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ER Docs Blasted for Price-Gouging Patients

News  |  By John Commins  
   June 02, 2017

A study finds "massive disparities" and markups that average 340% more than what Medicare pays for a range of emergency medical services. But emergency physicians say the findings are based upon a flawed interpretation of Medicare data and don't tell the whole story.

A sweeping analysis of billing records from more than 12,000 emergency physicians nationwide suggests dramatically inflated and wildly varying charges for services ranging from CT scans to wound suturing.

"There are massive disparities in service costs across emergency rooms and that price gouging is the worst for the most vulnerable populations," says study senior author Martin Makary, MD, MPH, professor of surgery at the Johns Hopkins University School of Medicine, in remarks accompanying the report.

"This study adds to the growing pile of evidence that to address the huge disparities in healthcare, healthcare pricing needs to be fairer and more transparent," he says.

The study, which appeared in the May 30 issue of JAMA Internal Medicine, examined Medicare billing records for 12,337 emergency medicine physicians practicing in nearly 300 hospitals 50 states in 2013 to determine how much emergency departments billed for services compared to the Medicare allowable amount, which is the sum of what Medicare pays, the deductible, and coinsurance that patients pay, and the amount any third party such as the patient pays.

On average, the analysis found that adult patients are charged 340% more than what Medicare pays for a range of services, and that the largest hospitals markups are more likely made to minorities and uninsured patients.

ACEP Cries Foul

The American College of Emergency Physicians disputes the findings on several fronts.

Rebecca Parker, MD, president of ACEP, said that Medicare is not an accurate benchmark for determining "fair market value."

"By defining charges greater than Medicare as "excessive" and a "markup," the authors reveal an inherent bias," Parker said in a media release.

"Medicare does not reflect actual costs and has not kept pace with inflation. Medicare physician payments decreased by nearly 8% in the past 11 years, and Congress further reduced payments to fund other legislation (PAMA and ABLE), as well as continued a 2% reduction under the sequester."

The study found that EDs charged anywhere from one to 12 times ($100-$12,600) more than what Medicare paid for services. On average, emergency physicians had a markup of 340% in excess charges, $4 billion in total versus $898 million in Medicare allowable amounts.

ACEP says "the data do not reflect the reality of uncompensated care and undercompensated care provided by emergency departments, mandated by EMTALA."

"Emergency physicians have the highest rates of non-payment than all other physicians," ACEP says. "For the past 30 years, the Federal EMTALA law has required emergency physicians and hospitals to provide a medical screening to everyone, regardless of ability to pay. No other specialty has this duty. Emergency physicians also are required to charge based on the services provided."

The researchers also looked at billing information for 57,607 internal medicine physicians at 3,669 hospitals in 50 states to determine whether markup differences existed between emergency physicians practicing in a hospital's ED, and internal medicine physicians who see patients at hospitals.

On average, charges were greater when a service was performed by emergency physicians rather than internal medicine physicians, who had an average markup that was two times as high as the Medicare rate.

Parker said that internal medicine is not comparable with emergency medicine because of the significant amounts of uncompensated care and undercompensated care provided by emergency departments, which is mandated by a federal law (EMTALA) that requires hospital emergency departments to care for all patients, regardless of ability to pay.

"Emergency physicians provide more medical care for the poor and uninsured than any other physician," she said.  "Comparing internal medicine with emergency care is basically a meaningless comparison. It would have been better to compare internal medicine with the internal medicine sub-specialties and other subspecialists who can pick and choose who they see."

Wild Variations

The study found wide variations in ED billing, even within the same hospital. Wound closure and CT scans had the highest "within-hospital" variations of between one and 27 times the Medicare rate.

In another example, physician interpretation of an electrocardiogram under the median Medicare allowable rate is $16. EDs charged anywhere from $18 to $317, with a median charge of $95. General internal medicine doctors in hospitals charged an average of $62 for the same service.

Overall, EDs that charged patients the most were more likely to be located in for-profit hospitals in the southeastern and Midwestern U.S., and served higher populations of uninsured, African-American and Hispanic patients, the study found.

Parker said emergency physicians charge everyone the same, based on the services provided. Emergency medicine bill collections are lower than any other specialty, with many emergency physicians collecting less than 20% of what they bill.

"Emergency physicians treat every patient equally based on their need, not finances," Parker said. "Most emergency physicians have no idea what insurance coverage a patient has. They uniformly submit identical charges, per CPT code, to all payers, some internists alter their fee schedule to correspond with the expected payment from the involved payers."

Parker said a greater concern is that some health insurance companies are implementing policies not to cover emergency care.

"We have seen this in Missouri and Texas, and it's a violation of the federal law known as the prudent layperson standard," she said. "These kinds of policies mean that patients experiencing emergencies may not go to the ER because of fear of a bill, and could die as a result. People should never delay seeking emergency care out of fear of the costs, and insurance coverage should be based on a patient's symptoms, not final diagnosis."

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.


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