March 28, 2018

In recent months, Anthem Blue Cross Blue Shield and UnitedHealth Group have enacted new policies for emergency department services.  Although the two policies differ in approach, both threaten to deny or downcode claims for emergency department care that traditionally has constituted covered services.


Anthem’s new policy denies coverage for treatment in a hospital emergency department that Anthem determines was not an emergency.  The new policy affects patients in Georgia, Indiana, Kentucky, Missouri, New Hampshire, and Ohio, with the potential to expand to other states in the future.  Anthem’s goal appears to be to steer patients toward urgent care and primary care facilities.

Under the new ED policy, Anthem will determine whether or not services are covered based upon the physician’s ultimate diagnosis, rather than the symptoms that caused the patient to go to the hospital.  Thus, an ED visit from a heart attack or appendicitis remains covered, but an ED visit from chest or abdominal pain caused by indigestion may not be.  Although Anthem reportedly has a list of diagnoses that no longer constitute covered services in the ED, Anthem has declined to publish the list.  The new policy contains several exceptions, such as patients under 15 years old, patients directed to the ED by a physician, patients who receive advance treatments like surgery, CT scans, or MRIs, or patients who do not have an urgent care center within a certain geographic radius.

Anthem’s new ED policy has drawn strong criticism from lawmakers and medical professionals.  Senators Claire McCaskill (D-Mo.) and Benjamin Cardin (D-Md.) recently asked Secretary of Health and Human Services Alex Azar and Secretary of Labor Alexander Costa to investigate whether the policy violates the Affordable Care Act’s prudent layperson standard, under which a person who possesses an average knowledge of health and medicine could reasonably expect the absence of immediate medical attention to result in serious health consequences.  The American College of Emergency Physicians created an advocacy video opposing the new policy.


UnitedHealth’s new ED policy, effective March 1, applies nationwide to all ED claims submitted with Level 4 or Level 5 codes for any of UnitedHealth’s commercial or Medicare Advantage plans.  Those claims will be audited with EDC Analyzer, a proprietary software tool of UnitedHealth’s Optum subsidiary.  If the software determines that Level 4 or Level 5 coding is unwarranted, UnitedHealth will downcode the claim to another level or deny it altogether.  The policy applies only to facility claims, not physician claims.  It does not apply to patients who are admitted to the hospital, children under two, critical care patients, or patients who die in the ED.


Although the two new policies are materially different in approach—Anthem’s policy seeks to divert low-complexity care away from the emergency department, while UnitedHealth’s policy attempts to ensure coding accuracy at the highest levels of complexity—both policies threaten the bottom line of affected emergency departments.  Under Anthem’s policy, facilities will be placed in the uncomfortable position of balance billing of patients (where permitted by law) or the increased application of charity policies.  Under UnitedHealth’s policy, facilities will be left to guess the factors in their own coding guidelines that will please or displease the proprietary Optum algorithm.  In particular, emergency departments that treat a disproportionate number of Level 4 and Level 5 patients—such as trauma centers or facilities with collocated urgent care centers—may face a disproportionate number of denied or downcoded claims.

Hospitals should be on the lookout for new waves of claim denials from Anthem and UnitedHealth, and should pay close attention to appeal deadlines within their facility agreements or provider manuals.  These deadlines are often as short as 30 days from the date of denial, and can result in facilities quickly losing the ability to contest the denial and pursue reimbursement.  Of course, EMTALA still requires emergency departments to provide appropriate medical screening examination and treatment regardless of how those services may be adjudicated under these new payment policies.  Hancock Daniel’s attorneys will continue to monitor developments with these new policies and are happy to assist affected hospitals.  Contact Hancock Daniel’s Commercial Litigation Team if you have questions.


The information contained in this advisory is for general educational purposes only. It is presented with the understanding that neither the author nor Hancock, Daniel & Johnson, P.C., is offering any legal or other professional services. Since the law in many areas is complex and can change rapidly, this information may not apply to a given factual situation and can become outdated. Individuals desiring legal advice should consult legal counsel for up-to-date and fact-specific advice. Under no circumstances will the author or Hancock, Daniel & Johnson, P.C. be liable for any direct, indirect, or consequential damages resulting from the use of this material.


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