Senator Probes ER Management Company for Pricing Gouging, Contributing to Balance Billing Problem

The billing practices of emergency rooms (ERs) run by EmCare (Envision Healthcare and its subsidiary EmCare Holdings, Inc.) are under the microscope. Following a rash of consumer complaints and public reports supporting allegations that they gouged consumers and pressured doctors to order expensive, unneeded tests, Sen. Claire McCaskill (D-MO) has sent a strongly-worded letter to Christopher Holden, President and CEO of Envision, looking for answers. From her letter:

“Public reports indicate that as EmCare has expanded its work, costs to consumers have increased significantly without corresponding increases in the quality of care.” It continues, “…under the hospital’s previous physicians, patients that received ER care with the highest-level billing code were charged $467. The rate more than tripled to $1,649 for similarly complex services under EmCare management.”

EmCare is also said to have negotiated rates with several major insurers, but stopped short of signing contracts, and so was able to charge higher prices directly to patients. Senator McCaskill has asked EmCare to respond by October 11, 2017 (tomorrow) with information detailing five years of accounting for:

1. The number of hospitals with which EmCare has contracts to manage emergency department services
2. Data to substantiate what percentage of ED visits delivered by EmCare doctors to privately insured patients were billed as out-of-network charges
3. The number of complaints received by Envision or EmCare regarding cost or care concerns for ED services
4. The percentage of cases delivered to privately insured patients that were charged above and beyond their standard deductible or co-payment
5. The bonus and incentives given to docs related to lab testing and imaging, patient admission and other relative value units (RVUs)

iA Perspective

Missouri is already hurting from a balance billing and uncompensated care perspective. It’s one of the states with virtually no balance billing protection for consumers, even for ER care. While a federal rule to help consumers navigate balance billing issues would be useful, at the moment, balance billing legislation is left to the states. Most still don’t protect consumers comprehensively from balance billing.

To top it off, two of Missouri’s largest insurers have changed the way they handle ER charges. UnitedHealthCare, for example, which covers a good quarter of the state’s insured residents, changed the way it handles balance bills in Missouri in 2015. That year, the insurer declined to pay for services rendered by some ER doctors even though they work for in-network hospitals. Other insurers followed suit.

Prior, UnitedHealthCare had paid on almost the entire bill for ER services provided at in-network hospitals. It now pays only the prevailing out-of-network rate, leaving the balance bill to patients. Physicians (in their own struggle to get paid) are avoiding insurance networks because they know they can charge high reimbursement levels. Not wanting to be left with the expense, UnitedHealthCare changed its policy around paying out-of-network ER bills. The problem became a consumer problem, and a hospital revenue cycle problem, because the risk of aging and unpaid A/R is crushing hospital systems and eating margins. While this policy change didn’t affect those with individual plans or self-insured employer plans, it did leave many Missourians exposed to potentially devastating balance bills.

This is at least mitigated by the new credit reporting rule for medical accounts. Starting September 15, 2017, the Credit Reporting Agencies (CRAs) now require that a furnisher not report a medical account on a consumer’s Credit Bureau Report (CBR) that is less than 180 days old. This will allow time for disputes and delayed payments to shake out. Still, massive ER bills with no viable payer are a profound problem with far-reaching implications for the hospital revenue cycle.

Senator McCaskill, aware of EmCare’s growing footprint and the impact of high ER balance bills on consumers, wants Congress to understand how pricing practices are changing, and find ways to address the problem. Read the press release from McCaskill’s office on the situation here. insideARM will report on any response from Envision’s CEO.