Retrospective Emergency Department Denials: Treating the Symptom and Ignoring the Causes

Today’s Managing Health Care Costs Indicator is 3

Three states have recently enacted legislation or regulations to deny payment for Medicaid patients who are seen in Emergency Departments (EDs) for problems that are later believed to be non-emergent.  It’s easy to simply stop payment for services that are low value.  However, what our health care system really needs is better access for high value care, not cost shifting to try to prevent low-value care.

Inappropriate use of emergency departments is a common problem – and we think of this as enormously expensive Even adjusting for diagnosis, RAND researchers found that ED visits for four types of upper respiratory infections averaged $570, while office visits with the same diagnoses averaged $110. But that’s the allowed charge. Marginal costs for additional ED visits for minor concerns are actually quite small. (Here’s a post explaining this)

Not paying for ED visits based on after-the-fact diagnosis coding creates serious clinical concerns.  A “prudent layperson” might be pretty worried about chest pain – and might be surprised to get a $500 bill when the discharge diagnosis is “gastroesophageal reflux.”  Or a person with a heart attack might delay coming to an ED for fear that her symptoms weren’t serious enough –and could miss the narrow window to get a clot-busting drug or angioplasty to preserve heart muscle.    
People don’t go to the emergency room, in general, for convenience. They generally go to the ED because they don’t have a good alternative.   This is especially true for patients with Medicaid, who are far less likely to have primary care physicians.  Low Medicaid fee schedules have made access an enormous problem in many states.

Denying payment for ED visits based on discharge diagnosis is merely a cost shift – either to patients , or more likely to EDs and ED physicians, who  have little control over general ambulatory access.   Hospitals increasingly “own” large portions of the delivery system, so it’s reasonable to penalize hospitals which fail to create robust access for patients in their community.

We need new solutions to access – which should include more non-physicians and more tools to help patients evaluate the seriousness of their complaints.  Simply refusing to pay for ED visits without addressing the underlying problem will not lead us to a higher value health care system.