Denied

In 2015, Consumer Reports surveyed over 2,000 adults and determined one-third of people who have a problem with a medical bill, whether claim denial or billing error, don’t take action to resolve it. Most people don’t realize that they have the right to an independent review of coverage denials by their state insurance regulator, but that can take time. If your insurance company has refused to reimburse you for an ER visit, first check your insurance policy. Read “emergency service benefits” coverage to determine what your insurer defines as an emergency and what your plan will and won’t cover. Most insurance policies offer general guidelines as to what constitutes an emergency, and list common conditions like heart attack or stroke but don’t limit policy holders to specific injuries or illnesses.

The claim denial letter from your insurer has a deadline for submitting an appeal. Start by asking ER doctors who treated you and your primary care doctor for a letter stating that your ER visit was necessary. After filing, the insurer has 60 days to make a decision. If you’re denied, you can appeal one more time. At this point, and if you haven’t done so already, you may want to seek legal help.

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Last updated on Jul-10-18