13 January 2012

Washington Medicaid vs Prudent Layperson

Consider this scenario: You are driving down the road and your car is hit from behind. You car, being older, doesn't have the greatest safety features, and the seat back breaks, and your head is wrenched backwards by the force of impact. You feel a sudden sharp pain in your neck, and you are afraid to try to move because you don't know how bad the injury is. The next half hour is a blur. Bystanders and the police keep you in the car, the paramedics come and slap on a collar and strap you to all sorts of devices and next thing you know you are cold and naked under the bright lights of a trauma bay. You are examined, medicated, poked, prodded, scanned and rescanned. Finally, you are told that there doesn't seem to be any serious injury. Eventually, the collar is removed and you are taken off the backboard. You are allowed to go home and over time you recover. You were diagnosed with an acute cervical strain.

According to the State of Washington's Medicaid administrator, the Health Care Authority (HCA), the above scenario represents a non-emergent, inappropriate use of the ER. According to new guidelines they are putting in place, such care will no longer be compensated. Under Federal Law, providers may not attempt to recover monies from Medicaid beneficiaries (not that they have the ability to pay, typically, because they're on Medicaid). So the hospitals and other health care providers are mandated to perform this service for free.

The background here is that last session, the Washington state legislature tried to close the gaping budget deficit with all the subtlety and grace of a machete. They simply directed the HCA to reduce expense in "unnecessary" ER utilization by $72 million. Initially, the HCA tried to make a list of non-emergent diagnoses and issued a rule that if a certain client visited the ER more than three times for non-emergent diagnoses, subsequent visits would not be paid for. The WA healthcare community responded with a lawsuit that was successful in having the rule thrown out on procedural grounds — the HCA had not gone through the required public steps in issuing the rule.

We hoped that this had ended the matter, but the HCA has doubled down. They now intend to simply stop paying for any care in the ER which they determine, after the fact, to have been non-emergent or which could have been delivered in an office setting. This will be determined by a retrospective review of the coded diagnosis. Unlike the previous attempt, there will be no exceptions for children, wards of the state, those presenting via EMS or those referred to the ER by their PCP. The new policy will be effective on the first visit, not the third non-emergent visit. The HCA has decided not to go through the public rule-making process, nor will they apply for a State Plan Amendment with the Federal Center for Medicaid & Medicare Services. They simply decided they had the authority to not pay for things that are not, in their view, emergencies.

Why is this problematic? We all agree that Medicaid patients do overuse & abuse the ER, and for less acute complaints. Isn't it a good thing that the state is finally doing something about it?

The biggest problem is that this policy doesn't actually do anything to keep these patients out of the ER. They pay nothing now, they will pay nothing under the new policy. And it's not like there is a huge network of private docs waiting and eager to accept Medicaid patients in their offices. So they will continue to come, and emergency providers will simply be obligated to care for them without reimbursement. It's a forced cramdown on hospital and physician reimbursement, and other, more urgent, patients will still suffer longer waits because of the ER crowding driven (in some part) by overuse.

The next problem is that the health care community did come to the table with a variety of suggestions to reduce unnecessary ER use, including community care coordination, case management for ultra-high ER users, and better oversight and management of narcotic pain medications prescribed through the ER. Unfortunately, the HCA was not interested in any sort of meaningful collaboration and declined to pursue these suggestions, despite evidence that they would actually have reduced ER use and saved money.

Finally, the concept of retrospective denials is so patently unjust that I'm shocked that they have the gall to propose it. It was a common practice in the '90s for managed care auditors to deny payment for an ER visit for chest pain if the final diagnosis was heartburn. This sort of abusive behavior became so widespread that all 50 states and the federal government now have "Prudent Layperson" laws on the books which dictate that it is the presenting symptom, not the final diagnosis which determines whether it was appropriate for a patient to visit an Emergency Department. These apply to state- and federally-sponsored commercial health plans, but apparently not to Medicaid. The HCA flaunts that exemption in returning to the old days of abusive practices.

This is not over, by any stretch. The healthcare community in WA is fairly galvanized by this threat. It will surely return to the court system. Given the patent unfairness of the proposed policy, and the way in which the HCA simply arrogated themselves the right to make the non-payment decision, I think there's a good chance that it will also be struck down. There is, however, no guarantee.

Strikingly, the person behind this initiative is himself a physician. Jeff Thompson MD, MPH is the medical director and by all accounts has been the driving force behind this policy change. We have expressed our disagreement and concerns about the policy to him personally and in great detail, to no avail. His email address is published on the HCA web site. Perhaps you could contact him directly and let him know what you think of this policy. As always, I would encourage a polite and respectful tone, and bonus points if you live or work in Washington state.


  1. What is the solution to keeping Emergency rooms exclusively for emergencies? Obviously, respiratory distress, cardiac distress, unstoppable bleeding, trauma, unconsciousness, stroke symptoms should all be ER admissions, regardless of the final diagnosis.

    The problem is in our tort system. Legally, an ER would be crazy to turn away a patient, no matter how frivolous and non-emergent their state apparently is, because to do so would open up a path to a lawsuit that would cost more to defend against than it would be to just treat the idiot and send them on their way.

    There needs to be a set of guidelines established, with a certain amount of flexibility, wherein a triage nurse can reject a patient and refer them to a non-emergency facility. This needs to be supported by the courts, with penalties for frivolous lawsuits.

    You and I are on opposite sides of the political spectrum, but I agree that doctors should be making decisions on what is and isn't an emergency, not the government. This will only get worse when the government is responsible for paying for everyone's medical needs.

  2. As far as the root of this policy is concerned, look beyond Dr Thompson as to where this is coming from. Doug Porter, the head of HCA, made it clear years ago when he was 1st hired by then Gov Locke to head the Medicaid division of DSHS;just after being brought on, he clearly and without hesitation stated that he was hired to save money, not people - and that is what he has been and is doing!
    To Scruffy - For some time now various EDs have established triage systems as you have mentioned. The tort system is a bit player in this problem when we look nationwide. A main player in the overuse/misuse of the ED is the structure of our healthcare system;it is structured for daytime use, for people who have a flexible schedule and for children who get sick, for example with ear infections, during the day. Additionally, the majority of missed primary care appointments are between 7:30 and 10 AM adding more unnecessary costs beyond the ED costs What if the primary care system was structured to be open from 10 AM to 10 PM, instead of 8 AM to 5 PM with some additional hours to 8PM in some locations, and on a 7 day schedule, instead of 5 rays? The money now being expended on what some claim are unnecessary ED visits and lost hours due to missed morning appointments would more than pay for an increase in the number of (fairly compensated) primary care providers to cover this.

  3. The car wreck example bothers me because this patient should be covered by car insurance. I suppose its a bit of a stretch to expect a passenger to ask if someone has car insurance before getting in as a passenger but if you're the driver you really should have insurance.

    The problem with the WA law is that federal law requires everyone to be screened. A screening exam often means CAT scan, xray, labs etc. It most certainly means physician exam.

  4. Retroactive decisions to not pay for something because it's not an emergency doesn't seem like a great policy to me. As Scruffy mentions, an ER is basically obligated to treat anyone who walks in the door. It would be much better if Medicaid recipients could be encouraged to not use the ER as their PCP.
    Wrote to Dr. Thompson and my email got bounced back. Do you suppose they shut it off for some reason?

  5. PDX -- good point. It was a contrived example to demonstrate the injustice of retrospective determination of emergency status based on diagnosis.

    But you are right that in most cases auto insurance covers those incidents.

  6. Nice writeup. As to triage, many studies show that triage, even by very capable providers, misses a lot of serious problems that are not so obvious when the patient initially presents to the ED for an evaluation. The major purpose of the Prudent Layperson Standard was to prevent managed care plans from bumping patients out of the ED before they had a chance to get the evaluation they needed to make sure this kind of problem wasn't missed.

    Earlier this month I awarded Dr. Thompson the 2011 Fickle Finger of the Year award for his dubious health policy achievement. He deserved it:


  7. Substitute the word "State" with the word "Federal" and you have what is going to inevitably happen under Obamacare once everyone's coverage is dropped by their employer and they go on Medicaid, er, I mean "exchanges." Bottom line - GOVT NEEDS TO GET OUT OF HEALTHCARE!!!

  8. Having worked in ER and primary care, I would say the vast majority of Medicaid patients would rather be seen in primary care where there is more time with the physician and less delay, and certainly I find it much more rewarding and effective to see the same patients repeatedly, get to see how they respond to treatment, and take the time to educate them about health risks and lifestyle. I find this is -the- most effective way to cut down on unneeded ER visits, and actually more effective for chronic, nonemergent and lifestyle-induced problems. Patients really appreciate a doctor who does a careful history and physical and takes a real interest in their health. However most doctors do not take the time because the financial incentive obviously to see as many patients as possible.

    Patients can easily be seen seven days a week and in evenings if two physicians share the hours in a primary practice, and you can combine appointments and walk-in patients in the same office and eliminate the need for patients to go to the ER because they can't get an appointment.

    But our Florida Medical Association-endorsed governor and legislature are slashing Medicaid and even Kidcare.

    ER docs need to decide. If adequate medical care is the right of every American, we need real universal health care. If medical care is a privilege reserved for those who can pay for it, we need to repeal EMTALA and send everyone home who cannot pay. Either way, we can end ER overcrowding. But if we don't make the choice, patients have no choice, and we should stop complaining if they come to the ER.


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