Do Hospitals Have an Obligation to Check the Patient’s Insurance Status Before Transfer From the ED?
December 1, 2014
Do Hospitals Have an Obligation to Check the Patient’s Insurance Status Before Transfer From the ED?
In a fascinating case that raises more questions than provides answers, a Louisiana appellate court grappled with the issue of whether the Louisiana Medicaid program was required to pay for the out-of-state inpatient care provided to its Medicaid enrollee in Georgia after transfer from a Louisiana hospital emergency department.
By Robert A. Bitterman, MD, JD, FACEP
Contributing Editor, ED Legal Letter
The case of Doctors Hospital of Augusta, Georgia vs. Louisiana Department of Health and Hospitals 1
A 46-year-old woman fell into a bathtub of scalding water, sustaining second- and third-degree burns over 40% of her body. EMS transported her to the emergency room at East Jefferson General Hospital (EJGH) in Metairie, Louisiana, which is in the New Orleans metropolitan area. The emergency physician determined the injury met burn center criteria, so he contacted Doctors Hospital in Augusta, Georgia, which accepted the patient in transfer.1
East Jefferson’s emergency department charge nurse testified that they called Doctors Hospital because its representatives had been at EJGH the week before making EJGH aware of their nationally recognized Joseph M. Still burn unit. Doctors Hospital is more than 600 miles away from East Jefferson Hospital. The emergency physician and charge nurse didn’t consider or contact any of the three certified burn units in the state of Louisiana — Baton Rouge General Medical Center, Our Lady of Lourdes Grossman Burn Center in Lafayette, or LSU-HSCS Burn Center in Shreveport, which are about 70 miles, 130 miles, and 330 miles, respectively, from EJGH.1
The emergency physician later testified that he "transfers patients to burn centers that have the capability and capacity to take care of the patient, who will accept the patient, and get the patient care quickly." He offered no rationale for failing to transfer the patient to one of the much closer hospitals in Louisiana. The ED charge nurse testified that EJGH had sent burn patients to Baton Rouge General Medical Center in the past and had no issues with that facility. She also provided no rationale for eschewing a closer burn unit.1
The three-and-a-half-hour airplane medical transport necessary to transfer the patient transpired uneventfully. The patient underwent multiple surgeries, including two within 48 hours of arriving at Doctors Hospital. More than two months later, she was discharged back to EJGH for rehabilitation.
Doctors Hospital then sent the Louisiana Medicaid program an invoice for $2.8 million.
The Louisiana Department of Health and Hospitals (LA-DHH), which is responsible for the state’s Medicaid program, refused to pay Doctors Hospital for the care of its Medicaid beneficiary stating, "The reason for the denial is that the needed treatment is available within the state of Louisiana at Baton Rouge General Hospital (BRGH). Our policy is to authorize nonemergency out-of-state treatment only when the needed services are not available within the state."1 Thus, there were two components to LA-DHH’s rejection of the claim: first, that the care provided was "non-emergent" treatment, and second, out-of-state services were only covered if the care was not available in Louisiana.
Doctors Hospital’s own fiscal intermediary also reviewed the claim for LA-DHH and it, too, recommended denial based on the fact that the burn care was available at BRGH and LSU. However, the reviewing physicians for both LA-DHH and the fiscal intermediary admitted in their testimony that they did not actually know if there were any beds available in the Louisiana burn units on the date in question.1
Subsequently, an administrative law hearing was held and the judge recommended that LA-DHH reverse its denial of payment to Doctors Hospital finding that in policy and practice, LA-DHH did not decline to pay for emergency admissions because services were available in Louisiana.1 He concluded that the agency’s policy was to honor out-of-state emergency treatment without prior authorization, and he felt the case was an emergency admission. Nonetheless, the Secretary of LA-DHH rejected the administrative law judge’s findings and issued its final decision, declaring Doctors Hospital’s claim to be a non-emergency and denying payment on the basis that Doctors Hospital failed to prove that the burn centers at Baton Rouge and Shreveport (LSU) could not have provided care to the patient.1
Doctors Hospital next asked the Louisiana courts to overturn the agency’s decision, asserting it was arbitrary and capricious, not supported by the evidence under Louisiana law, and resulted in a "windfall" to the Louisiana Medicaid program.1
Opinion of the Louisiana Court of Appeals
Doctors Hospital lost at the district court level, but appealed to the higher court, which determined two sections of the Louisiana Administrative Code to be the pertinent regulations to decide the case. The law entitled "Out-of-State Medical Care" states:2
A. Medicaid coverage is provided to eligible individuals who are absent from the state.
B. Medical claims for out-of-state services are honored when:
(1) an emergency arises from an accident or illness or3
(4) the medical care and service or needed supplementary resources are not available within the state. Prior authorization is required for out-of-state [non-emergency] care.
LA-DHH contended option (1) did not apply because the patient did not have an "emergency medical condition" at the time of transfer, or alternatively, because the patient was in Louisiana, not out of state, when the "emergency" occurred. LA-DHH claimed that the patient had to be out of state when the emergency occurred in order for (1) to apply. Therefore, LA-DHH argued that Doctors Hospital had to satisfy option (4) by proving that the necessary medical services were not available in Louisiana.1
LA-DHH based its decision that the patient did not have an emergency medical condition (EMC) or need "immediate medical attention" based on the fact that the emergency physician failed to contact the closest available burn unit to obtain the most expeditious treatment possible. Instead, the physician transported the patient for 3+ hours by air to Doctors Hospital. However, the emergency physician testified that when the patient left EJGH, an EMC existed that was "emergent, guarded, and serious," and that he stabilized the EMC so that the patient could be transferred to an appropriate burn facility for treatment. Additionally, the accepting surgeon at Doctors Hospital also testified that the patient had an EMC because she met burn center criteria and the extent of her burns would lead to a significantly greater mortality rate or "serious impairment to bodily functions" without "immediate medical attention."1
The court, thus, overruled the LA-DHH and determined that the patient did, indeed, have an EMC, utilizing the statutory definition of an EMC in the federal Emergency Medical Treatment and Labor Act (EMTALA) and the Louisiana state counterpart to EMTALA. Federal law defines an "emergency medical condition" as:
"A medical condition manifesting itself by acute symptoms of sufficient severity (including severe pain) such that the absence of immediate medical attention could reasonably be expected to result in:
A) placing the health of the individual ... in serious jeopardy;
B) serious impairment to bodily functions; or
C) serious dysfunction of any bodily organ or part."4
Louisiana law defines an emergency as "a physical condition which places the person in imminent danger of death or permanent disability."5
The court concluded that the fact that she was stabilized and transferred by air did not change her medical condition to a non-emergency condition, particularly as she received ongoing medical treatment to keep her stable during transport and immediately upon arrival at Doctors Hospital.1
The court also concluded that the EMC did not need to arise when the patient was physically outside the state of Louisiana in order for Louisiana Medicaid to be responsible for payment to out-of-state hospitals.1 The court found no such language in Louisiana’s regulations or in the LA-DHH’s own Medicaid Training Manual requiring the patient be out of state when the emergency occurs before Louisiana will pay an out-of-state hospital for services provided to one of its Medicaid recipients.1
Moreover, all states must comply with federal Medicaid regulations in order to participate in the Medicaid program; and the federal regulation on "Payments for Services Furnished Out-of-State" requires that:
"A state plan must provide that the state will pay for services furnished in another state to the same extent that it would pay for services furnished within its boundaries if the services are furnished to a beneficiary who is a resident of the state and if the following condition is met:
(1) Medical services are needed because of a medical emergency ."6
The court found no limiting language in this federal regulation either; therefore, it concluded that LA-DHH abused its discretion by attempting to "add the additional requirement for coverage that the emergency must arise from an accident or illness occurring out of state."1
Lastly, the court addressed the issue of whether Doctors Hospital had to prove that the medically necessary care was not available in Louisiana before it could be reimbursed for its services. Doctors Hospital argued that LA-DHH was imposing an unfair burden of proof on Doctors Hospital, wholly unsupported by any law, that would require Doctors Hospital to "prove a negative after the fact" — that an available burn center bed was not available anywhere in Louisiana on the date in question. It claimed LA-DHH was penalizing Doctors Hospital for the failure of the transferring hospital, EJGH, to ascertain whether there was a burn bed available in Louisiana before it transferred the patient to an out-of-state facility.1
The court found no support in the law, the regulations, or LA-DHH’s manual to impose a duty upon the receiving hospital to inquire if there are any available burn center beds in Louisiana before accepting the patient. Furthermore, LA-DHH presented absolutely no evidence that the medical care needed by the patient was actually available in Louisiana at the time of the transfer.
Therefore, the court’s final decision was that the patient had an EMC at the time of admission to Doctors Hospital, and that under Louisiana and federal law, the Louisiana Medicaid program was required to pay for the medical services provided to its Medicaid beneficiary in the state of Georgia at Doctors Hospital.1
Should East Jefferson General, the sending hospital, have transferred the patient to a closer burn center? The short answer is yes: why send a patient with an EMC that needs "immediate medical attention" an extra two hours and 530 miles away when equivalent medical treatment is right in your own backyard? Undoubtedly the much longer transport time creates additional medical risk to the patient and additional transportation risk to the patient as well as to the transport crew.
However, it is not "illegal" to skip over other hospitals or chose a distant hospital over a closer one, at least not in Louisiana or most states. Florida, contrarily, is somewhat unique in that Florida state law requires hospitals to transfer patients to the "geographically closest" appropriate hospital with the necessary service capability and capacity to handle the patient’s emergency.7
Federal law, EMTALA, also does not prohibit an emergency department from skipping over other hospitals or transferring patients to more distant facilities.8 Nonetheless, doing so exposes the sending hospital and the emergency physician to liability under ordinary state malpractice law for "negligent failure to send the patient to the closest appropriate hospital" if the extra transport time leads to an adverse outcome that could have been averted by transferring the patient to the closer facility. Such lawsuits are not uncommon, particularly when a hospital skips over a competitor hospital to transfer the patient to an economically affiliated hospital.
In the Doctors Hospital case discussed above, the LA-DHH claimed that Louisiana emergency departments and emergency physicians had a legal duty to be aware of which hospitals in Louisiana were certified burn centers.1 It is certainly true that the prevailing standard of care would be for emergency departments to keep a list of available hospitals (and their contact numbers) known to be capable of providing needed emergency care that the hospital was unable to provide, whether that was burn care, neurosurgery, neonatal intensive care, or any other specialty service. But it’s not true that the list must be limited to in-state facilities, or even that it must include any in-state facilities.
Should the sending hospital check the patient’s insurance status before deciding where to transfer the patient? The ED charge nurse testified that she was unaware of the patient’s Medicaid status, and that the clinical staff is blinded to the patient’s insurance status. The emergency physician testified that he also was unaware of the patient’s Medicaid status and that he normally does not check payor status, especially in emergency cases such this one, as his concern is to take care of the patient as quickly as possible. A hospital representative claimed that no one at EJGH makes a transfer decision based on the payor status of the patient.1
The obvious question to ask is why didn’t they check the patient’s payor source before transferring the patient? First, it is not illegal under EMTALA, as many hospitals mistakenly believe, to ask the patient’s insurance status at the time of transfer, or even at any time during the course of the patient’s care in the ED. The federal government specifically allows hospitals to ask patients their insurance status, provided that doing so does not delay the medical screening or stabilization of the patient, or does not, in any way, discourage the patient from staying for examination or treatment.9
Second, where the patient is transferred could have a major economic impact on the patient. If the choice of hospitals is medically comparable, then it’s clearly right to choose the one that is most financially beneficial to the patient (with the patient’s permission, of course). Managed care contracts, out-of-network issues, or co-payment issues could all lead to major cost concerns for the patient. If covered by a government program, such as Medicaid, the state may have contractual relationships with preferred providers or rules on coverage that could significantly impact the patient’s financial interests.
The right time to determine the patient’s insurance status is at the time of disposition from the ED, whether discharge to home or transfer to another institution. Practically, it’s important to know for prescribing medications or arranging follow-up for discharged patients and for choice of hospitals when transferring the patient. Shouldn’t physicians have at least a moral duty, if not a legal duty, to consider their patients’ economic interests, as well as their medical interests when advising patients on the best course of care?
Does the receiving hospital have an obligation to check the patient’s insurance status prior to accepting a patient in transfer? The answer is clearly no. Furthermore, it is illegal for a receiving hospital to ask the patient’s insurance status prior to accepting or rejecting the transfer, if the transfer is an "EMTALA" transfer.10 However, not all transfers are governed by EMTALA. Thus, there are times when the receiving facility may ask for insurance before accepting the patient, and probably should ask if it wants to be compensated for its services. Some examples could be if the patient does not have an EMC or had one that has been stabilized, or if the patient has been admitted.11 EMTALA no longer applies, according to CMS, so a receiving hospital would have no legal obligation under EMTALA to accept the patient in transfer.12 It could, therefore, in these circumstances demand to know the patient’s insurance status and determine whether to accept or reject the transfer based on the insurance information obtained.
Can the hospital refuse to accept an EMTALA transfer because there is a closer available hospital, as LA-DHH wanted Doctors Hospital to do because there were closer burn units in Louisiana? No. Hospitals with specialized services such as burn units have a legal obligation under EMTALA to accept patients in transfer if they have the capability and capacity to take care of the patient’s EMC.13 But there are a number of caveats to the duty to accept patients in transfer under EMTALA. First, no hospital has to accept a patient in transfer when it doesn’t have the capability or capacity to handle the patient’s EMC. For example, a hospital does not have to accept a neurosurgical case when the hospital’s on-call neurosurgeon is already engaged in emergency surgery for the next few hours.13
Second, the patient must have presented to a Medicare participating hospital "dedicated emergency department" and not have been admitted to the original hospital. Both "dedicated emergency department" and "admitted" to the hospital are legally defined terms for purposes of EMTALA. For example, hospital labor and delivery departments and psychiatric intake centers qualify as "dedicated emergency departments" under the law.14
Third, the sending hospital must be inside the boundaries of the United States, and refusing transfers because they come from "out of county," "out-of-state," or "outside our referral area" is illegal under EMTALA.14 The only exception to this "no territorial limit inside the boundaries of the United States" duty to accept patients in transfer is the situation in which the times and distances related to skipping over other comparable hospitals would clearly not be medically appropriate, such as transferring the patient with a ruptured aortic aneurysm an extra two hours.13 In the Doctors Hospital case, flying the burn patient three hours to Doctors Hospital vs. flying the patient one hour to a Louisiana burn center would not be considered medically inappropriate under EMTALA such that Doctors Hospital could refuse the transfer from EJGH.
Accepting or rejecting patient transfers, particularly if the insurance issues are brought into play in the decision-making process, are fraught with a host of risks — medical and economic risks to patients, and substantial legal risks to physicians and hospitals. Every transferring emergency department and receiving hospital needs to have considered the issues in advance, done their legal homework, and implemented appropriate policies and procedures to specifically address these issues.
- Doctors Hosp. of Augusta vs. Dep’t of Health and Hosp., No. 2013 CA 1762 (La. Ct. App. Sept. 17, 2014).
- Louisiana Administrative Code (LAC) 50:1.701.
- The court determined Doctors Hospital only had to prove that one of the four elements was true: hence the use of the word "or" rather than "and" as found in the statute.
- 42 U.S.C. § 1395(dd)(e)(1)(A).
- La. R.S. 40:2113.4(B).
- 42 C.F.R. 431.52. Medicaid payments for services furnished out of State.
- Fla. Stat. Ann. Section 395.1041(3)(e).
- 42 U.S.C. 1395dd et seq.
- 42 U.S.C. 1395dd(h), 42 CFR 489.24 et seq, Center for Medicaid and State Operations/Survey and Certification Group, Reference S&C-14-06-Hospitals /CAHs, December 13, 2013: EMTALA Requirements & Conflicting Payor Requirements or Collection Practices. Available at: http://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/SurveyCertificationGenInfo/Downloads/Survey-and-Cert-Letter-14-06.pdf .
- 42 U.S.C.1395dd(h).
- The patient must be formally admitted as defined by CMS: Admission to "observation status" does not count as admitted for purposes of ending EMTALA obligations.
- Whether hospitals must accept patients with emergency conditions that have been stabilized is a debatable issue. For example, the burn patient or suicidal psychiatric patient that the ED can readily stabilize with IV fluids or securing from harm but not definitively treat the underlying emergency condition — the burns themselves or the suicidality. See 42 U.S.C. 1395(dd)(e)(A).
- 42 U.S.C. 1395dd(g).
- 42 C.F.R. 489.24 et seq.
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