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Physician Groups Challenge Detrimental Insurer Emergency Room Payment Policy

“Save the ER for emergencies – or you’ll be responsible for the cost.” This warning was included in a 2017 letter Blue Cross and Blue Shield of Georgia, Inc. (BCBS) sent to its insureds, alerting them to a new policy for reviewing and paying emergency room medical claims. 

Under this policy, BCBS reviews diagnosis codes and medical records to determine if the final diagnosis warranted an ER visit. For example, a patient presenting at a hospital ER with a severe headache and impaired vision may be concerned he is suffering from a stroke; but ER tests and treatments ultimately conclude it was a migraine. Another patient may present with shortness of breath and chest pains, concerned she is having a heart attack; but it is determined in the ER it was a panic attack. BCBS would cover the patient’s care if the patient had truly been suffering a stroke or heart attack, but where it turns out there was no substantial emergency condition, BCBS would unilaterally deem the situation “non-emergent,” and deny payment for the ER treatments.

As a result, the responsibility to pay would be passed to the patient. Many medical providers have voiced concerns about this policy, as it leads to arbitrary denials of medical claims that negatively impact providers and patients and discourages people from seeking emergency care.

Under the Emergency Medical Treatment & Labor Act (EMTALA), hospitals and physicians who staff their emergency departments are required by law to provide stabilizing care for “emergency medical conditions,” without inquiry into the patient’s insurance status or ability to pay. 42 U.S.C. § 1395dd(a)–(b), (e)(1), (h). EMTALA employs a prudent layperson standard that focuses on a patient’s symptoms, rather than his or her ultimate diagnoses, in determining whether an emergency medical condition exists. 45 C.F.R. § 147.138(b)(4)(i).

In July of 2018, the American College of Emergency Physicians (ACEP) and the Medical Association of Georgia filed suit in the Northern District of Georgia, alleging that BCBS’s policy violates the prudent layperson standard and that unilateral and retrospective denials of emergency medical claims harmed their members. The Plaintiffs asserted claims under EMTALA, the Employee Retirement Income Security Act (ERISA), the Affordable Care Act (ACA), and federal and state insurance regulations, and sought injunctive relief.

The Northern District of Georgia dismissed the Plaintiffs’ complaint because it found that the Plaintiffs did not identify any specific emergency claims BCBS denied in violation of the prudent layperson standard (and in fact admitted that BCBS applied the standard in a minority of claims). The court reasoned that EMTALA was enacted to protect indigent patients seeking emergency care and was not intended to apply to reimbursement disputes, nor does EMTALA confer a right of action on private plaintiffs.

As to the ERISA and ACA claims, the court found that the Plaintiffs’ attack on BCBS’s policy did not allege particularized harm to any member physician and sought injunctive and declaratory relief that is outside the scope of the physician/patient assignments of benefits. The court dismissed the claims under federal and state insurance regulations because there was no private right of action, and rejected the injunctive relief claim as unsupported by a viable independent cause of action as the Plaintiffs lacked standing.

On April 20, 2020, the Plaintiffs filed an appeal of the District Court’s decision in the US Court of Appeals for the Eleventh Circuit. Case No. 20-11511. On appeal, the Plaintiffs argued that the District Court erred in concluding that the Plaintiffs lacked derivative standing to sue on behalf of their members’ patients and in concluding that Plaintiffs were required to show individualized harm from BCBS’s policy to demonstrate associational standing. The result in this case will likely have significant implications for providers of emergency services, and for patients seeking emergency care, particularly in light of the COVID-19 public health crisis.

Prior to this case, there were already significant concerns with BCBS’s policy, and others like it. These arbitrary policies deter people from seeking emergency care, in fear of being left with large medical bills. There have been countless reports of unsuspecting patients receiving bills for ER services deemed “non-emergent” by their insurer after the fact. These policies also result in reduced reimbursement for ER services medical providers are legally required to provide, forcing providers to shoulder many of these costs.

The COVID-19 pandemic has only heightened concerns about access to emergency care and ensuring that providers on the front lines receive appropriate reimbursement for providing critical care. As a result of the current health crisis, insurers facing increased pandemic-related costs will likely be looking for even more opportunities to deny or decrease reimbursement for medical services. And people who are already fearful of going to the ER and risking an unwelcome medical bill may be more inclined to forgo seeking such care. This could have damaging public health consequences.

While the ramifications here are serious, providers should take comfort that the Plaintiffs are continuing their fight, and the Eleventh Circuit could reach a different conclusion. The result in this one case will not preclude providers from exploring other strategies, including challenging specific claim denials on an individual basis under ERISA and pursuing state law claims under their contracts with insurers.

In this rapidly changing health care landscape, providers should take special care to carefully craft their contracts with insurers to ensure the broadest possible protections. Providers that are not contracted should ensure that they have robust assignments of benefits with patients. They should also, where possible before providing treatment, endeavor to obtain and carefully document the insurer’s verification of the patient’s coverage and benefits, which could give rise to an implied contract, promissory estoppel, or representation-based claims.

The case is Am. College of Emergency Physicians, et al. v. Blue Cross Blue Shield of Georgia, Inc., et al., Case No. 1:18-cv-03414 (N.D. Ga. Mar. 19, 2020).

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