In June 2021, United Healthcare and former CPA/current CEO Brian Thompson made the altruistic decision to temporarily suspend a policy denying payments for “non-emergent” emergency department care until the end of the COVID national public health emergency period. According to a news report from the Minnesota StarTribune, United Healthcare had previously decided to retrospectively deny payment for an emergency department visit if UHC deemed the patient’s presenting problem or the intensity of diagnostic services provided to be insufficiently emergent. Anthem Blue Cross Blue Shield instituted a similar policy for emergency room visits in 2018 but then seems to have stopped enforcing the policy after being sued by the American College of Emergency Physicians.
UnitedHealthcare alleges that the purpose of this policy is to decrease health care costs. Tracey Lempner, a United Healthcare spokesperson stated that the insurer was trying “to make care more affordable” by encouraging patients without emergencies to “seek treatment in a more appropriate setting.” In other words, UHC wants patients with potentially non-urgent medical conditions to go to an urgent care facility rather than an emergency facility. UnitedHealthcare’s policy would reportedly create a “$32 billion savings opportunity per year.”
Denying Payment for “Nonemergent” Emergency Care Relies Heavily on Hindsight Bias
The largest problem with these retrospective denial policies is that they rely heavily upon hindsight bias. Hindsight bias is the tendency to perceive prior events as being more predictable than they actually were. Know any Monday morning quarterbacks who could have singlehandedly called the plays that would have lifted their professional football teams from the jaws of defeat? Classic hindsight bias. Plaintiff attorneys often use hindsight bias to persuade juries that physicians are negligent when patients suffer bad outcomes. After all, if the allegedly proper course of care was obvious to a non-medical attorney who stands to make hundreds of thousands of dollars for a favorable verdict, shouldn’t it have been obvious to a reasonably careful doctor? Hindsight bias isn’t fair to quarterbacks, it isn’t fair to malpractice defendants, and it isn’t fair to United Healthcare patients.
UnitedHealthcare’s spokesperson tried to illustrate how easy it is to recognize “non-emergent” issues by giving an example of “pink eye” as a condition that would receive little or no reimbursement. This is what happens when woefully uninformed non-medical spokespeople and CPA/CEOs create medical policy. Acute glaucoma can present as a “pink eye”. That’s a medical emergency. Hyphema can present as a “pink eye.” That’s a medical emergency as well. So are endophthalmitis, iritis, orbital cellulitis, bacterial keratitis, uveitis, elevated intracranial pressure, temporal arteritis, Kawasaki disease, and multiple other conditions – all of which can present as a “pink eye.” UnitedHealthcare and Anthem will cover the costs for these emergencies if they’re diagnosed – that isn’t the issue. The issue is that many health issues are time-sensitive and insurance companies are using hindsight bias and the threat of financial penalty through crippling medical bills to make their customers fear seeking emergency medical care. If a patient seeks emergency room care for “pink eye” and is diagnosed with allergies, UnitedHealthcare will say the patient should have known all along that the symptoms were not an emergency and therefore the patient will be responsible for the hospital bills for the emergency treatment. If the same emergency department patient with the same “pink eye” is diagnosed with endophthalmitis, well, the patient should have known that all along, too. What took you so long to go to the emergency department, anyway? There is simply no way for patients to prospectively determine whether an “emergency” red eye exists. That’s why ACEP helped create “prudent layperson” laws. If a prudent layperson would think a complaint constitutes an emergency, an insurer has to pay for the medical care. Other conditions that United Healthcare considers “primary care treatable” (and therefore nonemergent) include cough, dizziness, headache, and nausea. I could probably list hundreds of emergent diagnoses presenting as these “nonemergent” symptoms. Think about the premises of UnitedHealthcare’s policy, though. In some cases, emergency physicians order multiple diagnostic tests to rule out an emergency in patients with United Healthcare’s “nonemergent” symptoms. United Healthcare expects patients to be smarter than their doctors by knowing whether they have an actual emergency without any medical training and without the benefit of diagnostic testing. Dare go to the emergency department for minor ailments and face the threat of medical bankruptcy.
Another underlying theme in United Healthcare’s policy is the overused trope that the emergency department is busting at the seams with non-urgent patients who know they don’t have emergencies but who are just too lazy to see their primary care physicians. Studies have shown that only 3% to 10% of emergency department patients are non-urgent.
Denying Payment for “Nonemergent” Emergency Care Won’t Make Healthcare More Affordable
UnitedHealthcare’s policy isn’t just about keeping lazy non-emergent patients out of the emergency department, though. United Healthcare’s spokesperson says that denying emergency benefits or providing limited coverage for non-emergent issues will decrease healthcare costs and “make healthcare more affordable.” I question those claims. Emergency medical care presents a pretty good return on investment. Government data compiled by ACEP study showed that emergency room services cost only 2% of the total annual healthcare expenditures in the US. Using 2019 numbers, those costs would total $76 billion out of the $3.8 trillion spent. United Healthcare wants people to believe that it will realize $32 billion in savings just by keeping those pesky eye allergies, runny noses, and coughs out of the emergency department? That’s about 40% of all emergency medicine healthcare expenditures. Don’t kid yourself. Also remember that while hospitals may bill hundreds of dollars for an allegedly non-emergent issue, contractual discounts mean that large health insurers like United Healthcare pay just a fraction of those bills – if they pay at all.
One of the ways major insurers do not seem to be making healthcare more affordable is by reducing premiums and returning those costs to its insureds. UnitedHealthcare’s profits have risen double digits every year for at least the past 5 years. During the COVID epidemic in 2020, United Healthcare’s profits shot up to $67 billion. Its profits for the first quarter of 2021 are already up 12.6% over last year. Former Chief Executive David Wichmann earned $42.1 million in 2020 after earning $52.1 million in 2019. Imagine all the pink eyes we could treat with even half that money.
If UnitedHealthcare was serious about “decreasing costs” with its retrospective denial policy, it should have structured its policy a little differently. Instead of retrospectively denying payment when patients seek “unnecessary” ED care, United Healthcare should issue mandatory policy premium refunds to patients in any months that patients retrospectively don’t require medical care. Think of all the decreased costs to the patients! Would Brian Thompson and the UnitedHealthcare Board accept those cost savings for patients? Doubtful. You see, United Healthcare’s policy was never about saving money for patients, it has always been about increasing the profits of the largest health insurer in the US by denying appropriate and cost-effective healthcare to patients and by denying fair reimbursement to hospitals and providers.
Takeaways
Emergency physicians ignored a public relations issue over reimbursement for medical care once before. As a result, insurance companies convinced legislators that emergency physicians were evil for sending bills to patients. Legislators then created laws prohibiting “balance billing” and essentially forced emergency physicians to enter into unscrupulous contract terms with insurers. If UnitedHealthcare’s policy remains in force, emergency physicians would be forced by law to provide a screening exam for “nonemergent” complaints, UnitedHealthcare could refuse to pay for evaluation of those “nonemergent” complaints, and emergency physicians could then be prevented by law from billing patients for evaluation of those “nonemergent” complaints. That situation should make any CPA/CEO giddy with excitement. Of course, it should scare the hell out of anyone with a UnitedHealthcare insurance plan.
When insurance companies emphasize “affordable” healthcare, it reminds me of this quote from Lord Farquaad in the movie Shrek: “Some of you may die, but it’s a sacrifice I am willing to make.”
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UPDATE January 7, 2022
In a December 29, 2021 letter, the American Hospital Association expressed concern with the expected January 1, 2022 implementation of United Healthcare’s policy to deny claims for non-emergent care, stating in part:
We are very concerned about the impact it will have on patients and their providers. Like its predecessor, this new policy will make patients much more reluctant to seek needed emergency care out of fear of a coverage denial…. The policy also will place an incredible burden on hospitals’ clinical workforce at a time when the demands on them are already simply extraordinary. It will pull clinicians away from the bedside to collect, review and submit paperwork, often multiple times over, to try and obtain coverage for their patients.
In a response dated December 30, 2021, UnitedHealthcare CPA/CEO Brian Thompson wrote:
There is no new policy regarding coverage criteria for emergency care being implemented on January 1, 2022. Further, UnitedHealthcare has no intention of implementing any such new policy for its fully insured business. From your letter, it is clear that our attempt to clarify resulted in confusion, and we are using your feedback to be clearer regarding our intent.
While patients may have won this battle against the big insurance companies, the war is far from over. Look for further attempts to re-implement policies similar to this in the future.