March 2018

By: John Wallace, MD

IEPC has filed a request with the California Department of Insurance to examine what it alleges  are unfair contracting practices by Anthem Blue Cross. Anthem has become increasingly aggressive over the past 2 years in attempts to further decrease it’s already sub standard metrics for reimbursement to ED physicians for ED services.

IEPC represents over 1,000 ED physicians and over 1.7 million ED visits per year in California. In an IEPC survey conducted in 2017, no IEPC ED group had a satisfactory in network contract agreement with Anthem. 50% of groups were out of network and the other 50% were in coerced agreements.

In a letter addressed to California insurance commissioner, David Jones, IEPC requested that Anthem be regulated and punished for such tactics. The letter details Anthem’s practices of:
1. violating Stark and anti-kick back Laws;
2. employing assigned benefit tactics calculated to deprive ED providers of reimbursement and coerce in network compliance with nonmarket value rates;
3. expanding high deductible plans which dangerously delay emergency care for patients and unjustly skew the “surprise medical bill” dialogue;
4. ignoring Prudent Layperson standard by reimbursing based on final diagnosis and not presenting complaint and;
5. By design failing to provide network adequacy for emergency services for its subscribers.

The letter also casts Anthem as an outlier to other major health plans in failing to offer market value rates for in network services by violating court mandated precedents for usual and customary rates for provider reimbursement and failing to meet common rates obtained by the majority of emergency groups with other major Health Plans. IEPC retained Andrew Selesnick, JD of law firm Buchalter as legal consultant and liaison in the matter.

EMTALA legislation passed in 1986 mandates the evaluation and stabilization of all patients who present to the emergency department, and the prudent layperson standard which is codified din federal law, including the Patient protection and Affordable Care Act gives patients the protection to seek emergency care and provides hospitals and emergency physicians the assurance of payment for those services. The CAL ACEP January 2018 Lifeline issue chronicles “Anthem’s attack on the Prudent Layperson Standard” focusing on Anthem’s denial for payment based on a list of discharge diagnoses “they deemed unnecessary” and highlighting Anthem’s latest foray to maximize it’s own profits by “threatening to undermine it’s (prudent layperson) patient-centered guarantee by announcing a plan to reimburse paramedics to not transport patients to the ED”1. Prior articles in CAL ACEP Lifeline from January 2017 and December 2016 document the pitfalls of EMS triage to non-emergent sites by paramedic personnel2. Anthem additionally has announced new bundling strategies employing modifier 25 bundling to decrease provider reimbursement.

Anthem’s actions have not gone un-noticed nationally and in other states. In Kentucky, Missouri, Georgia, Indiana, New Hampshire, and most recently Ohio, opposition has emerged to combat Anthem’s violation of Prudent Layperson and payment based on final diagnosis policy as local Emergency Medicine groups, ACEP3 and EDPMA4 have weighed in against the policy. In Connecticut, Hartford Health Care Corp has sued Anthem over it’s assigned benefit policy.

IEPC president and founder, Dr. Roneet Lev has stated: “We are just the little guy. We, as emergency groups are just trying to preserve our patient’s right to Emergency Care and ensure that we have the resources to staff our Emergency Departments adequately to preserve the health care safety net”.

Meanwhile, Anthem continues to report record earnings each quarter with most recent earning’s report from January 31, 2018 revealing 2017 full year revenue of $89.1 Billion with operating cash flow increase of 28% year over year5. Despite Anthem’s claim that it is the protector of the American Health Care System we have yet to see any subscriber premium reductions while its profits continue to grow at a robust rate.

Warren Buffet said it best recently after the announcement on January 30, 2018 that Amazon, Berkshire Hathaway and JP Morgan will partner in an as yet unnamed company “free from profit-making incentives and constraints” to give their U.S. workers and families (840,000 global employees as of 2017) a better option on health insurance. “The ballooning costs of health care act as a hungry tapeworm on the American economy,” said Buffett. “We share the belief that putting our collective resources behind the country’s best talent can, in time, check the rise in health costs while concurrently enhancing patient satisfaction and outcomes”6.

1. CAL ACEP Lifeline, January 2018, “Anthem’s Attack on the Prudent Layperson” p. 4-6. “Defending Patients Against Anthem’s Attacks on Access to Care” p. 8-9
2. CAL ACEP Lifeline, January 2017, “Alternate Destination Transport? The Role of Paramedics in Optimal Use of the ED”. P.10-15CAL ACEP Lifeline December 2016, “Alternative Destinations”, p. 4-6 CAL ACEP response in opposition to AB 1795, January 24, 2018. Private communication
3. ACEP news release May 16, 2017 ACEP Email blast February 14, 2018
4. Private communication, EDPMA to BCBS Kansas, October 19, 2017
5. Anthem press release, January 31, 2018
6. US News, January 30, 2018

Source: Independent Emergency Physicians Consortium