A new law set to take effect in Missouri is meant to counteract a controversial emergency room policy by insurance company Anthem Blue Cross Blue Shield.

Anthem launched its avoidable ER program in July 2017 to cut down on costly emergency room claims it contends are a driver of high premium prices.

Under the policy, the company denies claims when a consumer goes to an emergency room for an ailment Anthem considers not to be an emergency.  The insurer began enforcing the program in July 2017 in Missouri and Georgia, which resulted in a spike in claim denials.

Dave Dillon, the spokesperson for the Missouri Hospital Association, says some of Anthem’s denials have risen to the level of absurdity.

“We had seen people who had been hit by a car, or were in a car accident, were rejected,” said Dillon.   “We had an experience where people were sent from an urgent center that was immediately across the street from a hospital to the hospital and the claim was rejected.  These things were frankly, in light of the situation, ridiculous.”

Missouri’s Democratic Senator Claire McCaskill called for a full review of Anthem practice to deny emergency room coverage.  In December 2017 she wrote a letter to the company, saying it was forcing people to self-diagnose themselves and scaring them away from seeking medical care.

“Patients are not physicians,” said McCaskill.  “I am concerned that Anthem is requiring its patients to act as medical professionals when they are experiencing urgent medical events. Missouri state law and federal law protects patients from having to make these types of medical decisions… Anthem’s policies are discouraging individuals from receiving needed care and treatment out of fear they may personally be fully financially responsible for the cost of treatment, even though they have insurance.”

Republican State Senator Paul Wieland of Imperial sponsored the legislation that creates the new law.  He says it clarifies the state’s “prudent layperson standard”, which already requires health insurance companies to cover visits based on a patient’s symptoms, not just the final diagnosis.

“The bill adds eight words, and it just says, ‘regardless of the final diagnosis given’,” said Weiland.  “So, what this reinforces is that the coverage decision on whether or not the emergency claim will be covered has to do with looking at the front end and not the back end.”

Scott Golden is a spokesperson for Anthem in Missouri.  He says the company’s policy is meant to make health care more affordable by encouraging consumers to receive care in the most appropriate setting.

“Anthem’s avoidable ER program aims to reduce the trend in recent years of inappropriate use of ERs for non-emergencies as the costs of treating non-emergency ailments in the ER has an impact on the cost of healthcare for consumers, employers and the healthcare system as a whole,” said Golden.

A sampling of emergency room bills analyzed by the American College of Emergency Physicians showed that Anthem denied thousands of claims last year under the avoidable E.R. program.

The New York Times reported that emergency room physicians said the company did not routinely request medical records for denied patients, and therefore could not review the symptoms that brought them to the emergency room.  Anthem’s Golden says the company has procedures in place in Missouri that eliminate such oversights.

“If a consumer chooses to receive care for non-emergency ailments at the ER when a more appropriate setting is available, an Anthem medical director will review the claim information and medical records using the prudent layperson standard,” Golden said.  “In the event a member’s claim is denied, they have the right to appeal.”

The prudent layperson standard was made federal law in 1997 as part of the Balanced Budget Act, and it was renewed in the Affordable Care Act. Golden says Anthem is abiding by the new Missouri law’s specific execution of the standard.

“Anthem’s avoidable ER program complies with the recently passed Missouri legislation (SB 982) and we will continue to make enhancements to effectively implement the program.”

Another provision of the new law requires that if an insurance company rejects a claim, it must have a board-certified emergency physician review the denial.

Dillon with the Missouri Hospital Association says the stipulation will ensure proper decisions are made.  “If for example the claim is rejected and the doctor for the insurance company is a podiatrist, and may not be an expert on emergency medicine, that could create some room for rejections that are outside of the scope of the expertise of the physician,” said Dillon.

He notes that the Missouri Hospital Association is joined in opposing Anthem’s avoidable ER program by the American College of Emergency Physicians, the Missouri Medical Association, and the American Heart Association.

Former Governor Eric Greitens signed the new law on his last day in office June 1st.

The chairman of the Missouri House Budget Committee says there’ll be “hell to pay” if a state agency shifts around money to cover a program it had arranged to have vetoed by Governor Mike Parson.

The Department of Health originally sought to discontinue a program to recertify hospitals that treat patients suffering from trauma, strokes and certain heart attacks.  The emergency service is part of the state’s Time Critical Diagnosis (TCD) System that coordinates activity between the 911 response system, ambulance services, and hospitals.

Budget Committee Chair Scott Fitzpatrick claims the shift of funding within the Health Department is unconstitutional because it would illegally move money away from a specific purpose the legislature had already designated it for.  He said the shift also would leave another function of the department underfunded.

During a committee hearing Tuesday, Fitzpatrick warned state Department of Health Director Randall Williams not to attempt such a move.  “You shouldn’t be doing that,” said Fitzpatrick.  “If you do do that, there will be hell to pay.  That is not how this game works, OK?”

The veto, which Governor Parson announced on June 29th, cuts the salaries of three employees who conducted the certifications at the hospital facilities.  The cut amounts about $153,500 out of the Health Department’s budget of $1.4 billion and the overall state budget of $28.65 billion.

Tuesday before the committee, Williams said the agency originally intended to move the responsibility of funding the certification of the hospitals away from the state and over to the hospitals themselves.

Two employees would handle the certification, and their salaries would be funded by a $1,000 fee each hospital would pay to be designated as a stroke, STEMI (heart attack) or trauma center or any combination of any of the three.  Most of the 71 participating hospitals carry two or more designations.  In all, there are 56 stroke centers, 55 STEMI centers and 30 trauma centers for a combined 141 designations.

The plan also included moving from a certification for the designations to accreditation which the hospitals favored because they could handle the process themselves. Williams said he erred in thinking that more hospitals had moved to the accreditation system, which left the department unable to transfer designation approval to the hospitals.

The certification process was suddenly back in the Health Department’s hands, but the veto had cut the $153,500 in salaries for the employees to perform certifications.

The Health Department released a statement Tuesday morning, saying it was committed to having a system in place to make sure hospitals were approved to treat stroke, heart attack, and trauma patients.  But over the prior couple of weeks, it had sent notices to a number of hospitals that their recertification visits had been canceled before reversing itself and rescheduling them.

State Budget Director Dan Haug with the Office of Administration had consulted with the Health Department, informing Director Williams he could reinstate the recertifications and use existing funds within the agency’s budget to cover costs until a permanent fix could be found.

Budget Committee Chair Fitzpatrick sharply disagreed with Haug’s assessment in the committee hearing and became angered.  Haug: “We can run the program until that point.”  Fitzpatrick: “No you can’t, and if you do I am seriously going to become unhinged.” Haug: “I respectfully disagree with that.”  Fitzpatrick: “I don’t respectfully disagree.  I disrespectfully disagree because I am pissed.”

Another committee member, Republican David Wood of Versailles, scolded Health Department Director Williams for trying to engineer funding changes on a whim.

“Nobody in their right mind would go to a car dealer, buy a car, take out a loan, get the car in possession and then go cancel the loan because they have a better way to fund it, and expect the car dealer to let you keep the car,” said Wood.  “We’re not going to let you keep a program that you don’t have a funding source for.”

Fiztpatrick told Williams that the only way to keep the recertification program intact would be for the legislature to override Governor Parson’s veto during the upcoming veto session in September.  The Health Department could also seek funding from lawmakers in the regular legislative session in January.

Williams said the department could delay upcoming certification visits to hospitals until after the veto session without disrupting emergency care.

If, for example, a stroke hospital lost its designation, first responders would have to take patients to the next closest stroke hospital.  Strokes, STEMI, and trauma are all conditions that require quick treatment to avoid devastating health results.

The Missouri House Budget Committee has scheduled a hearing Tuesday morning which could include testimony from hospital administrators who have been chomping at the bit.

Many of these Missouri hospitals are sounding the alarm about a change in Medicaid reimbursements that could leave them struggling to keep their doors open.

The state converted to a managed care system for all adults, children and pregnant women who are Medicaid recipients last year.

A new policy implemented by the state Department of Social Services allows insurance plans to reimburse providers at 90% of the Medicaid managed care rate if the provider is not “in network” with the insurer.

Tim Wolters, director of reimbursement at Citizens Memorial Hospital in southwest Missouri’s Bolivar, says the insurance companies now have an unfair advantage in negotiations over a provider’s network status.

“It’s unfortunate that the state has gotten in between the two parties to the contract, the providers, and the insurance companies,” said Wolters.  “The state stepped in between and sort of tilted the negotiations in favor of the insurance companies.”

The new policy affects reimbursements to providers who care for adults, children and pregnant women who are Medicaid recipients.

A number of hospitals say they were blindsided by the arrangement that state lawmakers incorporated into the Department of Social Services portion of the state budget that was signed by Governor Parson June 29th.  The department held a meeting in the last few days of June to discuss its new policy that went into effect July 1st.

Steven D. Edwards is the President and CEO of CoxHealth, a group of nonprofit hospitals with six locations in southwest Missouri.  He suspects politics may have played a role in creating the new policy.  “There’s a lot of commercial insurance money funding that has gone to various political campaigns, and I can’t help but think that’s probably a factor,” said Edwards.

Three insurance companies have contracted with the state to cover managed care recipients, which before an expansion last year, only applied to individuals living in counties that straddled or were close to the I-70 corridor across Missouri.

Hospitals with a high percentage of patients on Medicaid say they’re feeling especially disadvantaged at the negotiating table.

As of June 29^th, there were 712,335 individuals in the Medicaid managed care system in Missouri. All other eligible recipients – low income disabled and elderly people – still receive benefits through the traditional fee-for-service method.

In a managed care system, insurers receive a monthly fixed payment from the state for each person enrolled in their plans.  Edwards says the only beneficiaries of the policy that allows for lower reimbursements to out of network providers are insurance companies.

“It doesn’t save the state any money because they have a fixed amount they’ve already committed to, to the insurance companies,” said Edwards.  “So, all it really does is make the insurance companies more profitable, in my mind, at the cost of patients, doctors, and hospitals.”

The Department of Social Services says its new policy allowing 90% reimbursements to out of network providers is meant to encourage more providers to participate in the managed care plans.  But providers are quick to point out that every hospital in Missouri has a contract with at least one of the three insurance companies and all but 12 are signed-up with all three.

Hospitals say the policy will hurt their bottom line and cause more doctors to refuse treatment to Medicaid patients.  Dave Dillon with the Missouri Hospital Association says the absence of available physicians will leave managed care patients with few options in certain parts of the state.

“The only option to get care will be to get it in the emergency (room) department, which is for non-emergent care, one of the worst places that you can get health care that is consistent and will keep you out of needing more health care,” said Dillon.

Physicians already receive a much lower rate of pay from Medicaid than they do from traditional employer-provided insurance plans.  Dillon thinks cutting those already low reimbursements by 10 percent will only drive doctors away in bigger numbers.

“There’s nothing requiring that doctor to participate in the program,” Dillon said.  “They can easily walk away and say, ‘I’m not going to take any more Medicaid enrollees.”

Individuals under managed care have the option to choose from either Home State Health Plan (Centene), UnitedHealthcare or WellCare.

Most hospitals in Missouri are not-for-profit operations, and rural hospitals are especially susceptible to financial setbacks.  Wolters of Citizens Memorial in Bolivar says 70% of his rural hospital’s patients have some sort of government coverage such as Medicaid.

He contends the new reimbursement policy could put Citizens Memorial in a risky financial position.  “For our last year, our bottom line was only $1.6 million,” said Wolters.  “That’s a margin of about 1.2%, a minor, very modest margin.  But if we lost 10% of our Medicaid managed care money, that would be about $1 million, over half our bottom line.”

Four rural Missouri hospitals have closed in the past eight years, with one having done so last month. Twin Rivers Regional Medical Center in Kennett, which shut its doors on June 11th, joined Parkland Health Center-Weber Road (Farmington), Sac-Osage Hospital (Osceola), and SoutheastHealth Center of Reynolds County (Ellington) as rural hospitals in the state that have closed since 2010.  According to the North Carolina Rural Health Research Program at the University of North Carolina at Chapel Hill, 85 rural hospitals have closed nationally since 2010.

The new Medicaid reimbursement policy for out of network providers does not apply to local public health agency services and specialty pediatric hospital services.

Medicaid is a federal healthcare program for low-income individuals that states are also required to help subsidize.  The state contributions vary from state-to-state, but federal support is higher in those that have higher poverty levels.  The federal government covers 64.6% of Medicaid costs in Missouri, where roughly 1/6 of the state’s 6 million residents are on the program.

Missouri is also unique in that hospitals pay a tax that helps pay for the state’s portion of Medicaid costs.