Monthly Archives: October 2014

Reimbursement of Emergency Room Services and “Triage” Fees

An old health care insurance scheme you would think would have been done away with by now has resurfaced, particularly in the context of Medicaid reimbursements.  Imagine the following scenario: a patient comes into a hospital’s emergency room complaining of chest pains.  This person is seen immediately by emergency physicians to rule out a myocardial infarction or other serious emergency condition.  It turns out that, fortunately, it was not a heart attack and the person is later released.

Further imagine the presenting patient had Medicaid, not commercial insurance.  In many states, affiliates of the same commercial health care insurers act as managed care organizations (MCOs) to administer Medicaid benefits on behalf of states.  They receive capitated payments – a fixed per insured per month fee – which may result in substantial financial incentives to under-reimburse hospitals and other providers so they can receive as much of the capitated fee for themselves.

Years ago, the old health care insurance scheme was to base emergency room reimbursement on the ultimate diagnosis and not on the initial emergency presenting symptoms – despite the substantial set of procedures necessary to rule out the emergency.  Therefore, if a patient arrived with chest pains and the ultimate diagnosis was something of a non-emergent nature, the hospital ER would not be reimbursed for any of the work required to rule out, in our case, a heart attack or other problem.

To fix this problem, courts established and eventually states codified in statutes what is called the “prudent layperson standard.”  Under this objective standard, the basis used to determine up front whether an emergency medical condition exists is when a prudent layperson (who possesses an average knowledge of health and medicine) determines that a medical condition manifests itself by acute symptoms of such severity that the absence of immediate medical attention would be expected to result in placing the health of the patient in serious jeopardy.  The standard looks to the presenting symptoms – in our hypothetical, chest pains – not what might be the ultimate diagnosis.

The “prudent layperson standard” became a requirement in commercial insurance plans and was codified in the Affordable Care Act as well.  But somehow hospital emergency rooms have been facing this serious issue once again, when MCOs who administer Medicaid reimbursements refuse to follow the prudent layperson standard and pay a small “triage” fee instead.

In many parts of the country, emergency rooms treat a substantial number of Medicaid patients.  While it may be true that some of these patients use the emergency room as their primary care source for non-emergency issues, many present with true emergency conditions.  That’s why the prudent layperson standard was established.

What should hospitals do to challenge this practice?

  1. Medicaid has a detailed administrative appeals process.  Make use of it.
  1. Each appeal must be drafted carefully and with great detail, claim by claim.
  1. Should the appeal be denied, you have further options, including litigation.