Provision of emergency care to all patients who present to the emergency department regardless of their ability to pay is a longstanding commitment of emergency physicians and is the safety net of the nation's health care system. Emergency care provided to individuals who are uninsured or underinsured has been variously termed charity care, uninsured care, uncompensated care, indigent care, and bad debt. We will attempt to define and characterize these terms further and discuss the financial impact that this subset of patients has on emergency physicians.
Charity care was defined in the 1998 Lewin Group study for CMS (then HCFA) as care provided for free or at reduced fees due to financial need on the part of the patient. Many organizations have a defined policy and approach to characterize the financial management of this subset of patients. These policies generally state that no payment or reduced payment is expected on the part of the patient. The charity-based system has cared for the disadvantaged in the United States for more than 100 years, and the United States provides more charity care than any other industrialized nation in the world.1 Charity care generally is non-reimbursed care when the emergency physician provides it. However, it is not included in the definition of bad debt.
Uncompensated care or bad debt is defined as the provision of services for which payment was expected, but not received. Bad debt is not considered to include the difference between standard charges and reduced fees that have been negotiated with an insurer.2 Uncompensated care may result from patient non-payment of amounts not covered by insurance, uninsured patients expected to pay for services rendered, insurer denial of payment, insurer down-coding of claims, patients compensated directly from insurers but not forwarding this payment to the provider, and individuals who, in fact, have the resources and assets, but refuse to pay for services rendered for a variety of reasons. Some emergency departments deploy financial counseling systems to attempt recovery of a portion of the payment owed by an indigent patient. These debt-counseling interactions generally follow completion of the patient's emergency department care in an effort to avoid any risk of EMTALA noncompliance. All emergency medicine physicians provide service to patients who meet this economic classification.
In 2000, emergency physicians reported that 61% of their bad debt was related to EMTALA mandated care. For 27.7% of emergency physicians, EMTALA was the only source of bad debt. In utilizing the data from the Medical Expenditure Panel Survey from 1996-1998, it was determined that the percentage of total charges paid by Medicaid, Medicare, and the uninsured remained constant, while the mean reimbursement for privately insured patients declined from 77.7% to 65.7%.3 The MEPS data would suggest that the contribution of the commercial insurance companies to bad debt is increasing and that emergency physicians are less able to cost shift to offset the uncompensated care burden.
Indigent care and uninsured care are often inappropriately lumped together as a catchall term for those individuals lacking insurance. Indigent care is a term that defines those individuals without health insurance who live below the federal poverty level that may or may not be employed. Some uninsured individuals are employed and have means well above the federal poverty level. They cannot technically be classified as indigent. People with yearly incomes between 100%-200% of the federal poverty level comprised 48.9% of the uninsured. Current estimates put the number of uninsured at about 43,000,000. According to the U.S. Census Data for 2001-2002, 74.7 million people under the age of 65 were without health insurance for all or part of that period. About 70.7% of the uninsured were employed at the time.
The fastest growing segment of the uninsured is comprised of middle income working families,1 not those who are unemployed or from families in which the head of household is unemployed, as is assumed by more than one-half of the American public.4 Many working Americans may not be offered health insurance through their employer, owing to the prohibitive cost of health insurance, or these people may be self-employed and choose not to purchase health care insurance for a variety of reasons.
Another significant group of patients who may qualify as being underinsured are those covered by the Medicaid program and other government supported programs such as Children's Health Insurance Programs (CHIPs) for children and families. In many circumstances, the program's institutional (hospital) reimbursement for services is reasonable and may even approximate Medicare payment schedules. However, emergency physician services are commonly under-compensated and frequently reimbursement does not cover the cost of providing services by emergency medicine physicians. In emergency medicine practice, this group of patients does not fall into the category of uncompensated care or bad debt because there is a contractual arrangement to accept the designated fee as payment in full; even though the Medicaid reimbursement rate in many states is well below the cost of providing the services.
Medicaid is a federally mandated program, jointly sponsored by federal and state governments. It is a program that offers health care coverage for select low-income families. Medicaid eligible patients also include people who are aged, blind, or disabled, along with certain people in families with dependent children. It is a common misconception that Medicaid is a program that is designed to cover medical costs for all poor persons. More correctly, Medicaid is the largest source of funding for medical and health-related services for people with limited income.5 Albeit a Federal program, Medicaid is administered by individual states. Each state determines-subject to federal approval-its own eligibility requirements, the range of health services offered, and the payment schedule for institutional and professional services provided. In 2002, 40,147,539 people were enrolled in Medicaid, up from 33,241,147 in 1996. Individual states either negotiate with providers or legislate the compensation for treating Medicaid patients. In New York State, emergency physicians received $17 for Medicaid patients that were cared for in emergency departments in 2003. In 2001, emergency physicians in Michigan received either $68.49 or $166.78 for similar services.7 Although physicians can expect a predictable payment for services rendered, the amount reimbursed in many circumstances and, depending on the state in question, may not cover emergency physician costs for providing service.
All emergency physicians are well acquainted with the provisions of EMTALA, the federal patient "anti-dumping law." It was created to eliminate the practice of hospital and physician refusal to provide emergency care to the medically indigent. Many have interpreted EMTALA as the U.S. government's declaration of universal emergency health care for all, creating a federally enforced right to emergency care for any individual in the United States.7 ACEP supports the unobstructed access to quality emergency care as a fundamental right for every American and all patients presenting to the emergency department. The government has created this safety net for the uninsured and indigent, but has provided no means of fiscal support for hospitals and physicians providing this federally mandated care. EMTALA has forced health care providers to assume the fiscal responsibility for providing care for all under the constant threat of fines, civil liability, and loss of provider participation in the Medicare and Medicaid programs.8 Emergency physicians bear the brunt of the financial impact of providing EMTALA mandated care, while maintaining access to care 24 hours a day seven days a week.
The cost of EMTALA mandated care is substantial for the emergency physician. According to a May 2003 American Medical Association (AMA) study, emergency physicians annually incur, on average, $138,300 of EMTALA-related bad debt. Approximately 95.2% of emergency physicians provide some EMTALA mandated care in a typical week and more than one-third of emergency physicians provide more than 30 hours of EMTALA-related care each week. Physicians in other specialties provide, on average, less than six hours per week of care mandated by EMTALA, and each incurred, on average, more than $25,000 of EMTALA-related bad debt in 2001.
According to the CDC's annual summary of hospital emergency visits--as prepared by the CDC's Center for Health Statistics, Americans made 110.2 million visits to emergency departments in the United States during 2002, a 23% increase over the 90 million visits made in 1992. This total represents 39 visits per 100 people and 61 visits per 100 individuals over 75 years of age. During the same period, the number of emergency departments has decreased by 15 %.9 According to The Centers for Medicare & Medicaid Services, 55% of an emergency physician's time is spent providing uncompensated care.10 Emergency physicians face the difficult challenges of increasing emergency department visits with fewer hospital inpatient beds, subsequent ED crowding, and eroding reimbursement.
Emergency departments across the country are essential to providing continuous 24/7 access for patients to physicians, specialty hospital services, advanced diagnostic technology, and when necessary, transfer of patients to appropriate centers of care for any problem with which a patient may present. ACEP has prioritized its efforts towards working for more reasonable reimbursement approaches that adequately address uncompensated care. Regardless of what practice structure an emergency physician finds him/herself in, the process for careful calculation and consideration of overhead costs, including the rising costs of malpractice insurance, must incorporate uncompensated care from uninsured or underinsured patient populations. In order to secure a healthy safety net and access for all, we must continue to lobby federal and state government for fair and equitable reimbursement to provide high quality emergency care.
Federal legislation to guarantee access to emergency medical care is commendable, but the substantial impact of uncompensated care needs to be considered as well. Realistic considerations and economic evaluation of the costs of providing emergency care is required to properly approach a solution to this problem. Understanding the economics and proposing a properly funded program of basic health care that includes unobstructed access to emergency care for financially challenged patients is a reasonable start.