Connecticut health system sues Anthem over ER reimbursement change
Hartford HealthCare Corp. is suing Anthem Blue Cross and Blue Shield over a new emergency department (ED) reimbursement policy.
After the two sides didn't agree on a new contract, the health system said Anthem is now paying patients for their emergency care rather than paying Hartford HealthCare directly. That means patients then need to pay the health system for the care.
Hartford is seeking an injunction that forces Anthem to pay the system directly again.
The two sides could not come to a contract agreement by a Sept. 30 deadline, which made Hartford suddenly out-of-network for tens of thousands of Anthem members. Connecticut-based Hartford HealthCare, which includes Hartford Hospital, Backus Hospital and MidState Medical Center, said this is the second contract dispute with Anthem over the past three years.
The health system has a number of reasons to pursue litigation. The issues go beyond potential lost revenue. There's also the added headache of tracking down payments from individuals rather than payers. That's a more complicated process and hurts the system's revenue cycle.
The Hartford-Anthem development is just the latest contract dispute between hospitals and payers, as insurance companies look for ways to keep down costs and hospitals face dwindling admissions and reimbursements. Both Hartford and Anthem said they are open to continuing negotiations and state officials have spoken out about the impasse, so that outside pressure may force the two sides to come to an agreement.
Anthem has enjoyed positive financial results lately. Anthem’s second-quarter earnings beat Wall Street’s target and the payer raised its third-quarter dividend by 5 cents to 70 cents a share and its fiscal year 2017 adjusted earnings to $11.70 a share. Anthem also saw a 4.3% increase in operating revenue in the second quarter, which officials said was linked to premium rate increases and higher enrollments.
Though this case involves ED payments, it's not related to Anthem’s controversial policy to not pay for “unnecessary” ED visits. In that case, the payer has an Anthem medical director review claims information and deciding whether symptoms and diagnoses warranted the ED visit.
That policy change looks to save costs and cut ED visits and wait times. Hospital leaders have spoken out against that policy, including Missouri healthcare executives who have called the policy “unfair to policyholders, and downright dangerous for patients.”
The American College of Emergency Physicians (ACEP) and its Missouri chapter have called the policy a “clear violation of the national prudent layperson standard,” which requires payers to cover patients based on a patient’s symptoms and not their final diagnosis. ACEP said nearly 2,000 non-urgent diagnoses on Anthem’s list of possibly non-covered symptoms can be life-threatening or lead to further health problems. However, Anthem said that only a small percentage of claims have been denied for unnecessary ED use in other states with the policy.