15 September 2011

This is what health care rationing looks like

The legislature in Washington State, like so many others, had a multi-billion dollar budget shortfall to fill this year due to the ongoing recession.  Like others, it looked at the Medicaid program as a place where money needed to be cut from the budget.  However, in what I believe to be a first in the nation (for now) approach, they directed the state Health Care Authority to find $72 million in savings specifically from Emergency Department utilization, and more specifically from those patients who over utilize the ED for non-emergent medical care.

The statutory language reads:

Emergency room visits in the Medicaid program will be limited to three non-emergent visits per year. The WSMA and the WSHA will be included in developing the criteria for defining non-emergent.  [...] The department shall collaborate closely with the Washington state hospital and medical associations in identification of the diagnostic codes and retroactive review procedures that will be used to determine whether an emergency room visit is a nonemergency condition to assure that conditions that require emergency treatment continue to be covered.
That doesn't sound too unreasonable, does it? Anybody who has ever been in the ER knows well that Medicaid patients come back again and again, and often for trivial or routine complaints. So the plan was to generate a list of agreed-upon non-emergent diagnoses and simply not pay for them after the third such visit.

It's sadly predictable what happened next. The HCA had been set a hard target of cost savings -- $72 million -- that they were mandated to achieve. They looked at the universe of true frequent flyers and their complaints and realized that they were not going to get to their goal by denying payment for the runny noses and toothaches that comprise the majority of non-emergent medicaid visits. So they expanded their definition of non-emergent diagnoses, and recalculated the savings. It wasn't enough, so they expanded the list of "non-emergent" diagnoses further yet, and again and again until they got the dollar figure they wanted.

The list, as it currently exists, consists of about 750 so-called "non-emergent" diagnoses established in the ER, for which the state will not pay, including such trivial, routine, and non-emergent conditions as:

Viral infection NOS
Viral enteritis
Strep throat
Migraine headache

OK, I can get behind those as non-emergency ER conditions. I'd quite like to see those folks re-routed to clinics or PCPs. But wait, there's more! Other "Non-emergent conditions" for which the state will not pay include:

Chest Pain
Abdominal Pain
Asthma Exacerbation (acute)
Acute Cholecystitis
Hypoglycemic Coma
Pneumococcal Pneumonia
Pseudonomal Pneumonia
Calculus of Ureter (i.e. kidney stone)
Syncope and collapse
Salmonella Enteritis
Streptococcal Septicemia

I shit you not. There are many others -- these are just the most ridiculous "non-emergency" conditions that jumped out at me. It's also manifestly arbitrary and haphazard what made it onto the list and what did not. The HCA considers "Cholelithiasis with acute Cholecystitis" an emergency condition worth paying for, but "Acute Cholecystitis" is not. The state will pay for hand cellulitis, but not for the more dangerous foot cellulitis. All diagnosis codes which are "Sprains" or "Contusions" are denied, across the board.

For the record, the HCA did collaborate with the health community in that they met with physician and hospital groups, listened politely, and produced the diagnosis list unilaterally. Though the physician groups had many ideas for saving money such as case management, generic prescription utilization, and other ideas, they were rejected as outside of the statutory language of the budget. No mechanism was identified by which patients could be redirected to clinics, nor was there any allowance for the fact that trauma patients do not know in advance whether their injuries are fractures or sprains.

The idea, should this go into effect as planned, was that patients would redirect their care back to clinics and primary care providers. It's not going to happen, of course. Primary care, and especially urgent care, for medicaid patients essentially does not exist, not in any meaningful way. Sure, there are charity clinics and community health centers, but they are grossly oversubscribed and the access is minimal for acute or otherwise unscheduled care. The ERs remain open 24/7, and thanks to EMTALA, we cannot send patients away unseen. Sure, it's possible to do a medical screening exam at triage and deny non-emergent cases, but that's a liability nightmare, and would probably be a de facto violation of EMTALA if that was only done for medicaid players. (Though I am not a lawyer.)

There is no way, actually, to even know in real time if a medicaid patient presenting with a non-urgent complaint is one of the few who have met their three-visit limit. (97% of medicaid patients in this state visit the ER less than or equal to two times annually.) The ER doc and hospital will only find out after the fact when the claim is denied. Technically, we can bill the patient but that is a fig leaf because of course a medicaid patient won't be able to (or care to) pay cash for their ER visit.

There are so many things wrong with this that it's hard to know where to start.  Of course, it's primarily a cramdown for providers. The state just decided not to pay for a certain arbitrary list of things, and docs and hospitals have no idea which patients that will apply to and no choice but to provide the services anyway. Which is in a way, nothing new, since we've dealt with the unfunded mandate of EMTALA for three decades. What is new, and troublesome, is that the non-payment will be decided after the fact based on an arbitrary and wrong list of diagnosis codes. This is not entirely new -- it's what went on in the '90s and resulted in Congress passing the prudent layperson standard, which essentially ended such practices. However, it's new in that this is the first time a governmental payer has tried this particular stunt, and I have a feeling that a lot of DHSH directors in other states will be carefully watching this experiment so see if it takes. If it does, this may be our future once again.

So look closely, my friends. Rationing is here, not covert rationing, but open and unapologetic rationing. It may be blocked before it goes into effect; I hope it is. If not, look for it to be coming to a town near you real soon.


  1. How soon after treatment are the hospitals required to bill medicare? Don't the hospitals have an incentive to identify frequent fliers and delay billing for those patients until more expensive treatments are administered?

    It would make sense to withhold billing on some minor illnesses in lieu of the possibility of billing for a major treatment later on. The hospital could still deny treatment for minor presentations after three, but still treat (and bill) later on if a major illness occurs.

    If billing delay is allowed, the state will not save as much as they think.

  2. Johnny Urologist9/15/2011 2:19 PM

    May I sincerely wish that that each and every legislator who might vote to approve this list be visited with an acute calculus of the ureter at midnight on a Saturday. Not a large stone -- 3mm will do -- one that will have a 90% likelihood of passing spontaneously without need of my professional services, yet causes an excruciating "10 out of 10" amount of pain that only a nice bolus of IV analgesics will bring under control. Then ask them if their pain constituted an "emergency"?

  3. happily dr. meat/shadowfax's nightmare vision of rationing need not inform how it is done in any other jurisdiction, whether state or federal.

    And if he, or you, dear reader, believe that the State of Washington's budget "solution" is the ONLY way that health care is currently rationed, or may be, you are well advised to seek psychiatric care.

  4. Dude, seriously?

    Given the hilarious list of excluded diagnoses, why don't they just say that they'll pay for only three visits total, all diagnoses included, no matter what they're for, and everything else = you're paying. If chest pain and septicemia are going to be on there, may as well put everything on there and just cap it out at three visits/year.

    Truly, Medicaid is generally a program used by able-bodied women and children, and these people shouldn't need the ER at all, let alone > 3 times per year.

    For the elderly/disabled on Medicaid, there should be an exception to the > 3 times/year, but whatever.

  5. Technically, we can bill the patient but that is a fig leaf because of course a medicaid patient won't be able to (or care to) pay cash for their ER visit.

    Isn't it illegal to "balance bill" for Medicaid patients? Like if they're on their 20th visit for back pain this year and it's not paid for like the previous 17 visits, you can't even send them a bill? Medicaid is supposed to be "payment in full"...even if the payment is zero?

    Not that any Medicaideurs will send any money, but it's outright silly if the state won't pay and ERs aren't even allowed to send a bill to try to collect even $10-$20?

  6. No one would do this, but if anyone presents with a chief complaint from the nonemergent list just send them through the revolving doors. Chest pain; the state says that is not emergent go somewhere else buddy.

  7. Given the amount of grumbling, complaining and fear mongering about the state of health care here in Canada recently, I sincerely hope our legislators use a little more common sense than was displayed here.
    Of course one of the problems most in the limelight is ER wait times, and I don't know if I can think of a more effective way of reducing them...

  8. The target of this legislation is not medicaid frequent flyers, it is hospitals and physicians. Do not think for a moment that you as a physician have any legal leg to stand on in denying these patients care, EMTALA is still in force. The patients have no reason to alter their behaviour.
    This legislation conscripts physicians to (even more) unpaid labor, you MUST see and treat these patients, but you will not be paid for it.
    This is a 72million dollar tax on hospitals and physicians.

  9. Shadowfax -

    Boy, no payment for chest pain? So glad the government just launched it's ad campaign to raise awareness about the symptoms of heart disease and stroke!

    Best of luck out there!

  10. It's from the government. It doesn't have to make sense.

  11. Of course the obvious question is how do you know its an emergency or not until you've done a work up?

    The providers are going to have to sue. You can't turn a chest pain away because he's already had his 3 visits.

    If the feds say you have to see the patient the state will have a hard time defending their refusal to pay.

  12. Wow. This is shockingly stupid, even for Olympia.

    If (large suburban medical center) thinks they are in the hole now because of charity care, just wait till this takes effect.

  13. And you honestly think that NONE of this will happen with the unACA, henceforth referred to appropriately as Obamacare. So a physician panel will be set up to help regulate what will be paid for and what will not. Except in Washington, physician input appears to mean nothing. But I'm sure when Obamacare kicks in, rationing will NEVER happen with physicians on the federal panel, because that is somehow different.

    You liberal physicians are complete hypocrites. Rationing is bad on a state level, but ok on the federal level, because the almighty One, Obama, has made one step closer to the holy grail of government controlled medicine. Oh yeah, and he wants to increase your taxes if you make over $200,000/yr (as per the AJA). How in the world can any physician support a president who wants to have lawyers/bureaucrats control medicine, take your money, and squash any motivation for individual hard work. I'll never understand it.

  14. Dear anonymous, if having any income over a certain amount taxed at a few percents higher a rate squashes your motivation to work, you weren't very motivated to begin with, now were you?

  15. Nurse K ... don't know about other states but in OK not only can they bill you for a denied claim, they can bill you for unpaid portion. (they just have to work out a payment plan the person can afford .. and the person must pay at least $25 a month on the bill or they can be turned into collection agency)

    They will not pay for a 'non emergent' : broken bone, acute asthma attack, respiratory crisis, virus, bacterial infection, MRSA, dehydration, car accident ... the question then becomes "What is an emergency?"

    If you walk in .. you're not an emergency ... if you take an ambulance, you might be, but if it's not you get the ER bill AND the ambulance bill ...

  16. Myles from nowhere9/24/2011 2:06 PM

    Great bog. This is a complicated issue, so it is not surprising that several of these comments reflect some misunderstanding of the dilemma this bill and resulting Medicaid policy in Washington creates. It is true that as long as emergency physicians and hospitals and ED on-call specialists are obligated by EMTALA to provide care to these patients, even if payment is withheld by the state; health care is not really being rationed directly. These patients, many of whom are potentially very, very sick, will still get the care they need. However, EMTALA is, as noted, an unfunded mandate, meaning that EDs and emergency care providers have to find the financial resources to cover the cost of this care from somewhere in order to meet the mission of providing emergency care to everyone, regardless of ability to pay (and yes, this includes the undocumented aliens who labor in WA fields sustaining the state's agricultural economy).

    If the state declines to pay for this medically necessary care, these costs must be shifted to the insured. Since health plans now push back on this cost-shifting (as one Health Plan executive said: "the uninsured are not OUR problem"), and governments continue to reduce Medicaid reimbursement to providers, and the number of uninsured keeps rising, and the number of specialists willing to participate in ED on-call rosters keeps falling, and there is a severe national shortage of emergency physicians: this is why this non-payment policy in WA will result in rationing. This rationing comes into play in the following ways: ED closures, longer waiting times to see an ED physician, more ambulance diversions away from the closest hospital, more patient transfers to other hospitals far from home, more suffering and pain for patients coming to the ED, more delays in critically important care, and more unnecessary death and disability - not just for the uninsured or for Medicaid patients, but for EVERYONE, especially in the inner cities and in rural Washington. A totally irrational way of rationing care.

    If you are looking to save money in health care (and we must); trying to punish Medicaid patients for over-reliance on the ED by refusing to pay emergency care providers for providing life-saving care to very sick patients is not just incredibly stupid, it is dangerous. There are many, many other ways to reduce the cost of the Medicaid program that have far fewer adverse consequences and far greater overall savings potential, without threatening the financial viability of an already overburdened emergency care safety net that we all rely on.

  17. Medicaid won't pay for chest pain? Wake up! Good old Macy's won't pay for an ER visit for chest pain or anything else for that matter.

    This is thanks to Federal Law that exempts self-funded plans from state law regarding such basics as life saving care, the prudent layperson law definition of an emergency, etc. If you don't know whether you are covered by a self-funded plan you'd better ask because more than half of American are now - and then study up on ERISA law because your state law won't protect you.

    Macy's/Federated Department Store employees, hard-working retail employees right here in America don't have any ER coverage at all! Not really, not someone at Macy's decides on a personal case by case basis to grant it. I have been screaming about this for 2 years and I can't believe it's legal but their attitude is so sue me.

    See, Macy's has a rule that they will not pay any ER claim unless that ER visit resulted in an a full INPATIENT admission. Need 24 hours in a observation telemetry bed to have your MI ruled out? Fine but don't expect Macy's health plan to pay the bill. And don't expect the hospital to put you in an inpatient bed if it's not appropriate because Macy's will deny that too. Macy's plan reps have told me that Macy's will only cover ER visits for only a handful of diagnoses: intractable seizures (ongoing), unstoppable hemorrhage, MI (confirmed), and fractures with bones sticking out of your skin. I haven't asked or seen such a claim yet but they MIGHT just pay the claim if the patient dies in the ER.

    I work on these kind of denials all day long and I know that hospital ER bills are never paid separately, that the cost is "rolled in" (read written off) to the inpatient claim if the patient is admitted and the hospital gets a flat according to the diagnosis (DRG rate for those in the know), ergo, Macy's does not cover ER visits or observation stays that result from an ER visit. They do cover emergency admissions to the hospital and there's a world of difference. The ploy is called deterrence. They can't require members to call and get permission to go to the ER because that's been against Federal law for some time now. But they do want to discourage their employees from going to the ER. So they have devised a nifty run around the law by telling Anthem BC/BS, the health plan administrator to just deny these claims and tell the member they have to appeal. Macy's employees are required to file an appeal themselves - Macy's won't allow the hospital appeal - to get their ER claims and observation stays covered. And if the patient doesn't win the appeal then the law says the member can sue them. So sue them somebody, please.

    And don't think it's not contagious! My own health care system tried this for 3 months - it was called "an HR administrative error" after one of the execs ended up in the ER and got sent home.

    If Macy's or Medicaid or Joe Blow doesn't pay - does anybody out there really believe the rest of us aren't picking up the tab?

    But as my rational born-again neocon brother says in response: "We don't want Obamacare because the way things are NOW we don't FEEL like we are paying."

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