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Emergency Departments Chafe at Low Payments, Lack of Help

The state’s emergency care system is in critical condition, according to Andrea Brault, head of the California chapter of the American College of Emergency Physicians.

“The emergency medicine safety net in California is particularly vulnerable,” Brault said. “We’ve spoken for years about how our safety net is degrading, and now we’re in a very bad place.”

She had one sobering statistic to drive that point home.

“California is ranked 51st out of all the states (and Washington, D.C.) in access to care,” Brault said, “meaning in terms of the number of people who need access to an emergency department, versus the number of emergency departments available, the number of beds and nurses and physicians available, we are coming in last.”

That bleak picture is partly because of the way emergency departments are reimbursed, she said. When people come into an emergency department, they are treated first and the insurers are billed later. If those bills go unpaid, then EDs have to cut back administrative and clinical staff.

“It doesn’t really affect you until you have to seek emergency care,” Brault said. “And you’re waiting for hours upon hours with your injury, your pain or your child.”

One of the reasons EDs have struggled financially is because certain types of insurance companies routinely under-reimburse, she said. That is, they delay reimbursement, down-code procedures or sometimes refuse to pay claims altogether.

“Like any small business, when you have no revenue coming in, you have to cut staff at some point,” she said. “This is creating a significant problem, where ambulances are being diverted, you have longer wait times. Care is impacted.”

Legislative Intervention

The state Legislature passed AB 1455, by Jack Scott (D-Montrose), in 2003 to deal with perceived inequities in ED reimbursement.

“Most of the health plans abide by AB 1455,” Brault said. “But in the delegated payer model, … we’re having tremendous difficulty.”

Problems are rampant and routine among delegated payers — companies that are middlemen between health insurers and patients, she said.

“It’s turned into the wild, wild West out there,” Brault said. “You just have no idea if you’re even going to get paid.”

The enforcement arm of AB 1455 belongs to the Department of Managed Health Care and its provider complaint department.

A recent legislative oversight hearing aimed to field comments about how DMHC handled — or didn’t handle — complaints from providers. There was one big problem with that oversight hearing: DMHC didn’t attend.

That incensed California’s newly elected insurance commissioner, Dave Jones (D), who convened the hearing as a member of the Assembly.

“We did invite the department to attend this hearing,” Jones said. “I’m very disappointed and deeply frustrated that the governor’s office said they would not be sending someone to the hearing, despite our offer to reschedule if there was a conflict.”

A representative of DMHC said the slight was unavoidable.

“The DMHC was not given adequate notice of the hearing in order to prepare the data needed to respond to concerns,” DMHC spokesperson Lynne Randolph said in a statement. “However, we are very proud of the work performed in its Provider Complaint Unit, which has recovered more than $22 million to date in additional payments to health care providers.

“We have informed the committee staff that we will be pleased to meet with them early in the year to discuss these complex issues further,” Randolph said, “and we will be responding to written questions in the near future.”

That was thin comfort to Jones, who said his office lobbied hard to reschedule the oversight hearing. He said that he’s never seen a government agency choose not to attend a legislative oversight hearing, and he hopes to never see it again.

“Important questions have been raised and have gone unanswered,” Jones said. “We will certainly revisit this. And perhaps it might reflect on this department’s next budget.”

Reimbursement Wonderland

At the end of the oversight hearing, Jones summed up EDs’ problems this way:

“You are in a rather Kafka-esque dilemma,” Jones said, “that has overtones of Alice in Wonderland, as well.”

Michael Forman is an emergency physician in Oceanside, about 40 miles north of San Diego. He said he has trouble believing what he has gone through to get reimbursed for emergency room treatments.

“We make a few hundred dollars per claim,” he said. “Our average bill is $350, maybe $400, and we get a payment of $150, $175. The rest is denied. This is often for saving someone’s life. So then we have to appeal back to the ones who denied it in the first place.”

With the delegated payers, the first step is to appeal to them, Forman said. Delegated payers often direct physicians to appeal to the health insurer and insurers send physicians back to the delegated payer.

Then comes the appeal process to DMHC, and that has its own down-the-rabbit-hole procedures, Forman said.

“They’re making us do it 50 (appeals) at a time, or even one by one, and we can’t do that,” Forman said. “When insurance companies are down-coding or not paying, they do it routinely. So I have thousands of underpayments to address.”

Forman said he decided to go through the DMHC process as requested, so he could at least get back some of the money owed him.

“So we pick the ones that are egregious; we’re not going to appeal the little ones, or the ones that can be argued. And we submitted 50 claims to complaint division, and we got one determination that we were underpaid.”

Forman threw up his hands in frustration. “One,” he said.

“We were told the complaint division didn’t have the staff to handle this kind of paperwork. We were told to go the IDRP (DMHC’s Independent Dispute Resolution Process), so we sent the other 49 to the IDRP.”

Part of the IDRP process is voluntary, so even if Forman showed up to resolve his dispute, that didn’t mean the health care insurer did.

“With most of them, the health plan did not agree to participate,” Forman said.

“What are we supposed to do?” he asked. “It cost us $40 a claim, we had to go through a lot of trouble. But then to have 100% of our claims rejected, that’s ridiculous.

“It’s basically an arbitration process, but one side can elect not to participate at all. … It’s a non-dispute resolution process. If the health plan doesn’t want to pay, they just don’t have to show up.”

Forman said his last resort is to sue for each individual ED bill in small claims court. He said he’d rather spend his time in the hospital ED, doing what he was trained to do.

“But that’s what we’re doing in January,” Forman said, “going to small claims court. I don’t want to do that, obviously, but we’re desperate.”


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