Summary of Concerns
Rate Caps for Out-of-Network Emergency Services
The New York State Chapter of the American College of Emergency Physicians (New York ACEP) represents over 2,100 emergency physicians across the State that have a shared mission to provide the highest quality emergency care for all patients regardless of their ability to pay.

Emergency departments (EDs) and the people who work there play an invaluable role in every community in the State as a point of access for critical health care needs. We are one of the largest indigent care providers in the State, providing care 24 hours a day, 365 days a year to every patient who walks in the door. Over 7 million people visit New York’s EDs every year. During nights, weekends and holidays, emergency departments are often the only available option for patients with concerning symptoms and injuries.

 

Given our commitment to patient care, New York ACEP is concerned that proposals put forward by the health insurance industry for the past several years to set “usual and customary fees” or otherwise limit reimbursement for out-of-network emergency care would have a devastating effect on the State’s emergency care safety net. While these proposals purport to help patients, they would hurt them by reducing their access to emergency care. New York ACEP strongly oppose these proposals. It is New York ACEP’s position that emergency physicians should not be included in proposals to regulate fees. Our concerns are summarized below.

The Emergency Care Safety Net is Underfunded
Emergency physicians already shoulder a disproportionate share of the costs of uncompensated care for uninsured individuals. Current Medicaid payment rates are grossly inequitable for emergency care-a set fee of $25.00 per visit. The costs of a patient’s care, evaluation and treatment as well as medical liability insurance, billing, overhead and standard benefits vastly exceed this $25 per visit payment. In addition, recently enacted Medicaid rate reforms for the Ambulatory Patient Groups (APGS) excluded emergency physicians from the rate increases. Emergency physicians need more resources, not less, to meet the needs of patients.

Health Care Plans are Making Record Profits
Meanwhile, the insurance industry is making record profits- HMO’s have generated over $1 billion in profits in New York in last the six years. These profits are twice what are generated in New Jersey and three times that of plans in Connecticut. (HealthLeaders InterStudy) And they come at the expense of patients. The average annual family premium in 2008 was 27% higher than four years ago and 119% higher than it was in 1999. (Kaiser Family Foundation) 
Insurance industry proposals to cap fees on emergency physicians would force them to provide significantly more uncompensated care to the insured population. Big insurance companies should not be allowed to shift their fundamental responsibility of paying fair and reasonable rates for emergency care received by their enrollees onto the overburdened emergency care safety net. If this is allowed to happen, patients will suffer.

 

Patients Foot the Bill for Unfair Practices by the Insurance Industry
Most problems with balance billing are the direct result of unfair and insufficient payments practices by insurance companies. In this State, five health plans insure 75% of the State’s managed care enrollees. The health care plans use their market dominance to offer “take it or leave it” contracts to physicians that include insufficient fees, the imposition of lengthy pre-authorization procedures for patients and providers, limitations on clinically necessary diagnostic services and restrictions on specialty care for seriously ill patients.

 

There are many other examples of egregious and possibly illegal behavior. Last year Attorney General Andrew Cuomo began an industry-wide investigation into allegations that insurance companies were “unfairly saddling consumers with too much of the cost of out-of-network care.” He accused one company of using “a defective and manipulated database to set reimbursement rates for out-of-network medical expenses” which ultimately results in much higher bills that must be paid by patients.

 

On January 15, 2009 Cuomo announced that he had concluded from his investigation  that “having a health insurer determine the “usual and customary rate-a large portion of which the insurer then reimburses-creates an incentive for the insurer to manipulate the rate downward.” The investigation found the rate of underpayment by insurers ranged from ten to twenty-eight percent for various medical services.

 

Capping Fees Will Reduce Patient Access to Emergency Services
Overcrowding and ambulance diversion are currently serious problems in emergency departments across the State. New York ACEP has conducted two studies in the last five years that show that overcrowding in the EDs is a continuing problem in every geographic area of the State. It’s an ongoing problem that is not seasonal or episodic in nature based on the flu or other factors. The State Department of Health did its own survey which confirmed New York ACEP’s findings. The Health Department’s study found that the top factors associated with ED overcrowding were increased patient volume, increase patient acuity and age of patients, and nursing shortages in both the ED and inpatient units. Government imposed fee limitations would be a step backward in this effort and hurt patient access to care.

 

In addition, a 2006 National ACEP Survey on “On-Call Specialist Coverage in US Emergency Departments” found that three-quarters of the hospital in the nation report problems with on-call specialists. New York State has the highest rate of inadequate on-call covererage-74% of hospitals surveyed reported this as a problem. Top shortages include orthopedics, plastic surgery, neurosurgery, and hand surgery. Any proposals to further limit fees will impair patient access to on-call specialists in hospital emergency departments.

 

In summary, capping reimbursement for emergency physicians who choose not to participate in an insurance company’s panel will reduce access to care by shifting money from patient services to insurance companies. It will increase the current hospital crowding and specialty care shortage crisis and have a negative effect on the emergency care network at a time when the State should be investing more, not less, resources to combat terrorism and ensure quality of care.