EMTALA and Prudent Layperson Standard FAQ

According to CMS, Congress enacted the Emergency Medical Treatment & Labor Act (EMTALA) in 1986 “to ensure public access to emergency services regardless of ability to pay’. Section 1867 of the Social Security Act imposes specific obligations on Medicare-participating hospitals that offer emergency services to provide a medical screening examination (MSE) when a request is made for examination or treatment for an emergency medical condition (EMC), including active labor, regardless of an individual's ability to pay. Hospitals are then required to provide stabilizing treatment for patients with EMCs. If a hospital is unable to stabilize a patient within its capability, or if the patient requests, an appropriate transfer should be implemented.”

As outlined above, EMTALA obligates Medicare participating hospitals to provide a medical screening examination when a patient presents to the emergency department for examination or treatment for an emergency medical condition (EMC).  Until the medical screening examination is provided, hospitals may not query the patient about insurance or payment.  EMTALA is, basically, an unfunded federal mandate with the greatest responsibility placed on the hospitals and emergency physicians who provide this care shouldering the financial burden of providing EMTALA related medical care whether or not payment is made, according to the EMTALA Fact Sheet prepared by ACEP. 

Some health insurance plans retrospectively deny claims for emergency departments visits, based on a patient's final diagnosis, rather than the presenting symptoms (e.g., when chest pain turns out not to be a heart attack). ACEP advocates for a national prudent layperson emergency care standard that provides coverage based on a patient's presenting symptoms, rather than the final diagnosis. In addition, health insurers should cover EMTALA-related services up to the point an emergency medical condition can be ruled out or resolved.

EMTALA applies when an individual "comes to the emergency department."  A dedicated emergency department is defined as "licensed by the State . . . as an . . . emergency department” or “is held out to the public . . . as a place that provides care for emergency medical conditions." This means that hospital-based outpatient clinics are not obligated under EMTALA unless they provide more than one-third of care as unscheduled AND those 1/3 visits are emergency medical conditions as defined by the statute. EMTALA applies to all aspects of emergency care, including specialists, all available tests and procedures, and anything else necessary to determine or stabilize an emergency medical condition.  Additionally, a hospital must report any time it has reason to believe it may have received an individual who has been transferred in an unstable condition in violation of EMTALA.

Health insurance companies for years have denied claims based on the final diagnoses instead of the presenting symptoms that initially brought the patient to the emergency department seeking treatment. For example, if a patient presented to the emergency department with chest pain, but it turned out to be gastric reflux or non-cardiac related, the insurance company would deny payment as non-emergent.

The Prudent Layperson language, adopted individually by most States, defines an emergency medical condition as: A medical condition manifesting itself by acute symptoms of sufficient severity (including severe pain) such that a prudent layperson, who possesses an average knowledge of health and medicine, could reasonably expect the absence of immediate medical attention to result in: a) placing the patient’s health in serious jeopardy; b) serious impairment to bodily functions; or c) serious dysfunction of any bodily organ or part.

According to ACEP's White Paper on Prudent Layperson, “ACEP fought hard for many years at both the national and state levels to secure passage of legislation aimed at protecting emergency patients from retroactive denials of insurance coverage for emergency department visits for conditions that turned out not to be emergencies.” 

In 1997, Congress enacted the Prudent Layperson Standard for Medicare and Medicaid managed care plans. The prudent layperson standard was extended to all federal employees in 1999. The Affordable Care Act in 2010 also extended the Prudent Layperson Standard even further to individual- and small-group health plans, and to self-funded employer plans.

According to EMTALA, Medical Screening Examination and/or stabilizing treatment is not to be delayed in order to inquire about payment status.  This does not, however, assure that payers will pay for emergency treatment when treatment is for a condition that does not qualify for emergency payment according to their own unique guidelines.  For example, some payers use a diagnosis list to determine payment and if the ED visit is performed for a problem not listed, payment may be denied or paid at an allowable rate for a lower level of service, arbitrarily assigned by the payer.  Providers always have an opportunity to appeal a payer’s decision and it is advised that emergency providers appeal unfair payment decisions when made they are made. Although EMTALA and Prudent Layperson were not designed as a billing and payment policy per se, they give each patient with an “average knowledge of health and medicine” the right to seek emergency care for problems they deem as “serious”.

Unfortunately, some payers look at the diagnosis codes assigned to the final diagnosis statement in in the record to determine the medical necessity of the visit rather than consider the symptoms that required the work-up to determine a final diagnosis or rule out a life threatening condition. For example, a patient may come to the ED because of chest pain, receive a full chest pain work up (i.e., an EKG, a chest x-ray with interpretations, labs including cardiac enzymes, and PO or IV medication) and receive a discharge diagnosis of costochondritis. Although the discharge diagnosis is not life threatening or considered very serious, the physician utilized high cognitive resources during the ED visit to determine the final diagnosis.  According to Medicare.gov, “medically necessary” is defined as “health-care services or supplies needed to prevent, diagnose, or treat an illness, injury, condition, disease, or its symptoms and that meet accepted standards of medicine.”  Thus, the service should be considered appropriate and medically necessary. 

By contrast, Cigna, a large private payer, defines Medically Necessary" or "Medical Necessity" as “health care services that a physician, exercising prudent clinical judgment, would provide to a patient. The service must be:

1. For the purpose of evaluating, diagnosing, or treating an illness, injury, disease, or its symptoms
2. In accordance with the generally accepted standards of medical practice
3. Clinically appropriate, in terms of type, frequency, extent, site, and duration, and considered effective for the patient's illness, injury, or disease
4. Not primarily for the convenience of the patient, health care provider, or other physicians or health care providers
5. Not more costly than an alternative service or sequence of services at least as likely to produce equivalent therapeutic or diagnostic results as to the diagnosis or treatment of that patient's illness, injury, or disease.

Federal Law requires that insurance sold on the individual and group markets and group health plans abide by the Prudent Layperson Standard. According to CFR › Title 29 › Subtitle B › Chapter XXV › Subchapter L › Part 2590 › Subpart C › Section 2590.715-2719A coverage of emergency services in a group health plan, or a health insurance issuer offering group health insurance coverage, must provide benefits with respect to services in an emergency department of a hospital, and the plan or issuer must cover emergency services;

(1) Without the need for any prior authorization determination, even if the emergency services are provided on an out-of-network basis;

(2) Without regard to whether the health care provider furnishing the emergency services is a participating network provider with respect to the services;

(3) If the emergency services are provided out of network, without imposing any administrative requirement or limitation on coverage that is more restrictive than the requirements or limitations that apply to emergency services received from in-network providers;

(4) If the emergency services are provided out of network, by complying with the cost-sharing requirements; and

(5) Without regard to any other term or condition of the coverage, other than the exclusion of or coordination of benefits; an affiliation or waiting period permitted under part 7 of ERISA, part A of title XXVII of the PHS Act, or chapter 100 of the Internal Revenue Code; or applicable cost sharing.

Definition of Emergency Medical Condition. Under the statute, “emergency medical condition” means a medical condition manifesting itself by acute symptoms of sufficient severity (including severe pain) so that a prudent layperson, who possesses an average knowledge of health and medicine, could reasonably expect the absence of immediate medical attention to result in placing the health of the individual or, with respect to a pregnant woman, the health of the woman or her unborn child) in serious jeopardy; serious impairment to bodily functions; and to serious dysfunction of any bodily organ or part.

Applicability date. The provisions of federal law are applicable to group health plans and health insurance issuers for plan years beginning on or after January 1, 2017. Until the applicability date for this regulation, plans and issuers were required to continue to comply with the corresponding sections of 29 CFR part 2590, contained in the 29 CFR, parts 1927 to end, edition revised as of July 1, 2015.

Here is where the problem often lies.  Payers look for an “emergency” condition to determine medical necessity for payment and their definition of “emergency condition” may determine whether or not the visit is paid in full or even at a lower payment level.  Often, the presenting problem looks like an emergency condition but, after a medically necessary work up, the final diagnosis does not appear to support an emergency condition according to the payer policy. Identifying the presenting problem and/or chief complaint on billing forms may better describe the problem that caused the patient to seek emergency treatment.  However, according to ICD-10, “codes that describe symptoms and signs, as opposed to diagnoses, are acceptable for reporting purposes when a diagnosis has not been established (confirmed by) the provider.  When a diagnosis is confirmed, it is technically inaccurate to add on the chief complaint, signs and symptoms.  There is difficulty in providing “accurate” coding per the ICD-10 rules and identifying the problem when a final diagnosis is made.

In the example above, the patient who arrived with “atypical chest pain” (R07.89) and diagnosed with costochondritis (M94.0) would be coded with ONLY the costochondritis and not the chest pain which provides the medical necessity for the extensive diagnostic treatment to rule out a cardiac event. 

It is important to document and code medical necessity for each step in the medical decision-making process, including diagnostic studies and ancillary services.  Co-morbidities and risk factors provide additional details to support medical necessity for evaluation and management of the patient. 

For those payers who look to the final diagnosis on the claim form to determine the appropriateness of emergency department care, it may be in the emergency provider's best interest to include the codes for signs and symptoms to provide enough information to allow the payer to make appropriate decisions about payment.

References:

1. State-by-State listing of EMC language: https://publichealth.gwu.edu/departments/healthpolicy/CHPR/nnhs4/GSA/Subheads/gsa116.html
2. Prudent Layperson article: https://www.ahcmedia.com/articles/48670-congress-adopts-prudent-layperson-standard-for-medicare-medicaid-enrollees.
3. Emergency Medical Treatment and Labor Act (EMTALA), Centers for Medicare and Medicaid Services, http://www.cms.gov/Regulations-and-Guidance/Legislation/EMTALA/index.html
4. Cigna Definition of Medically Necessary: https://www.cigna.com/health-care-providers/coverage-and-claims/policies/medical-necessity-definitions.
5. ACEP EMTALA Fact Sheet: https://www.acep.org/life-as-a-physician/ethics--legal/emtala/emtala-fact-sheet
6. Private Payer Coverage of Prudent Layperson, https://www.medicaid.gov/Federal-Policy-Guidance/downloads/smd040500.pdf.
7. Federal Prudent Layperson Standard: https://www.law.cornell.edu/cfr/text/29/2590.715-2719A.