Insurance Companies Force FSEDs Out of Network and Shift Costs to Patients
Monday, April 17, 2017
by Gillian R. Schmitz, MD, FACEP, John Dayton, MD, FACEP, Carrie DeMoor, MD, FACEP, Erin Simon, DO, FACEP, Allison Haddock, MD, FACEP
There has been a lot of media attention to “surprise bills” that patients receive after visiting an emergency department. Insurance companies have tried to discourage patients from using free standing emergency departments (FSEDs) and claim they drive up health care costs because they are often out of network. It is unclear what percentage of independent free standing ERs are in-network and more importantly, why they are out of network.
In-network contracting allows insurance companies and physicians to come to an agreement about payment for services rendered and reduces the amount the patient is responsible for. When insurance companies and physicians are unable to come to an agreement, patients get caught in the middle and can be held responsible for a larger share of the health care cost. Although legislation has been enacted in Texas that allows for mediation and patient protection from large bills, it does not address a long-term solution for ensuring health plans and providers can negotiate in good faith or control for escalating costs of insurance premiums and deductibles.
Limiting the numbers of providers that insurance companies are willing to contract with limits access for patient care. This is especially true for emergency care. Patients should not have to worry about cost when they are having an emergency. Finding an in-network emergency physician is becoming increasingly more difficult, especially amongst FSEDs. This is the first study to determine barriers to in-network contracting in independent free standing emergency departments.
An anonymous survey was created and piloted amongst members of the American College of Emergency Physicians (ACEP). Quantitative and qualitative data were collected with regards to contracting status with insurance companies and barriers to successful negotiation. After feedback from pilot members, the survey was modified and sent out anonymously through an email link to medical directors from each physician owned independent free standing emergency department in Texas.
Medical directors were queried about current contracts with Blue Cross Blue Shield (BCBS), Aetna, United Health Care, Cigna, Baylor Scott and White, Molina, or other specified providers for their emergency department. The survey sought to determine how many facilities had in-network contracts with insurance companies for both professional fees and facility fees. Medical directors were then queried about how many insurance companies had reached out to them to contract for services, responses from health plans when providers initiated contact, and barriers to successful negotiations. Follow up questions determined which free standing facilities had a hybrid model with an associated urgent care. For those who had urgent cares, the survey asked which facilities were able to obtain contracts for the urgent care side.
Twenty five of 38 physician groups responded to the survey (66%), representing 102/197 (52%) of independent FSEDs in Texas. Eighty percent of independent FSEDs were not in-network for either physician or facility fees.
Sixty four percent of FSEDs stated they had not been contacted by a health plan to contract or had not received a return phone call after multiple attempts. For those who were able to get in touch with the insurance companies, failure to reach an agreement on in-network status occurred because the rates offered were unreasonably low (45%), the insurance company was not willing to offer them ANY rate (27%), the insurance company did want to contract with FSEDs (41%), and the physician group did not want to contract (5%). Twenty four percent of independent FSEDs also own an urgent care. Of those who had a hybrid model, 84% were able to negotiate in-network rates for their urgent care but only 33% were able to reach in-network status for their ED.
Despite an overwhelming desire of FSEDs to be in-network, only 20% of those surveyed were able to secure in-network contracts. The most common reason FSEDs are not in-network is that insurance companies would not contact FSEDs, ignored repeated attempts of providers to negotiate, or offered unreasonably low rates.
Health plans need to be held accountable for negotiating in good faith, offering reasonable in-network rates, and providing adequate networks of care. Failure to do so shifts costs to patients seeking care.
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