Boutique ER bills prompt backlash from insurance industry

Boutique ER bills prompt backlash from insurance industry

Blue Cross Blue Shield of Texas (BCBSTX) HMO policyholders could end up paying the full cost of seeking treatment at freestanding emergency rooms (FSERs) should their ailment not rise to the standard set by the insurance provider beginning Aug. 6. The change, according to the company, comes after an influx of inflated billing claims for non-emergency procedures has infiltrated the market.

FSERs, or emergency rooms not attached to hospitals, have proliferated in the last 10 years, multiplying in number. Research articles published in the Annals of Emergency Medicine estimated a total of 80 freestanding FSERs in the country in 2007. By 2015, that count had risen to 360, with Texas having the most (181) of any state. In addition to the hospital emergency rooms, in Beaumont alone there are three separate FSERs.

The insurance company had proposed making the change sooner, but was delayed in its quest by the Texas Department of Insurance (TDI), with the state agency expressing concern that patients may not receive coverage for medical emergencies. June 15, Melissa Hield, TDI associate commissioner, requested responses from BCBSTX addressing issues with proposed changes in coverage.

“Texas is experiencing a continual escalation of emergency room costs due to multiple factors including billing for services that were not performed or not medically necessary, inaccurate billings, inappropriate ER use, excessive and unconscionable charges for routine services and the proliferation of out-of-network freestanding emergency rooms,” BCBSTX officials responded to Hield.

“Blue Cross and Blue Shield of Texas (BCBSTX) has observed procedures billed without supporting documentation, patients presenting in emergency rooms with head lice, plantar warts and simple sunburn along with bills for levels of treatment exceeding the actual level of care provided. A contributing factor of inappropriate ER use may be due to marketing and promotional practices that confuse consumers. Regardless of the reason, these issues demonstrate a need to verify the accuracy and legitimacy of the services that our members receive and are potentially billed for by emergency facilities.”

Examples were provided for TDI to review. Among the most egregious charges noted by the insurance provider were $52,000 for microscopic toe surgery that had no substantiated medical record, an unsubstantiated CT scan for $64,000, an up-coded bronchitis bill in excess of $8,000, lice treatment for $2,000, mild sunburn treated for $7,000, acne treatment in the thousands of dollars, tonsillitis observation in excess of $45,000, and unbundled blood work and IV drip totaling more than $10,000.

Dr. Vivian Ho, et al, claimed in a 2017 study of freestanding emergency rooms that, “Freestanding (emergency departments) potentially waste societal resources because they represent a high-cost provider for services that could be delivered in lower-cost settings. This case is particularly troublesome because anecdotal evidence suggests patients often confuse freestanding (emergency departments) for urgent care centers and experience sticker shock when they receive their bills.”

The disparity in cost when treated at an FSER versus an urgent care center is dramatic, according to the study performed by Ho’s team. For example, the most common diagnostic category treated at FSERs is “other upper respiratory infections,” which had an average price of $1,351, the study reported. The same medical condition treated at an urgent care facility bills for $165, or 800 percent less. Abdominal pain, a Top 3 most treated “emergency” at FSERs, costs on average $3,466. At urgent care centers, abdominal pain can be treated for the average cost of $173.

Why patients go to the higher-cost option is debatable. However, Starbucks gift cards, free massages, and other “gifts” are often used to entice new clients. The “freebies” associated with the FSER care may themselves come with hidden costs, though. In addition to the financial strain increased-cost medical procedures are placing on insurance companies like BCBSTX, the fact that most FSERs are “out-of-network” for most clients can also mean surprise bills and out-of-pocket costs for patients as well.

“Texas,” in particular, according to BCBSTX spokesperson James Campbell, “has one of the highest rates of surprise medical billing in the nation.”

“The risk of surprise billing,” he added, “is even greater at freestanding emergency rooms (as) nearly 80 percent of out-of-network claims for Texas emergency facilities occur at freestanding ERs.”

The reason these FSERs are out-of-network for its customers is simple, Campbell advised.

“In 2016, Blue Cross and Blue Shield of Texas reached out to all known out-of-network FSERs in Texas, hoping to negotiate in-network agreements. Not a single FSER contacted would agree to a negotiated rate,” Campbell said. “Since, a few have joined our network, but most remain out-of-network.

“In many cases, FSERs may choose not to be in an insurer’s network and therefore be ‘out-of-network’ for insured patients. To add to the confusion, they may advertise that they take ‘all insurance,’ or misstate emergency care coverage.” Make no mistake, Campbell warned, “FSERs are not prevented from balance billing members.”

As noted by BCBSTX spokesperson Campbell, the policy changes regarding FSERs will only affect HMO clients.

Policyholders were warned of the pending changes as early as April.

For PPO clients, the legislative system has already worked out some of the kinks associated with FSER coverage.

“Senate Bill 507, authored by Sen. Kelly Hancock, expands mediation protections to include FSERs and other out-of-network emergency providers to all PPO insurance plan holders,” Campbell said. “The reform empowers zPPO plan holders to challenge overly expensive medical bills they received when visiting one of these facilities. As well, House Bill 3276, authored by Rep. Tom Oliverson, requires independent FSERs to be more transparent when it comes to their insurance network status to lessen the confusion about the cost of services these facilities cover and what’s considered in-network.”

“Members that participate in a BCBSTX HMO plan,” however, Campbell clarifies, “do not have an out-of-network ER benefit unless the required care is emergent.”

Emergencies – not head lice, sunburns, and acne – can still be covered by BCBSTX for FSER services, and the insurance carrier has assured TDI that emergency medical services will not be affected by the latest coverage update.

“BCBSTX will always cover the member’s care if their symptoms, including pain, would lead a person with an average knowledge of medicine to believe that life or limb is in jeopardy – or, for a pregnant woman, jeopardy to the health of the fetus,” BCBSTX officials responded to TDI Associate Commissioner Hield’s concern of emergency care coverage. “This is the ‘prudent layperson’ standard, and our Emergency Benefit Management (EBM) process embraces this standard. However, based on the observations noted, EBM is a necessary response to the issues around claim integrity, excessive charges and inappropriate emergency room use given these drastic changes in the delivery system since everyone paying a premium, ultimately, will share in the costs associated with unregulated and exorbitant out-of-network emergency room charges.”

The Texas Association of Freestanding Emergency Centers (TAFEC) disagrees with liberties taken to combat allegedly inflated emergency room care claims, and argues that the patient’s perception of the severity of the situation should be sufficient to meet all claims’ requirements regardless of the ending diagnosis.

“The ‘prudent layperson’ standard … was created to protect consumers from high medical costs that arise from emergency situations, allowing them to be charged at in-network rates. However, insurance companies have been reluctant to apply this standard for care issued at freestanding emergency centers,” according to the TAFEC. “By not providing usual and customary reimbursement rates, insurance providers violate the intent of the medical community and legislators who turned the prudent layperson standard into law.

“Furthermore, health plans are required to pay for emergency visits for medical situations in which a person believes his or her health is threatened. The final diagnosis should not influence whether the insurer pays for the emergency room visit, and insurers cannot legally apply the claim towards the out-of-network benefits.”

Although the TDI has posed inquiries into the BCBSTX changes, according to spokesperson Ben Gonzalez, the state agency has no regulatory authority over the matter.

“It’s going forward, but it’s not something the TDI had to authorize,” Gonzalez explained. “We’ll be watching for feedback from the consumers – we’ve had some concerns …”

Gonzalez said that BCBSTX has been cooperative with the TDI’s review, and not only made assurances in regards to procedural review of FSER claims but also produced documents and answered all questions posed on the matter prior to implementation.

“Over the last two months, Blue Cross and Blue Shield of Texas (BCBSTX) has diligently worked with the Texas Department of Insurance, providing all requested information regarding a process – being implemented (Aug.6) – to review emergency room charges of our retail and group HMO members,” according to Campbell. “Combined with continued education and information, we believe this thoughtful, multi-step review process will provide protection for our members from inappropriate billing, egregious charges and fraud, waste and abuse by out-of-network emergency departments.”

BCBSTX reported to the TDI that the company had tried to alleviate the exorbitant medical billing through legislation – to no avail. During the 85th Legislative Session in 2017, BCBSTX supported HB 3867/SB 2064 relating to “unconscionable charges” that would have empowered state agencies, specifically the Office of Attorney General, to pursue providers for price gouging consumers when they are in vulnerable positions because of a medical emergency – much like other laws that protect consumers against such practices during times of crisis.

“Through discussions with the Attorney General’s Office, one of the obstacles they face is that Texas consumer protection laws focus upon deceptive practices,” BCBSTX reports. “There is little, outside of a declared emergency, that the Attorney General can do regarding the price gouging of consumers by emergency physicians and emergency facilities.”

Taking matters into its own hands, BCBSTX has enacted a process that will entail a multi-step review for FSER claims for HMO patients. Denials will be made under a claims review process when a physician reviews the medical record, even when not statutorily required, and identifies that a service was not medically necessary; a service was related to a symptom a ‘prudent person’ would not consider an emergency condition; a service was not performed according to the medical record; a service was inappropriately up-coded or unbundled; or a service is excluded under the health plan, for example, procedures that are experimental or investigational.

This approach, the insurance carrier reports to TDI, “balances the consumer’s need for access to emergency care against unreasonable access and inappropriate billing behavior by some providers in this space.” Additionally, “BCBSTX believes this comprehensive approach will help reduce these factors and help provide more fiscally sound health care spending for the consumers it serves.”