Limiting Emergency Department Denials and Surprise Bills

July 12, 2018 1:20 pm

Revenue cycle leaders can take certain steps to reduce the chance that their patients—and their hospitals—are hit with surprise denials.


Many revenue cycle leaders are taking notice of new health plan policies related to emergency department (ED) services. For example, in several of its markets, Anthem denies claims for services rendered in EDs if the health plan subsequently determines patients’ medical conditions were not emergencies. There are steps revenue cycle leaders can take to reduce the chance that their patients—and their hospitals or health systems—are hit with surprise denials.

In addition to reacting to the policies, they can take a proactive stance and gather information that might convince health plans to change course. Molly Smith, vice president of coverage for the American Hospital Association, encourages hospitals and health systems to document every instance when an ED claim is denied and discuss those with the plan. She says health plans have been responsive if they better understand why the patient came to the ED and the potential harm a denial could create.

Anthem’s Attempt to Reduce ED Use


Anthem introduced the coverage change in parts of Kentucky in late 2015 and has gradually extended the practice to Georgia, Indiana, Missouri, New Hampshire, and Ohio. In a written statement, Anthem said its program “aims to reduce the trend in recent years of inappropriate use of ERs for non-emergencies.”

The policy applies to patients who seek ED care for a situation that Anthem later deems not to be an emergency and had the option of seeking care at a “more appropriate” setting. However, the health plan says it will not deny an ED claim if certain conditions apply.

See related sidebar: Exemptions to Anthem’s ED Policy

In cases in which Anthem considers that patients should not have been treated in EDs:

●       Anthem will request medical records from hospitals as part of initial claims review processes.

●       An Anthem medical director will review claim information submitted by providers using “prudent layperson” standards.

●       If members’ claims are denied, they can appeal.

Stakeholder Response


Anthem’s policy has generated swift and steady protest from healthcare stakeholders. 

Healthcare provider advocates are concerned that policies that discourage ED use in various ways may be contrary to the federal Emergency Medical Treatment & Labor Act (EMTALA), which requires Medicare-participating hospitals to provide medical screening examinations to any person who seeks treatment at an ED and to follow the “ prudent layperson standard ,” as defined by the Centers for Medicare & Medicaid Services: “A request (for emergency care) … would be considered to exist if a prudent layperson observer would believe, based on the individual’s appearance or behavior, that the individual needs examination or treatment for a medical condition.”

“Patients are having to think twice before going to the ED: Is this something that my health insurer will pay for or not?” Smith says. “Our big fear is that they will make decisions to not seek emergency medical care when they really need it. I don’t think the fear is unfounded.”

In mid-March, two U.S. Senators—Claire McCaskill, D-Mo., and Ben Cardin, D-Md.— wroteto U.S. Department of Health and Human Services Secretary Alex Azar expressing their concerns about Anthem’s ED policy. But Smith thinks federal legislation is unlikely because Anthem seems to be limiting the application of its policy to its fully insured lines of business that are regulated at the state level.  

Actions to Take Now


Hospitals and health systems should continue treating patients that come to EDs as they have in the past, Smith says. “Nothing about this policy changes the care providers give in the ED, including the EMTALA screening and stabilizing care,” Smith says. “They will also continue to tell their patients that, if they believe they are having an emergency, they should either call 911 or come to the ED.”  

Document every payment denial under the new policy and share the information not only with Anthem, but also with state regulators.

“It is also very appropriate to be working with the state regulators to make sure they understand what’s happening,” Smith says. “By sharing that information, it could really help state regulators make a decision about whether they feel that greater oversight, or even perhaps prohibition, at the state level is warranted.”

What to consider for future. Hospitals and health systems share with health plans the goal of reducing healthcare costs, which means serving patients in the most appropriate setting for their conditions, Smith says. One strategy implemented by some providers is to co-locate an ED and an urgent care center so that, upon entering the facility, a care coordinator can triage the patient to the right setting.

That is a big undertaking, but one that might improve the value of care, which is an imperative for payers and providers alike. “From my perspective, it seems like a perfect opportunity to work with some of your large payers, because the benefits are mutually shared,” she says. 

See related sidebar: Your To-Do List When Health Plan Contracts Change

Potential for Long-Term Gains

Although stringent health plan ED policies may cause denials and reduced payments in the near term, approaches to tackling the problem may offer benefits in the long-term. Closer monitoring of claims, increased patient education about appropriate locations for types of care, and facility planning that allows for easy access to urgent care centers are actions that can improve future hospital financial health and patient outcomes.


Interviewed for this article:

Molly Smith is vice president of coverage, American Hospital Association, Chicago.

Sandra Wolfskill , FHFMA, is director, Healthcare Finance Policy, Revenue Cycle MAP, HFMA, Westchester, Ill. 



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