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Anthem's ER Policy: HHS Response Leaves Senator Unsatisfied

By Steven Porter  
   September 16, 2018

A lawmaker behind the 'prudent layperson' standard has been pressing HHS, DOL, and CMS for progress reports on what he deems to be the insurer's 'likely' violations of federal law.

U.S. Sen. Ben Cardin, D-Maryland, isn't entirely satisfied with the response he received late last month from Health and Human Services Secretary Alex Azar regarding Anthem's controversial policy denying payment for emergency department (ED) visits in situations later determined not to be emergencies.

Cardin, who helped enshrine the "prudent layperson" standard into federal law more than two decades ago, cowrote a letter last March with Sen. Claire McCaskill, D-Missouri, alleging that Anthem's policy "likely" violated the statute.

"While we appreciate Anthem on their effort to encourage patients to seek medical care in lower-cost settings, we remain concerned that Anthem's ED policy still forces patients to determine, before they leave their home, if their symptoms are serious enough to go to the emergency room," Cardin and McCaskill wrote.

The letter asked HHS and the Department of Labor to provide a list of documents and answers to questions about Anthem's controversial policy, whether and how HHS and DOL would take enforcement action against the insurer, and any similar complaints against other insurers.

Azar responded with a letter dated August 20 that addressed some, but not all, of the issues Cardin and McCaskill raised.

"The letter is appreciated but does not fully respond to the senators' concerns," a Cardin spokesperson tells HealthLeaders, adding that Cardin's staff members will monitor the lawsuits pending against Anthem and continue reaching out to the Centers for Medicare & Medicaid Services.

Related: Patients Will Die From Anthem's Policy Denying ER Payments, Doc Says

In his response on behalf of both departments last month, Azar cited a closed case involving MagnaCare Administrative Services in New York to demonstrate the departments' enforcement activity. A consent judgment against MagnaCare was reached after DOL determined the company had failed to tell participants, before emergency claims were denied, that they could supply additional medical records to demonstrate that the prudent layperson standard had been met, Azar wrote.

"While we cannot comment on any open investigations, HHS has been monitoring State actions on this issue and will work with the States to ensure that appropriate action is taken if necessary," Azar wrote.

Both HHS and DOL agree that Current Procedural Terminology (CPT) codes should not be used as the sole basis to determine whether emergency services were justified, Azar wrote.

Anthem, based in Indianapolis, had already announced last February that it would change its policy by having its staff request additional patient records before denying coverage. But the change hasn't stopped legal challenges this year.

Piedmont Hospital and five of its sibling organizations sued Anthem's Blue Cross Blue Shield of Georgia over the policy in February, as The Atlanta Journal-Constitution reported. Then two physician groups, the American College of Emergency Physicians (ACEP) and the Medical Association of Georgia (MAG) filed their own lawsuit against Anthem in July.

In a filing last week, Anthem asked a federal judge to dismiss ACEP and MAG's lawsuit, arguing that the groups had failed to assert a legal basis for their challenge. Anthem's filing also argued that the insurer's controversial approach is part of a reasonable effort to tamp down costs.

"The use of hospital emergency departments for non-emergency medical conditions has been a growing problem," attorneys for Anthem wrote, offering a few numbers as context:

  • Up to 24% of ED patients are there for "plainly non-emergency conditions," the Anthem attorneys wrote, citing research by Truven Health Analytics.
  • Hospitals have increased charges for ED visits by 113% in the past seven years, increasing costs for private payers, Anthem added, citing the Health Care Cost Institute.
  • The "inflated ED charges" have cost American taxpayers at least $11 billion over a decade through the Medicare program, the Anthem attorneys wrote, citing the Center for Public Integrity.

Anthem's BCBS of Georgia is among several public and private payers exploring ways to cut unnecessary ED spending, the Anthem attorneys argued.

But just because Anthem determines an ED visit was unnecessary doesn't mean the determination will stick. A report released in July by McCaskill found that, on appeal, Anthem overturned 60% of the ED claims it had denied in Missouri from July through November last year.

Steven Porter is an associate content manager and Strategy editor for HealthLeaders, a Simplify Compliance brand.


HHS Secretary Alex Azar responded to concerns raised about Anthem's controversial payment policy for emergency department services.

Both HHS and DOL agree that CPT codes should not be used as the sole basis to determine whether emergency services were justified, Azar says.

Anthem argues that its actions have been made as part of a reasonable response to rising costs.

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