Main Points

• States need to ensure that health plans provide fair payment for emergency services or patients will suffer.
• Everyone’s access to emergency care is threatened when emergency care is not compensated fairly.
  
• Health plans should pay for emergency services based on usual and customary charges rather than arbitrarily setting rates that are unfair.
• Everyone is only one step away from a medical emergency.
  

Q.     What are the issues surrounding fair payment and balance billing?

• Decreasing reimbursements for emergency care and growing levels of uncompensated care related to caring for millions of uninsured patients have contributed to the closure of hundreds of emergency departments across the country and a lack of emergency resources, which threatens everyone’s access to lifesaving emergency care.   In January 2009, the California Supreme Court ruled that emergency physicians who do not participate with a health plan could not bill HMO patients for the balances of their bills, and lawsuits now are being filed by people who are using the court’s ruling to make physicians pay the money back.  

• In California, without the guarantee of fair reimbursement, there will be an estimated annual net transfer of tens of millions of dollars from the emergency department safety net to highly profitable health plans.

• Hospital emergency departments have a federal mandate to care for everyone who seeks emergency care, regardless of their ability to pay or insurance status. 

• Most health plans (i.e., Medicare, Medicaid, private payer) are not paying fairly for services.  

• Payments for emergency visits declined over an 8-year period (1996 to 2004).  The sharpest declines were in Medicaid reimbursements (Annals of Emergency Medicine, Hsia, 2007). 

• Half of emergency services go uncompensated, according to the Centers for Medicare & Medicaid Services.  

• Emergency physicians provide the most uncompensated care of all physicians. 

• Emergency care represents less than 3 percent of health care expenditures in America.  The total expenditures on health care are $2.1 trillion (McKinsey Global Institute 2007), and the total expenditures on emergency care are $37.5 billion (CDC’s Medical Expenditure Panel Survey 2006). 

Q.     What role do health insurance companies play in the fair payment debate?

• Health plans have recently faced criminal charges for illegal paying practices.

• The New York attorney general’s office launched an investigation into the payment practices of United Health Care, finding rates to be 10 percent to 28 percent less than actual charges.  The probe involved at least 16 large insurers, but United Health Care was at the center because it operates Ingenix, the database used to calculate out-of-network payments. 

• The settlement requires UnitedHealth to pay $50 million to a non-profit organization that will calculate how much doctors and hospitals should be paid in the future.  The health plan also agreed to pay $350 million to settle the class action lawsuits brought by the AMA. 

• The AMA and others are filing separate class-action lawsuits against Aetna Health, Inc. and CIGNA Corporation for "rigging" data to dramatically under-reimburse physicians. The two lawsuits, filed in New Jersey federal court, contend that for more than a decade the two health insurance companies used a corrupt system to underpay physicians for out-of-network medical services and forced patients to pay an excessive portion of the costs.