ACEP Presentation to the National Conference of Insurance Legislators

February 27, 2009
Michael Gerardi, MD, FACEP

Distinguished Members of the Committee.

Thank you for allowing me to address you regarding balance billing and its specific impact on patient access to emergency medical care. I am Dr. Michael Gerardi. I am an emergency physician in Morristown, New Jersey and a member of the Board of Directors of the American College of Emergency Physicians. I proudly stand in front of you here representing an association of 27,000 emergency physicians and the 119 million Americans we treat every year in our Emergency Departments.

The emergency department serves a unique role in the U.S. health care system in that it serves as the safety net for the nation. We provide care for victims of accidents, flu epidemics, natural disasters, and attacks. Care is provided 24/7 to those patients who perceive that they, or their family member's, medical condition requires immediate attention. We proudly care for those who have difficulty paying the usual costs for medical treatment. But the safety net is wearing very thin.

Emergency physicians work under some different constraints than most other health care providers. According to the CDC data, 119 million patients a year come to the ED, which is equal to about 40% of the U.S. population. And the proportion has been increasing each year. Federal EMTALA law mandates that every patient coming to the emergency department be seen without regard to insurance status, ability to pay, or whether or not there is a contract with the particular insurer.

When my physician colleagues and our health care team in the Emergency Department care for you, the last thing on our mind is health care insurance or balance billing. When I have on my white coat, my colleagues and I do not worry for one second about what CMS, health plans, or the patient considers our value to be to patients or to society as a whole. When I am about to intubate a child in respiratory failure, or stabilize a trauma victim, or aggressively stop a stroke or heart attack in its deadly tracks - you can rest assure that considerations about fair payment - or any payment at all have no place in our resuscitation rooms. Why is it then that insurance companies can retrospectively and capriciously undervalue my emergency team's role in the health care system by disallowing my ability to send a bill to help cover our expenses?

Knowing that emergency providers will take care of their customers no matter what, some insurers are severely underpaying these providers. As a result, emergency physicians have been forced to bill patients for the balance that insurers won't pay. In various states, we are now seeing insurers push for legislation to eliminate these physicians' rights to balance bill. While it is portrayed as an effort to protect patients, which sounds good to all of us, in reality a ban on balance billing would be a huge benefit to insurers, giving them complete rate-setting authority over emergency physicians. Those physicians would have to accept as payment in full, whatever the insurer felt like paying. The end result will be a massive shift of money from the emergency care system to the insurance company's coffers.

While we could hope that insurers would try to fairly pay for out-of-network emergency care, actual real-world, experience including the recent actions taken by the New York Attorney General would indicate that this is highly unlikely.

We empathize with patients who have been surprised to receive a balance bill for a service their insurance company claims to cover. But the primary reason it happens is that many insurers are not living up to their obligations. The need for balance billing can be eliminated, but only if insurers are required to fairly pay for emergency services provided to their customers.

It would be best for patients not to be surprised by a balance bill for a service their insurance company supposedly covers in full. So what's the answer? Legislation or regulation to coerce emergency physicians to contract with insurers? Or to make such contracting irrelevant, by simply allowing insurers to pay inordinately low reimbursement? Such approaches might appear to have some advantages in the short term. However, they will degrade the already unraveling ED safety net, especially at a time when it will be more severely stressed.

A much better approach is for state personnel, insurers, and emergency medicine providers to develop fair payment methodologies and rates, and to include assurances for all parties that there are reasonable ways to obtain a balanced review of purported violations. We have suggestions on how to write such legislation.

The emergency care system is already facing significant financial difficulties. Demand for emergency care is increasing. There are 800 fewer ED's [source?] than 20 years ago with a 25% increase in the number of patients seeking treatment. Patients are waiting hours to receive care, and ambulances are being diverted away from the nearest hospital because of overcrowded conditions.

The strains that have led to this ED crisis will be further exacerbated if balance billing is simply prohibited without requiring insurers to pay appropriately for emergency care.

Jeffrey Gold, vice president and special council for managed care at the Healthcare Association of New York State, commented on the recent Ingenix database suits by N.Y. Attorney General Andrew Cuomo: "An outright prohibition on balance billing by out-of-network providers without addressing the historically inadequate, and according to Attorney General Cuomo, artificially suppressed usual-and-customary reimbursement rates is not a viable solution."

If the goal is to protect and treat all patients, a goal to which we subscribe, then we must all avoid actions that will further jeopardize patient access to quality emergency care that we have all come to expect. We look forward to helping you solve this crisis.

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