DMHC Balance Billing - Cal/AAEM response

[CAL/AAEM News Service]

DMHC Balance Billing - Cal/AAEM response

Date: August 30, 2006 


Dear Subscribers of the CalAAEM Newsletter,

The Governor and the Department of Management Health care are poised to violate previous
court rulings and prevent any direct billing for emergency medical services to all
patients with any type of health insurance. This is an outrageous act which broad
implications that subverts the efforts of CalACEP and CalAAEM to support the provision of
emergency medical services in California. I encourage you to visit the site noted below
submit copies of this or your own writings and take action. This is a real piece of bad
news. Here is the text of what I wrote about this issue.

Steven C. Gabaeff, M.D., F.A.A.E.M.


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I am President of the California Academy of Emergency Medicine (CalAAEM). The proposed
regulations (Department Of Managed Health Care, Title 28, Sections 1300.71) to allow
health plans and their agents (the physician medical groups) to avoid payment for
emergency medical services is a dangerous and ill advised step in the wrong direction.
The support for a prohibition against billing for emergency medical services, misnamed
balance billing, is an intervention by a state agency with the effect of undermining
public services to increase profits for already cash rich corporate interests.

The net effect of such regulations will be a further reduction in support of the already
incredibly stressed emergency medical services system. This is a profit driven attack on
essential services, needed by all and mandated by law to be provided.

Insurance carriers (health plans) and the physician medical groups, acting as
intermediaries for insurance premium dollars and the health plans themselves, are using
their influence to negate court rulings (Bell and Prescott) that clearly define the
contractual relationships between patients and emergency medical services providers
established at the time of service. Balance billing is not a ploy to get health plans to
pay for EMS, it is billing for services rendered. The complaints of patients that health
plans have an ill conceived and incomplete approach to emergency medical services (EMS)
and the EMS system is true. It is intentional and profit driven. Patients complain and
health plans respond that the emergency physicians (EP's) and the EMS system are the
problem. It is pure deception. The patient's ire, raised by a health plan refusing to pay
for EMS services that patients expect to be paid for, is a health plan strategy buried in
the fine print of health insurance policies which surprises and enrages enrollees when
the bill arrives. As well it should. The failure to provide for EMS is an egregious and
calculated strategy to increase profits and create chaos within the system. The
misdirection of blame to the tireless providers of EMS, working day and night, 365 days a
year, in the most stressful environments imaginable is a ruthless and callous strategy
which the state now appears poised to bless and endorse.

The Department of Managed Health Care (DMHC) states in "Initial Statement of Reasons,
Claims Settlement Practices; Customary & Reasonable Criteria"
http://wpso.dmhc.ca.gov/regulations/docs/regs/14/1155937498893.pdf 

 "This provider billing pattern causes serious medical, economical and legal detriment to
enrollees, and is an unfair billing practice in situations where the plan has the legal
obligation to provide coverage for the services."

The key concept here, which seems to be ignored by DMHC, is the "legal obligation" of the
plan, to the patient, to pay for emergency medical services. This is what the physician
groups and health plans are refusing to do. They are refusing to honor their legal
obligation to pay for EMS. They are doing this through benefit reductions, restrictive
language furtively inserted in health plan contracts, retrospective redefinition of
emergency medical situations and calculated dispute and denial of legitimate EMS claims.
All this results in the intentional infliction of economic and emotional distress on
their enrollees and EMS providers. This distress and resultant anger should be directed
at the health plans that have a legal obligation to pay for the services. It should not
be deflected the emergency physician's (EP'S). EP's have the legal obligation to provide
the services and legal right to be paid for those services. Heath plans creating and then
exploiting that distress and directing it at the providers of EMS, as a public relations
strategy, should be condemned

Emergency medical services are essential services which the health plans rely on to take
care of their patient's emergencies. The health plans and physician groups themselves
could set up emergency care centers to pay their own emergency medical services costs but
choose not to. They could send their physicians to any ED in America to provide care and
they do not. They could deflect a large percentage of their emergency patients to after
hours clinics they refuse to set up. They are choosing to rely on other professionals and
other institutions (the hospitals) to provide essential services they have consciously
decided not to fund and are now conniving not to pay for. The physician groups and health
plans are now using their influence (and money) to get the DMHC to sanction a policy in
which there will be no system of adequate reimbursement to the current system or any
mandate to create a viable alternative emergency services delivery system other than the
current system. The current system is the one they choose to rely on day in and day out
and refuse to pay for. 

There are successful systems in place. Kaiser Health Care runs such a system of
intervening when patients have emergencies (ECRP). They use a combination of telephone
advice by nurses, advice by MD's on the phone, immediate or next day appointments and
consultation with on duty Kaiser physicians at special telephone call centers, talking to
emergency physicians in ED's while their patients are there, to coordinate care. When
these encounters involve emergency medical services, they pay the full cost of emergency
services, no questions asked. They correctly understand the role that out of plan
emergency medical services within a covered patient population and deal with this to the
satisfaction of all. 

If physician groups fail to devote adequate resources to the essential and key element of
providing selected medical services, particularly EM services, why are they being given a
lower cost out? An out that in effect is destroying the system itself; all for the sake
of adding some millions of dollar to the already billions of exorbitant profits they are
currently enjoying.

With full payment, the EMS system could be expanded to deal with this issue and the
myriad other issues that will be negatively impacted by these policies of inadequate
funding of the EMS system. It is not like health plans don't have the money. Kaiser is
doing quite well and this issue is a non-issue for both Kaiser and the thousands of ED's
and EP's they deal with across America. The physician groups, who must deal with
inadequate payments from health plans themselves, are being used as the sympathetic
public face to advance a health plan initiative driven by greed. This is a health plan
issue being passed off as a physician group issue to deflect attention from the less
appealing notion of insurance companies denying payment to increase profits at the
expense of an essential service within the health care system. Your department (DMHC) and
the Governor are being used as tools to lower their costs for no other reason than their
callous obsession to the bottom line. The net effect of this is reduction in services,
overcrowding and ED closures due to lack of funds sufficient to maintain an emergency
department.

I have discussed the issue of adequate reimbursement with the leadership of the
California Chapter of the American College of Emergency Physicians (CalACEP) on numerous
occasions. CalAAEM's position is that inadequate funding is not a physician reimbursement
issue but an EMS system funding issue of which we, the physicians are only a small part.
It must be remembered that both hospital and ambulance services are all affected by these
premeditated strategies to avoid paying for this essential component of health care: EMS.
Furthermore, hospitals and other provides suffer as we do with inadequate funding. Often
the institutions are more severely impacted than the EP's. Clinics closing, decreasing
numbers of back-up physician consultants in ED's, sick of being denied payments, refuse
to be on call. Other hospital services are cut. In toto the situation has forced a new
definition of the standard of care for inadequately staffed and equipped facilities (both
urban and rural). These are facilities from which patients must be transferred for
essential emergency services because the costs of such specialty services cannot be paid
due to inadequate funding and negative cash flow in emergency services. They have forced
a new diminished standard of care for provision of follow-up services and promote a mind
numbing disregard for the millions of uninsured and underserved patients in California.

CalAAEM is prepared to develop a set of cost guidelines for EMS that could be as concise
as a single piece of paper. We are prepared to negotiate for the cost of services through
the DMHC with the goal of supporting a system of EMS and expanding EMS. Our goal is not
to increase physician income but to increase the number of physicians, other health care
professionals and facilities providing services. We are not prepared to participate in
the destruction of the EMS system to increase the bottom line of all ready cash rich
health plans swinging their heavy laden bag of profits here and there to buy influence,
deny services to their patients and further wreck havoc on all already tottering system.
You can be assured that each and every ED closure creates more denial of services to more
patients and more suffering. You can further be assured that while you may enjoy good
coverage for routine medical care, when your family member or friends suffers major
trauma you will fall into a struggling system already stretched to beyond capacity. You
can be assured that when you have your heart attack on vacation in the Sierras it often
takes hours and sometimes days to get you to the proper services.

Your notion that "The Department has not identified any reasonable alternative nor has
any stakeholder brought to the attention of the Department an alternative that would be
more effective in carrying out the purpose for which the above action is proposed, or
that would be as effective and less burdensome to affected private persons, than the
proposed action" reflects a lack of will to fix this problem. The proposed regulations
serve only one purpose: to increase the profits of health plans at the expense of
patients. 

Our reasonable alternative


We propose a schedule of fees for EMS to be applied statewide, developed in conjunction
with EM and other professional organizations in California and mandated payment of those
fees by health plans without dispute in all situations. We believe health plans must be
made responsible for the movements of their patients within the EMS system and be
mandated to provide EMS either through their own systems, like Kaiser, or pay others to
do it. Misuse of the EMS system by plan enrollees should be regarded as a plan problem to
be dealt with outside of the EMS system and between the plan and the enrollee. We propose
that the state stop representing the health plan's self serving interests when they
refuse to pay for services they are legally obligated to provide. We support a single
payer health plan system and insurance coverage for all that will obviate the need to
address this issue. If everyone were covered the funding of the EMS system would
certainly be less problematic.

Under no circumstances should the state sanction the refusal of health plans and
physician provider groups to pay for essential services that the plans themselves, in
calculating and premeditated deliberations, have decided not to fund or provide. 

We believe that health plans should be directed to develop comprehensive EM services
delivery plans similar to the very successful Kaiser model. There is no excuse for this
failure to address these issues. It is an act of exploitation of existing regulations
that mandate the provision of EMS that is being used as a lever to manipulate a system in
need. The profit motive and the misuse of these excess health care dollars (excess
profits) to advance these destructive proposals designed to increase profits, are
shameful. 

We are prepared to demonstrate reasonable alternative solutions and not to allow
corporations obsessed in profit to use their influence to undermine essential services
and spread suffering throughout our society.

We will offer these materials to other EP's for submissions in support of our position
through your web site: http://wpso.dmhc.ca.gov/regulations/docs/regs/14/1155937498893.pdf


I would be happy to meet and testify in these matters.

Steven C. Gabaeff, M.D., F.A.A.E.M.
Fellow of the American Academy of Emergency Medicine
President California Chapter of the American Academy of Emergency Medicine
5732 Coda Lane
Carmichael, CA  95608
916 485 6706
sgabaeff at adnc.com


Cyrus Shahpar & Brian Potts 
Managing Editors, CAL/AAEM News Service
University of California, Irvine

The CAL/AAEM Archives are available at: http://maillists.uci.edu/mailman/public/calaaem/


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