Congress Looks Again at "Prudent Layperson" Legislation
Congress Looks Again at "Prudent Layperson" Legislation
"Cardin II" would eliminate prior authorization requirements, provide a framework for communication between emergency physicians and managed care
Leaders in emergency medicine are optimistic about the re-introduction of proposed federal legislation that would eliminate prior authorization requirements for ED visits and say this proposal is the beginning of a new era of communication and cooperation between providers of emergency medical services and managed care.
"I think it demonstrates, when you bring it down to patient care issues, that health care plans as well as emergency physicians are interested in seeing that their patients get the right care at the right time and don’t have unnecessary barriers erected," says Charlotte Yeh, MD, FACEP, Chief of Emergency Medicine at New England Medical Center and Chairman of the American College of Emergency Physicians’ (ACEP) Government Affairs Committee.
Similar to the original "Cardin bill" H.R. 2011, which failed to pass in the 104th Congress, the Access to Medical Services Act would establish the "prudent layperson" definition of an emergency and prohibit health plans from requiring calls for authorization before the patient has been screened and stabilized.
"We’ve all heard horror stories in which someone has been denied payment for an emergency room visit because their chest pains didn’t turn out to be a heart attack," says Rep. Benjamin Cardin (D-MD), who is sponsoring the bill with Sens. Barbara Mikulski (D-MD) and Bob Graham (D-FL). "This legislation would end that by standardizing the prudent layperson’ definition of an emergency for reimbursement."
Based largely on the landmark August 1996 agreement between ACEP and Kaiser-Permanente, Inc., the nation’s largest HMO, the new bill would require health plans to pay for care in the ED if a "prudent layperson" would believe an emergency medical condition existed, even if the eventual diagnosis is a non-emergent condition.
"It’s based on a consumer perspective and not on an after-the-fact medical perspective," says Yeh. "I think that change of thinking is for the safety of the patients and good emergency care."
Building a strong coalition
After reaching their agreement, Kaiser and ACEP worked collaboratively with Rep. Cardin to develop the legislation, says ACEP President Larry A. Bedard, MD, FACEP.
When the legislation was drafted, it was approved by both the Kaiser and ACEP boards and released for comments to other organizations, like the American Medical Association (AMA), Bedard says.
Last year, the AMA supported many of the principles of the Cardin bill, but still had some reservations that kept them from endorsing it, Bedard says. In sharing the document with them now, he is hopeful the organization will give its full support.
Bedard has also spoken with the American Hospital Association (AHA), which was neutral on the first Cardin bill.
"The same organizations that supported us last year are supporting us this year, and I think we have been able to broaden our coalition," he says. "I think the thing that will really enhance its chance of passage is the coalition that we have established with Kaiser, and I think the biggest significant change in the political dynamics is that we are working cooperatively with one of the largest HMOs in the country."
Kaiser’s endorsement is very important to the hospital associations because Kaiser is a major member, Bedard says.
Differences in current proposal
Largely due to the Kaiser agreement, the new legislation clarifies a physician’s responsibility to the patient and MCO after that patient is stabilizedsomething the first bill didn’t do, Bedard states.
"In Cardin I, it stated that there was no prior authorization up to the point of stabilization, and after that it may be appropriate," he says. "We felt that needed to be clarified, and it’s clarified to reduce the hassle factor of emergency medicine."
According to the new bill, the health plan will be required to have somebody available to respond by phone within 30 minutes. Anyone from the health plan can authorize additional care, but only a physician would be allowed to deny it.
"So, if I call and get a nurse and I tell her I think the patient needs a CAT scan and she says fine,’ then [it’s authorized]. If the nurse says, Our protocol doesn’t authorize that,’ I say, Fine, I need to talk to a physician,’ and the clock starts over again. They have 30 minutes to respond."
The fact that the bill establishes guidelines for the interaction of emergency physicians and managed care representatives is very important, say both Bedard and Yeh.
"If you follow the system and you get the authorization, you are guaranteed to get paid for that service, but I think it’s more importantmuch more importantthat there is a positive message that we as emergency physicians will help coordinate a patient’s care," Bedard says. "We want to talk to primary care physicians and we want to come up with an acceptable treatment plan."
Yeh says she feels that there has long been a view that EDs operate "outside" the health care system, and that a patient presenting to the department for care was a failure.
"This shows that emergency departments and emergency services are not outside the health care system but can work in partnership with others as part of a system," she says.
Conflict with state laws
Where the current proposal differs from the Kaiser agreement is in the issue of preemption of state laws, Bedard notes.
"This was a major issue for many of our state chapters," he says. "They were concerned that, in essence, the Cardin bill would set the ceiling’ for state activities, which it would have in the Kaiser-ACEP agreement."
The bill, as it is currently written, would be the "floor," meaning that state laws could preempt the legislation if their bills give the patients more benefits, like mandatory payment for screening examinations, Bedard says.
The key components of unencumbered access to emergency medical care is so well-covered under the federal proposal, though, states may not feel the need to have legislation, says Yeh.
"I have to say, that just by introducing the prudent layperson standard for the definition of emergency care and allowing people access to care by not permitting authorization prior to screening and stabilization, those are such key, critical points that it may not be necessary for states to go beyond that."
However, even with individual states passing "prudent layperson" laws, federal legislation is necessary to ensure everyone the same benefit, emphasizes Bedard.
"Currently, in a few of the states we have prudent layperson, but only about half of the patients we see will be covered by it, because many groups are exempt from state law," he says. "If you are a member of Medicaid, Medicare, or an exempt HMO, which is the largest number of people, you are exempt from the state law."
Impact on the ED
If this bill passes, the first thing physicians will probably see is fewer denials, and then a reduction in the amount of complaints and appeals, say Bedard and Yeh.
"What I hope we’ll see is an immediate reduction of conflict with COBRA on the prior authorization piece," says Yeh. "I think what I see is an improved process for patients who have emergencies in getting the appropriate services paid for and not having hospitals and providers risking non-compliance with anti-dumping laws."
To Bedard, the most significant change is that 100% of the patients a physician sees will be covered by this legislation.
"We know that in Maryland, where there is prudent layperson [legislation], it has significantly cut down on the number of denied payments. I think it cuts out a lot of the hassle factor. When you have to look at an emergency from the patient’s perspective, and not just retrospectively look at the diagnosis, a lot of the denials decrease."
The cost to the health plan of appeals and the appeals process will also decrease, which was a major reason Kaiser supported the measure originally, notes Bedard.
"To get into disagreements with patientsgee, this was chest pain but it turned out to be indigestionit costs them a lot, in money, effort, and bad PR."
In the long term, establishing prudent layperson provides a base for a greater level of cooperation between EDs and managed care, says Bedard.
A lot of issues are best solved with negotiations once the "baseline parameters" have been set, he says.
In California, where the prudent layperson standard has been established through state legislation, several physician practice groups have moved beyond what Bedard refers to as "first-generation managed care" and developed a cooperative relationship with managed care plans. His practice group, in an agreement with Kaiser at 18 of the 37 EDs it manages, has eliminated calls for authorization and the health plan pays for screening exams.
Because Kaiser knows that they are willing to transfer the patient to the primary care provider or to another facility when possible, they have been able to move to the "second generation of managed care," he says.
"The message I want to send, especially to the managed care industry, is, it’s time for us to get beyond what the definition of an emergency is," Bedard says. "Once you get beyond the definition of an emergency and having to have an appeals process, you have a more cooperative relationship that opens up new possibilitiesregional contracting, bundled pricing of services, etc.
"I’m fairly optimistic that if you are flexible, creative, and intelligent, then you should do well under managed care."
Subscribe Now for Access
You have reached your article limit for the month. We hope you found our articles both enjoyable and insightful. For information on new subscriptions, product trials, alternative billing arrangements or group and site discounts please call 800-688-2421. We look forward to having you as a long-term member of the Relias Media community.