Denials at the ER: A Profit-Making Precedent

United Healthcare, the largest insurer in the US, announced this May that they may start denying claims from the ER if it turned out the visits were not actual emergencies. Like almost everything in our healthcare system, this policy doesn’t actually make sense on a moral or even a financial level. We discuss the surprisingly long history of this “new” policy, its implications and impact, and the pushback from doctors and patients. 

Show Notes

Ben and Stephanie break down the latest evil plot of the insurance industry.

United Healthcare, the largest insurer in the US, announced this May – during the pandemic – a policy to hold down health care costs: the insurer would review claims for emergency department care to determine whether or not the visit was for an actual emergency. If the paper-pushers decided you didn’t actually require emergency care, the insurer could deny the claim.

After outcry from doctors and patients, and United Healthcare said it would delay implementation until the COVID-19 pandemic has passed — but it still plans to institute the policy eventually.

ER visits have actually been down during the pandemic, as people are avoiding the hospital for fear of risking a COVID-19 exposure. With ER visits down, private health insurance profits are up.

United Healthcare took in $257 billion in revenue last year. It also reported more than $15 billion in profit — an 11% increase from the previous year. This quarter, it took in $4.37 billion in profit and increased its earnings outlook after beating expectations for profit and revenue. Anthem reported $1.8 billion in profit and said COVID-19 variants and slowing vaccination rates added uncertainty to the second half of the year, but still raised its earnings forecast.

Ben and Stephanie discuss other efforts by the insurance industry to punish people for using the ER. In addition, many states have been implementing this policy for Medicaid beneficiaries for years, part of a pattern of targeting and terrorizing Medicaid beneficiaries. Medicaid programs that have implemented copays for “nonemergency” visits. Unsurprisingly, people are still going to the ER when they need care, and these policies are having no impact on the Medicaid recipient ER utilization rate.

A 2018 study by Boston area researchers looked at what would happen if these policies were adopted nation-wide.

This research showed that retroactively reviewing ER visits is wrong in principle: “The main limitation of retrospectively judging the necessity of ED care is that the determination is based on information not available to patients prior to the medical evaluation. When patients become acutely ill, they must decide whether to seek care (and, if so, when and where) based not on a diagnosis but on the symptoms they are experiencing.”

Health insurance companies prime us to be afraid of using our healthcare benefits, of avoiding the healthcare system whenever possible, because if you’re hassled with bills and denials every time you use care, obviously they will succeed in getting you to avoid care. This is exactly that they’re doing here – conditioning us to think twice. Their business model literally depends on people not getting care.

Dr. Evil - Wikipedia
An insurance company CEO, allegedly. (Image description: Dr. Evil from Austin Powers films.)

According to a Journal of Public Health and Emergency study, women use the emergency department 25% more often than males. Black Americans under the age of 65 use the emergency department 10-19% more often than White Americans. So United Healthcare’s policy would affect women of color at an extremely disproportionate rate.

Last year, California health care regulators fined health insurer Aetna for wrongfully denying members’ ER claims 93% of the time, in violation of state laws protecting ER patients. (The department’s sample of ER claims denied by Aetna in 2019 found that a stunning 93% were wrongly denied.) The fine, at $500k, is pocket change. 

“Avoidance of urgent or emergency care was more prevalent among unpaid caregivers for adults, persons with underlying medical conditions, Black adults, Hispanic adults, young adults, and persons with disabilities,” the researchers wrote.

If United Healthcare still goes ahead with the change later on, the policy would apply to millions of people in United’s fully insured plans in 35 states, including New York, Ohio, Texas, and Washington.

Next, Ben and Stephanie dig into the narrative that people overuse the ER, which drives up costs for everyone. But ER visits have been stable for years. Its costs have been going up – driven by prices.

Shifting care from the ER to outpatient settings may have real clinical benefits for patients — the evidence is robust that early medical interventions, in primary and specialist care, lead to better outcomes — but it won’t necessarily save money. People might get more outpatient care and, on top of that, hospitals will charge what they must to cover the cost of operating an emergency department.

More resources

Health Affairs article, “The Uninsured Do Not Use The Emergency Department More—They Use Other Care Less”

Amy Vilela’s daughter Shalynne was denied emergency care, and later died.

List of cost-sharing for ER (and other services) for Medicaid enrollees.

Report from former Senator Claire McCaskill’s office focused on the impact of denial of ER claims in Missouri alone.

Jacobin article “Health Insurers Shouldn’t Be Incentivized to Deny Patients’ Emergency Room Visits

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