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Insurance Denial for Emergency Room Care: Fallout from Anthem, Inc Policy

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Financial concerns are often cited by doctors as a barrier to administering routinely recommended vaccines to adults. Survey respondents answered questions on payment and profit for various public and private payer types. Over half of respondents reported losing money vaccinating adult Medicaid beneficiaries. Few respondents reported negotiation with manufacturers or insurance plans on vaccine purchase prices or payments for vaccinations. Claim denial is a major reason many adults don't inquire about vaccinations or seek them out with their doctors (Lindley et al, 2018; Potter et al, 2018).


A new study in JAMA Network Open underscores the risk to patients if the Anthem Blue Cross Blue Shield policy to deny emergency room coverage based largely on a patient discharge diagnosis is adopted nationwide. As the American College of Emergency Physicians (ACEP) have said, it is unreasonable to expect patients to know ahead of time if their headache is a migraine or an aneurysm; if their abdominal pain is indigestion or some worse intestinal issue. This will force patients to refrain from going to the emergency room over the fear of large medical bills. More than 65% of patients that could be denied coverage received emergency level services such as imaging or multiple blood tests. Currently Anthems policy is active in six states with the Medical Association of GA filing a federal lawsuit saying Anthem has violated the prudent laypersons standard-a federal law requiring insurance companies to cover the costs of emergency room care based on patients’ symptoms, not their final diagnosis (ACEP, 2018).

Insurers have increasingly adopted policies to reduce emergency department visits that they consider unnecessary. One common approach is to retrospectively deny coverage if the emergency room diagnosis is determined by the insurer to be nonemergent. This study has attempted to characterize emergency room visits that may be denied coverage if the denial policy of Anthem, Inc is widely adopted.

Emergency room visits and payment for these visits by insurers and patients have grown substantially in the US over the past several decades. This growth has compelled public and commercial payers to pursue strategies to reduce emergency room use. One tactic is to apply financial disincentives, such as coverage denial to emergency room visits that could be presumably be cared for by a visit to the doctor’s office, urgent care center or retail clinic.

These visits to the emergency room are often labeled as inappropriate or nonemergent using definitions based on the discharge diagnosis, that are readily available in insurance billing claims. This diagnosis-based approach found that 90% of US emergency room visits had the same presenting symptoms as the emergency room visits with diagnosis considered primary-care treatable. Because patients make care-seeking decisions based on their symptoms, using a diagnosis-based approach to retrospectively inappropriate visits as a means of determining coverage may be problematic.

Recently Anthem, Inc instituted a policy that will deny coverage and payments for visits to the emergency room that they deem unnecessary. If the final emergency room diagnosis is among a pre-specified list of nonemergent conditions, the insurer will review the emergency visit and may deny patient coverage. In 2017, Anthem implemented this policy in GA, MO, and KY, expanding in 2018 to NH, IN, and OH, and more states are soon to see expansion.

Denial of symptoms visits has the assumption underlying Anthems policy that prior to emergency room evaluation, patients should be able to determine that their symptoms were of a nonemergent condition for which emergency care is not appropriate. [And just how can they do that if they are not medically trained]. To examine the validity of this assumption, the study identified denial symptom visits, defined as all emergency visits by commercially insured adults that share the same primary symptoms or reasons for a visit with the denial diagnosis visits.

The study further examined the policy from a patient’s perspective and identified the most common primary reasons for visits with each presenting symptoms that received emergency room care. Then the study identified the most common reasons for visits among denial symptom visits that were admitted or transferred.

The study found that 2014 to 2015; the years after the ACA included emergency visits were all denial symptom visits. Among the rising health care costs, public and commercial insurers are adopting policies to limit their payments for emergency care. One approach recently implemented by Anthem is to disincentives unnecessary emergency room visits by denying coverage and payments for visits with nonemergent discharge diagnosis.

When a patient becomes acutely ill they must decide whether to seek care based not on a diagnosis but on the symptoms they are experiencing. While clinicians possess the appropriate training to elucidate the care patients need, a diagnosis-based algorithm can’t capture the complexity of these decisions.
Three decades ago managed care organizations and insurers deterred patients from emergency care through a similar strategy of coverage denial and pre-authorization requirements. They used an algorithm that was unable to exclude the presence of severe disease with adequate sensitivity. In response to this, the federal government and the various states themselves passed laws requiring insurers to cover emergency care based on the prudent layperson standard.
This standard says acute symptoms of sufficient severity including pain, such that a prudent layperson could reasonably expect the absence of immediate medical attention. The study concluded that one in six emergency room visits by a commercially insured adult could be denied coverage if the policy of Anthem, Inc is adopted widely. Furthermore, these visits presented with the same spectrum of symptoms as nearly nine out of ten emergency visits (Chou et al, 2018).

Uncertainty surrounds every healthcare decision particularly when it comes to approval and reimbursement decisions for novel medicines. The drug developers decide how much information to collect before submitting for approval. And regulators must decide how much and what kind of information to require before granting approval and market access. Private insurers and other payers for health care services must make a similar decision before deciding which therapies to cover and how to cover them. Both researchers and practitioners have proposed and experimented with strategies for making sound healthcare reimbursement decisions in presence of uncertainty about the clinical benefit.

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At the same time discomfort is growing among clinicians and payers about what they see as a slow decline in the quality of information about new technologies. Pricing and information processing decisions are connected. Some payers make an initial coverage decision based on the final outcome benefit that can be expected. The payer sets a higher threshold if the monetary value of final outcome improvement is relatively low or the reimbursement price of the drug is relatively high (Bognar et al, 2017).

Most psychiatric patients have chronic and recurrent illnesses underlying their acute symptoms that may lead them to episodes of treatment, to be treated successfully and more definitively with psychotherapy most will need more than brief treatment focused primarily on acute presenting problems. Most patients in real-world clinical practice settings require more than a brief course of treatment. these individuals need ongoing psychotherapy or else are at risk of behavior that is destructive and costly both to themselves and society at large.

Insurers who perpetuate stigma against psychotherapy in their concern that readily available outpatient psychotherapy would be overused. A recent study found that when weekly outpatient psychotherapy is fully covered, only 4.3% of the insured population made use of it and the average length of treatment is 11 sessions. With respect to those patients who do in fact need more treatment higher copayments for mental health services to reduce both initial access and treatment intensity of mental health visits? This reduction of care affects patients at all levels of clinical need. Furthermore, the costs of an associated increase in involuntary commitment and acute mental health care exceeded the cost savings from the decline in new mental health visits. Increasing costs to patients reduced access to mental health care and increased costs and morbidity particularly among high-need, vulnerable populations. Poor and very ill psychiatric patients are disproportionately affected by disincentives designed to screen out a hypothetical group of patients who it is thought would capriciously abuse mental health services.

Depression is common and affects one-fifth of Americans at some point in their lives and is a leading cause of world disability. Anxiety disorders are the most common mental health problems affecting 18% of adults yearly. The study found that health insurers are to use equivalent standards to authorize care and provide the same levels of insurance for mental health conditions as they provide for other medical conditions. Nonetheless, health insurers routinely have a much more limited definition of medical necessity for mental health treatment than other medical care. There is clearly a need for policy and regulatory revisions, the right of private legal action of all insurance subscribers and the establishment of true independence for independent review organizations adjudicating appeals of claim denials (Lazar et al, 2018).

Works Cited

American College of Emergency Physicians. (2018). One in six patients could be denied insurance coverage in an emergency if Anthem policy continues to spread, new study shows. https://www.prnewswire.com/news-releases/one-in-six-patients-could-be-denied-insurance-coverage-in-an-emergency-if-anthem-policy-continues-to-spread-new-study-shows-300734470.html

Bognar, K. et al. (2017). The role of imperfect surrogate endpoint information in drug approval and reimbursement decisions. Journal of Health Economics. https://www.sciencedirect.com/science/article/pii/S0167629616304830

Chou, S-C., Gondi, S. & Bker, O. (2018). Analysis of a commercial insurance policy to deny coverage for emergency department visits with nonemergent diagnosis. JAMA Network Open,1(6). https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2707430

Lazar, S.G. et al. (2018). Clinical necessity guidelines for psychotherapy, insurance medical necessity and utilization: Review protocols and mental health parity. Journal of Psychiatric Practice,24(3). Wolters Kluwer. https://static1.squarespace.com/static/5a359731b0786957c0731b13/t/5ae3b56e1ae6cfa83d15b35d/1524872558332/Clinical+Necessity+Guidelines+for+Psychotherapy++for+website+Journal+of+Psychiatric+Practice+2018+April+27%2C+2018.pdf

Lindley, M.C. et al. (2018). Vaccine financing and billing in practices serving adult patients: A follow-up study. Vaccine,36(8). https://www.sciencedirect.com/science/article/pii/S0264410X18300392

Potter, L.M. et al. (2018). Transplant recipients are vulnerable to coverage denial under Medicare Part D. Online Wiley Library-abstract. https://onlinelibrary.wiley.com/doi/pdf/10.1111/ajt.14703