Ensure Access to Emergency Care, Protect the Prudent Layperson Standard and Delay the ER Utilization Program

We are writing today in opposition to the implementation of the ER Utilization program. We strongly believe, with our understanding from previous CMS guidance, quoted later in this letter, that the Prudent Layperson Standard obligates Medicaid programs and managed care organizations (MCOs) to reimburse doctors and hospitals for the delivery of emergency medical care based on presenting symptoms and NOT using diagnosis lists. To that end, we believe this ER Utilization program would be inconsistent with the federal and state PLP standard and CMS policy.  We have asked for an official opinion from CMS and await their interpretation of this new Virginia policy. 

Not only do we believe this program to be inconsistent with CMS policy, but we also believe it will result in access issues and a continuation of health disparities. Such dramatically reduced payments will result in fewer physicians in the ER and much longer wait times, specifically in urban and rural hospitals, which have a higher percentage of Medicaid patients. Underrepresented minorities have always lacked access to health care and suffered the worst health care outcomes in the United States. This problem was made worse in the COVID-19 pandemic. Even more concerning, is that minorities in the U.S. disproportionately have higher rates of co-morbidities that increase risk factors for COVID-19 (obesity, lung disease, diabetes, hypertension, and other immune-compromising diseases). Many of those conditions are on the “preventable” ER code diagnosis list. 

The “ER Utilization Program” contained in Virginia’s biennial budget is designed to retroactively reduce Medicaid reimbursements for emergency care services deemed after the fact to be “preventable” based on diagnosis codes: 

The Department of Medical Assistance Services shall amend the State Plan for Medical Assistance Services to allow the pending, reviewing and the reducing of fees for avoidable emergency room claims for codes 99282, 99283 and 99284, both physician and facility. The department shall utilize the avoidable emergency room diagnosis code list currently used for Managed Care Organization clinical efficiency rate adjustments. If the emergency room claim is identified as a preventable emergency room diagnosis, the department shall direct the Managed Care Organizations to default to the payment amount for code 99281, commensurate with the acuity of the visit.[1]

We hope that the ER Utilization program will be delayed and NOT be implemented on July 1, 2020.  We do not believe that basing all payments for any 99282, 99283 and 99284 claims submitted on whether they are on the Low Acuity Non-Emergent ER Diagnosis Code List is allowable, never mind automatically down coding and paying them at a 99281 claim of $14.97. The list includes 789 ICD codes, many of which may have been “preventable” with appropriate primary care intervention, but by the time they present in the ED, they are often true emergencies.  

In late 2017, three emergency medicine groups in Kansas wrote to CMS with similar concerns about their KanCare program’s retroactive denials and reduced payments for emergency services. In their letter, they specifically remark on using diagnosis lists for determining payment and referred to a CMS Final 2016 Medicaid Managed Care Rule that stated: 

Regarding the PLP requirements of the BBA of 1997 and the use of approved lists of emergency diagnosis codes, we remind commenters that consistent with our discussion in the 2002 managed care final rule at 67 FR 41028–41031, we prohibit the use of codes (either symptoms or final diagnosis) for denying claims because we believe there is no way a list can capture every scenario that could indicate an emergency medical condition under the BBA provisions. ... While this [PLP] standard encompasses clinical emergencies, it also clearly requires managed care plans and states to base coverage decisions for emergency services on the apparent severity of the symptoms at the time of presentation, and to cover examinations when the presenting symptoms are of sufficient severity to constitute an emergency medical condition in the judgment of a prudent layperson. The final determination of coverage and payment must be made taking into account the presenting symptoms rather than the final diagnosis. The purpose of this rule is to ensure that enrollees have unfettered access to health care for emergency medical conditions, and that providers of emergency services receive payment for those claims meeting that definition without having to navigate through unreasonable administrative burdens.^[2](emphasis added)

In a letter back, signed by CMS Administrator Seema Verma, CMS confirmed this continued to be their position and in the interim, KanCare had already changed their policy to no longer allow down-coding of emergency service claims. Administrator Verma referred to guidance issued by a CMS State Medicaid Director letter issued April 18, 2000 that was clear and remains in effect: 

“The determination of whether prudent layperson standard is met must be made on a case-by-case basis… Whenever a payer (whether an MCO or a State) denies coverage or modifies a claim for payment, the determination of whether the prudent layperson standard has been met must be based on all pertinent documentation, must be focused on the presenting symptoms (and not on the final diagnosis), and must take into account that the decision to seek emergency services was made by a prudent layperson (rather than a medical professional).”[3]

Patients should not be put in a position where they are expected to self-diagnose and determine whether or not an emergency condition exists before being seen by a medical professional. Even health professionals are frequently unable to determine if an emergency condition exists until after a thorough history, exam and diagnostic evaluation has been completed. As such, CMS has correctly stated that the “final determination of coverage and payment must be made taking into account the presenting symptoms rather than the final diagnosis.” 

A Centers for Medicare & Medicaid Services CMCS Informational Bulletin from then Director, Cindy Mann, in January 16, 2014, also underscores an additional concern. The Bulletin addresses the potential that these methodologies intended to affect provider or beneficiary behavior can create provider EMTALA compliance issues.  The study also casts doubt of the validity of any such methodologies and highlights studies finding significant overlap between emergencies and non-emergencies whether using presenting complaints or discharge diagnosis as the tool for differentiation and suggesting that higher utilization may be in part due to unmet health needs and a lack of access to appropriate settings.  The Bulletin ultimately concludes that: 

“experience and research suggests that narrow strategies to reduce ED usage by attempting to distinguish need on a case by case basis have had limited success in reducing expenditures due in part to the very reasons for higher rates of utilization by Medicaid beneficiaries inducing unmet multiple health needs and the limited availability to alternative health care services.”[4]

We ask DMAS to look closely at current CMS guidance and delay the implementation of the program, honor the prudent layperson standard when reimbursing for Medicaid visits to the emergency department and halt the practice of making payment determinations based on diagnosis list or the final diagnosis.