HHS Sued for ER Reimbursement Policy

ACEP claims new rules allow health insurers to arbitrarily set low out-of-network reimbursements for emergency care, putting payment responsibility on patients.

The federal government is being sued over new rules that plaintiffs claim allow health insurance companies to unfairly and arbitrarily set low out-of-network reimbursements for emergency care.

The American College of Emergency Physicians is asking the U.S. District Court in Washington D.C. to overturn a rule adopted by the Department of Health and Human Services which ACEP says violates the government's rulemaking procedures.

The plaintiffs allege that the rule does not meet the standards required by the Affordable Care Act for transparency of data and fair insurance coverage for emergency patients who are "out of network" because of a medical emergency.

"Patients can't choose where and when they will need emergency care and should not be punished financially for having emergencies," ACEP President Jay Kaplan, MD, said in remarks accompanying the suit.

Intelligence Report: Emergency Department Efficiency

ACEP claims that insurance companies have forced providers out of their health plans with low reimbursements that barely cover the cost of care, creating narrow networks that offer scant coverage for emergency care in many parts of the country.

'A History of Data Manipulation'
"Health insurance companies need to be transparent about the data they are using to pay for services provided by out-of-network providers," Kaplan said. "They have a history of data manipulation and not paying for emergency care. They are shifting their responsibility to our patients, and that is just wrong."

"The federal government has done an injustice to emergency patients and emergency physicians by giving carte blanche to insurance companies to pay whatever they want. Historically we know that amounts to as little as possible," he said.

HHS has said that the Affordable Care Act requires that a reasonable amount be paid based on an objective standard when patients receive emergency care from providers who are not in the plan's network. ACEP says the regulation adopted does not hold insurance companies accountable to do what the ACA requires. They also want the federal court to clarify the "usual and customary" standard.

Kaplan says emergency physicians worked with the Centers for Medicare & Medicaid Services for four years to address the out-of-network issue, and were shocked and disappointed when the final rule was published last November.   

'Ridiculously Low Rates of Reimbursement'

ACEP says the final rule allows insurance companies to arbitrarily set their own rates and shift costs to patients. The new rule says "minimum standards of payment are not necessary" in states that have banned balance billing. 

The practical effect of this, ACEP claims, is that insurance companies can set whatever prices they want without regard to the consequences to patients, providers, or the nation's safety net of emergency care.

"Health insurance companies have taken gross advantage of patients and emergency medical providers since the ACA, arbitrarily slashing payments by as much as 70%," Kaplan said.

"They are forcing many providers out of their networks by imposing ridiculously low rates of reimbursement. In addition, health insurance companies are misleading patients by offering so-called 'affordable' premiums for these policies that cover very little because of the narrow networks, high co-pays and astronomical deductibles. It is insurance in name only because there is hardly any real coverage for the patient."