High deductible healthcare plans are altering EMTALA’s “prudent layperson standard” as patients triage themselves away from the ED based on what they think they can afford.
It’s been nearly three decades since Congress enacted the landmark Emergency Medical Treatment and Active Labor Act (EMTALA), changing the field of emergency medicine forever. One the byproducts of EMTALA was the “Prudent Layperson Standard (PLP),” which was codified in 1998 in response to a critical payer issue of the day — payment denials for the lack of prior authorization. Under the PLP standard, if the patient reasonably thinks he or she has an emergency medical condition, then the service is covered, even if it turns out to not be an emergency. This system worked for years, but now, thanks to the Affordable Care Act, the idea of what a “prudent” person is likely to do is fundamentally shifting, which brings the PLP standard into question.
High deductible health care plans are beginning to impact what a prudent layperson would actually do with respect to a potential emergency medical condition. The latest Merritt Hawkins data reveal that the average cumulative wait time to see a family physician in 15 different U.S. markets across the country is 19.5 days. Furthermore, according to a Vitals survey reported in Becker’s Hospital Review, “Adults under 30 are now more likely to seek care at an urgent care facility than through a primary care provider.” Why would patients with a potential emergency medical condition go somewhere other than an ED? According to Punke, these patients may be choosing urgent care because of shortages of primary care physicians, overcrowded emergency departments and increasing health care costs.
The bottom line: The prudent layperson is now taking more into account than just their medical condition when they decide whether to visit an emergency department. This has created a type of “economic triage,” in which patients are not just asking, “Am I sick or injured?” but also “Can I afford to find out the answer to that question?” And these are not just the marginally sick who might visit a retail clinic; these are potentially very sick patients.
How are hospitals responding to this emerging trend? According to Halley and Anderson, the geographic location of primary care affects the payer mix of the hospital and its affiliated subspecialties. Hospital and health system CFOs would be wise to advocate investment in primary care physicians to secure market share. In other words, they assert, bring the primary care providers in close proximity to the hospital and its emergency department. That way, they explain, patients will continue to go to one place for all their care — chronic, elective, minor, urgent, and emergent. “Hospitals should also develop compensation plans with a value-volume balance,” they add, “and establish ways to actively manage referrals.” But that still has the potential of putting the hospital and private practice physicians at odds. Kutscher argues that “systems have become trapped between the current fee-for-service imperative of using physician affiliations to boost hospital volumes and the coming goal of coordinating care to reduce unnecessary utilization and improve quality.”
The answer may lie in aligning all the stakeholders — payers, hospitals, and physicians — and their attendant incentives under the same entity. Ezekiel Emanuel, MD, one of the architects of the Afford- able care Act, refers to this movement as the “Kaiserification of our healthcare system.” Hospitals and physicians have been working together for some time. But some hospitals now are considering providing their own insurance to patients. Kenneth L. Davis, MD, CEO and president of Mount Sinai Health System, the largest health care provider in the state of New York, has said that, starting next year, Mount Sinai will begin offering its own Medicare Advantage plan. It will look for other opportunities to bring premium payments directly into the hospital system, rather than filtering them through insurance companies. If this is the start of something big, there will be even greater pressure to expand urgent care.
Where does EM fit into this picture? Will EM physicians embrace the growth of urgent care, or simply accept the new reality of economic triage, throwing up our hands and hoping for the best? There are approximately 9,300 urgent care centers in the United States. But who works there? One thing is clear. Emergency physicians are best qualified to assess, diagnose and treat all patients in terms of urgent and non -emergent patient presentations. But not all urgent care centers are staffed by EM physicians.
The shifts in insurance arrangements and alignments are now affecting the core elements of EMTALA and the prudent lay- person definition of an emergency. A parent may now decide to take his or her ill child to an urgent care, not because they don’t think they have an emergency medical condition, but because of other factors, such as convenience or out-of-pocket costs. But are these parents the best people to determine whether their child requires an emergency department visit? Is this not the most essential domain of emergency medicine?
The prudent emergency physician will need to address this patient, hospital, health system, private insurer and investor migration to urgent care as a means of preserving an integral component of the specialty’s commitment to providing its patients the best medical care. This will also bring workforce issues to the forefront and EM certainly does not want to develop its own version of the primary care shortage. Anthony Spezia, president and CEO of Covenant Health, recently stated in Molly Gamble’s article that “the system that we currently have is going to force people to forego care. We’re seeing it already with the high deductible plans . . . We’re just on the tipping point now of seeing many people struggling with accessing care because they can’t afford it...”
And what will be the impact of this migration to urgent care? Some emergency physicians pray for the day when the urgent care population simply disappears. But they may come to regret their wishes as they witness dramatic changes in the payer, diagnostic and acuity mix of emergency department practices. The migration of significant numbers of lower acuity patients from any ED will impact practice revenue at least in the short run and likely increase patient acuity. It will be necessary to constantly monitor these key practice indices. An increase in acuity also will potentially impact staffing as well as revenue.
There was a time when the demographics and acuities of an ED practice were both relatively stable. Some exceptions certainly existed, especially among EDs in seasonal resort towns. But as the industry continues to change, it has now become necessary for every ED to constantly monitor these practice metrics. The financial stability of practices may be at stake as well as the core specialty responsibilities imposed by EMTALA and the prudent layperson standard.
John Holstein is a director at Zotec Partners.
1. Merritt Hawkins. 2014 Survey. Physician Appointment Wait Times and Medicare and Medicaid Acceptance Rates.
2. Becker, Scott. 8 Thoughts on the State of Healthcare. Becker’s Hospital Review. January 9, 2014
3. Punke, Heather. Changes Coming in Urgent Care: How Health Systems Could Benefit.” Becker’s Hospital Review. February 7, 2014.
4. Halley, Marc D.; Anderson, Peter, MD. Ac- countable Primary Care- A Critical Invest- ment.“ Healthcare Financial Management. February 2014.
5. Kutscher, Beth. “Making Physicians Pay Off.” Modern Healthcare. February 24, 2014
6. American Academy of Urgent Care Medi- cine.
7. Gamble, Molly. Healthcare Needs a Turn- around: Q&A with Anthony Spezia, CEO of Covenant Health. Becker’s Hospital Review. February 26, 2014.