American Academy of Emergency Medicine

Studies Show Managed Care Plans Avoiding Emergency Care Payments

Source: American Medical News, March 13, 2000

Managed care companies are avoiding reimbursement for emergency care and continue to deny emergency care claims even in some states that have passed laws requiring them to provide coverage, according to five new studies.

Published in the March issue of the Annals of Emergency Medicine, the studies include:

  • A review in 1998 of computerized billing data from seven Michigan Medicaid managed care plans for reimbursement for treatment of lacerations requiring repair. The study found that payment actually fell at those health plans after passage in 1997 of a state law requiring plans to pay for emergency services whenever a patient's presenting symptoms constituted an "emergency medical condition."

  • A study of emergency care payment denials by two plans at a university hospital that showed that 86% of visits for which payment was denied at one plan and 62% at the other met the prudent layperson standard for emergency care.

  • A review of insurance claims for emergency services at a billing company in Florida. The study showed that after two Florida laws to prevent denial of legitimate emergency claims went into effect in 1996, the number of such denials dropped in 1997; but the plans denied larger claims and increased patient co-payments.

  • A 1998 analysis of the difference between emergency care reimbursement by Medicaid managed care and traditional Medicaid. The study of seven plans at four emergency departments found that managed care paid for the four procedures studied-endotracheal intubation, cardiopulmonary resuscitation, central line placement, and lumbar puncture-less often than traditional Medicaid.

  • A 1996-1997 study at a large urban hospital of patients denied authorization for emergency department care. It found that 83% of patients went to the ED because they believed their problem was an emergency, 63% said they were not aware of the need for preauthorization, and 85% didn't know that their plan could deny payment for an emergency visit. After the denial, 74% of patients were offered alternative care, usually within 24 hours, by their plans. However, 9% were never seen and 11% returned to an emergency department.

Editor's Note: In light of these findings, it's important to note that a number of recent bills, including those sponsored by Congressmen Cardin and Norwood, attempted to encode into law the prudent layperson standard as the operative test in defining a legitimate claim for an ED visit. As of this writing, no such bill has been enacted into law.