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Medical Associations Sue Blue Cross Blue Shield, Anthem Over ER Claims

A controversial policy instituted by Blue Cross Blue Shield of Georgia and parent company Anthem Insurance Cos. denying emergency room claims after the fact faces a legal challenge by two physicians organizations.

The American College of Emergency Physicians and the Medical Association of Georgia have asked a federal judge in Atlanta to compel Blue Cross Blue Shield and Anthem to abandon the policy, which the insurers have also implemented in Missouri, Kentucky, Indiana, New Hampshire and Ohio.

The policy, which the insurers announced last year, allows the companies to reclassify emergency room visits as non-emergency and deny benefits retroactively. The organizations branded the policy as “unfair and illegal,” claiming it violates federal regulations.

“As a result, [medical] providers and patients alike are operating in fear of denial of payment by defendants when patients seek emergency department care,” the lawsuit contends.

The lawsuit centers on a regulatory standard known as the “prudent layperson standard,” which requires insurance companies to cover hospital ER care costs based on a patient’s symptoms rather than their final diagnosis. But according to the physicians groups, Blue Cross Blue Shield and Anthem have compiled a private list of diagnoses its adjusters use in making payment decisions.

That standard defines an emergency medical condition as one with “acute symptoms of sufficient severity (including severe pain) so that a prudent layperson who possesses an average knowledge of health and medicine” could reasonably expect the absence of immediate medical attention would place his or her health in serious jeopardy.

The two physicians groups claim their member doctors have been denied payment for legitimate emergency room care and have had to devote substantial resources to appeals based on denials of reclassified non-emergency claims. The American College of Emergency Physicians, headquartered in Texas, represents more than 38,000 ER doctors and medical students. MAG has 8,000 member physicians.

The lawsuit also claims Blue Cross Blue Shield and Anthem have a private list of diagnoses that its adjusters use in paying or denying claims.

The lawsuit also contends that the company is violating federal civil rights laws because its benefit denials disproportionately affect minorities and women.

“We can’t possibly expect people with no medical expertise to know the difference between something minor or something life-threatening, such as an ovarian cyst versus a burst appendix,” said Dr. Paul Kivela, president of the American College of Emergency Physicians. The medical associations, he said, “have tried multiple times to work with Anthem to express these concerns and urge them to reverse this policy, and they have refused. We felt we had no choice but to take action to protect our patients.”

The companies declined to comment through an Anthem spokesman.

The case has been assigned to Judge Mike Brown of the U.S. District Court for the Northern District of Georgia.

Shortly after Anthem and Blue Cross Blue Shield announced the new policy last year, the American College of Emergency Physicians labeled it “dangerous,” the lawsuit said. The American Medical Association’s executive vice president called on Anthem to rescind the policy, contending that “very ill and vulnerable patients will not seek needed emergency care while, bluntly, their conditions worsen or they die.”

A MAG poll of Georgia physicians revealed that more than 70 percent did not believe the average patient is knowledgeable enough to determine what qualifies as a true medical emergency.

“In an emergency, seconds count,” said MAG president Dr. Frank McDonald. “Even stopping to consider if it’s an emergency could mean the difference between life and death. Patients should never hesitate to seek emergency care out of fear of getting a large bill.”

Anthem’s chief clinical officer, Dr. Craig Samitt, has pushed back, according to the suit. In discussing the medical associations’ concerns, he explained that Anthem was seeing annual increases in what he called “inappropriate emergency department cases.” He declined to share the list of diagnostic codes Anthem had compiled that would trigger a denial of benefits.

In later meetings with medical professionals, Anthem staff acknowledged they were not reviewing medical records before denying claims, and instead were issuing denials based on the claim alone.

The suit claims that Anthem walked back some of its ER policy terms in February, claiming the company was expanding a list of “always pay” exceptions and also requesting medical records before processing a claim. But the lawsuit claims that the tweaked policy remains inconsistent and violates federal regulations.

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