Washington state ER docs file lawsuit against new Medicaid plan

Emergency physicians in Washington state have filed a lawsuit against a state plan to limit payment for Medicaid visits to three "non-emergency" visits to emergency departments each year. The plan would also classify more than 700 diagnoses as "non-emergent," including chest pain, abdominal pain, miscarriage and breathing problems.

"This list of non-emergent diagnoses puts patients in danger and unfairly targets the poor and those in most need of care," said Stephen Anderson, MD, president of the Washington Chapter of the American College of Emergency Physicians in a press release announcing the lawsuit.  "We understand that our state Medicaid office is working with 19 other states to develop this policy. If this plan goes into effect, other states will certainly follow suit."

The Washington State Health Care Authority (HCA) announced its new payment rules for the 2011-2013 biennium late last month and also its new policy on non-emergency use of ERs, which was mandated under the budget passed by the state legislature.

[See also: Washington State limits emergency department visits for Medicaid patients; More seniors with mental health issues ending up in the ER]

According to HCA, the state spent around $98 million for nearly 328,000 fee-for-service ER visits last year. The legislature estimated that limiting ER use for non-emergency care could save the state $35 million a year.

The policy is set to begin Oct. 1 and the first three-visit limit period will run through June 30, 2012. Medicaid recipients who reach their third visit will be notified by letter and warned that additional non-emergency visits will be the client's financial responsibility. Additional mailings will target the program's high utilizer patients, including those who exceeded three visits last year.

"This is a realistic strategy to change clients' behavior and improve patient care as well as assure taxpayers that we are addressing the state's continuing financial crisis," said Doug Porter, HCA director. "Non-emergency issues and chronic conditions should be treated by a primary care provider, not by an expensive visit to hospital Emergency Rooms."

But the Washington Chapter of the American College of Emergency Physicians doesn't see it that way. It said the basis for the lawsuit is multi-factorial and adds that the state:

• has not implemented a rulemaking process that included stakeholder comments; yet the plan is being forced on hospitals and providers with no warning;
• has violated the requirements that this be a collaborative process as outlined by the legislature;
• has violated the requirements that this be a list of non-emergent diagnoses as outlined by the state legislature;
• has misconstrued the ability to bill patients for services. Federal law prevents physicians from meeting Medicaid requirements for billing patients through EMTALA, and state law blocks hospitals from billing under charity requirements; and
• is violating the federal Prudent Layperson standard by applying it to managed care patients.

"The average number of emergency visits for Medicaid patients affected by this requirement is about 4.5 visits per year, not the 30 plus that the state eludes to," added Anderson. "Physicians in the state have offered to work with state officials to come up with a list of truly non-emergent conditions. We truly want to work together to help reduce healthcare costs, but we must protect patients from harm."

But Jeffery Thompson, MD, Medicaid's Chief Medical Officer, said the state did seek the input of hospitals and providers across the state as it worked to refine the list of more than 700 non-emergency billing codes.

In addition, the three-visit limit would not apply in the following situations:

• Children placed by the department in out-of-home care with foster parents, relatives or other caregivers
• Clients delivered to the Emergency Room by ambulance, police or EMTs.
• Visits for mental health diagnoses or for clients seeking detoxification services
• Visits that result in an inpatient admission, emergency surgery or admission for observation.

The program also created an exception to the rule process by which hospitals can appeal non-emergency billings on the grounds of special circumstances.

"In point of fact, 97 percent of our clients can live very comfortably with this three-visit limit," said Thompson. "The small number who exceed that limit are responsible for scores of visits – and most of them are for chronic conditions and complaints of pain – visits that usually end with a narcotics script. Providers and clients should recognize that the Emergency Room is not the place to treat non-emergencies and chronic conditions. These will be handled more cost-effectively and improved care by primary care providers."

Thompson also noted that some groups, prior to the current lawsuit, raised concerns that the new rules will endanger the health of Medicaid members, though he feels these opponents have also used scare tactics to make their point.

"For example, they have pointed out that a code for 'chest pains' still is on the list," he said, "but they don't point out that the code is chest pains not related to a cardiac event."