A new protocol for ED claims reimbursement launched this month by UnitedHealthcare will bring down claims costs by ensuring accurate coding by providers, according to the insurer—but some hospitals have voiced concerns.
Daily Briefing is published by Advisory Board, a division of Optum, which is a wholly owned subsidiary of UnitedHealth Group. UnitedHealth Group separately owns UnitedHealthcare.
According to CDC, the number of ED visits rose 8.4% between 2013 and 2014, with the number of annual visits increasing from 130.4 million to 141.4 million—and a growing share of ED visits are coded at higher levels on a five-point scale hospitals use to bill for emergency care.
The levels are based on the severity and cost of patient interventions, Modern Healthcare reports, with Level 1 being the lowest level and Level 5 being the highest. According to the American College of Emergency Physicians (ACEP), examples of cases that would be coded at Levels 4 or 5, for instance, include blunt trauma or severe infections.
CMS has not set a national standard for ED coding, Modern Healthcare reports, and instead lets each hospital set its own framework. According to a 2012 report from HHS' Office of Inspector General, Level 5 codes for ED visits for Medicare beneficiaries between 2001 and 2010 increased by 21%, while the use of codes for other levels declined.
Details on new protocol
Under the new protocol, effective March 1, UnitedHealthcare reviews and potentially adjusts or denies facility claims for ED visits coded as Level 4 or Level 5 for patients covered through United's commercial and Medicare Advantage plans. According to UnitedHealthcare, the protocol does not affect patients' cost-sharing.
Specifically, UnitedHealthcare said it reviews applicable claims using the Optum ED Claim Analyzer. The tool looks at data such as comorbidities, diagnostic testing, and the patient's presenting problems. UnitedHealthcare said it will not review claims for facilities with billing Level 4 and Level 5 codes that do not deviate from the determination made by the analyzer tool.
According to UnitedHealthcare, the protocol has several exceptions. UnitedHealthcare will not review claims for:
- ED patients who are admitted to the hospital;
- Critical care patients;
- Patients who are younger than 2 years old; or
- Patients who die in the ED.
The protocol also does not apply to "claims with certain diagnoses that often require greater-than-average resources when treated in the ED, such as significant nursing time," Modern Healthcare reports.
The insurer said while the new protocol will apply to all facilities—including freestanding EDs—that submit Level 4 and Level 5 billing codes, it anticipates the new protocol will affect only a small fraction of hospitals. Specifically, it expects the protocol will affect facilities that have had significant variation in cases that receive the highest severity codes. Facilities will be able to submit reconsideration or appeal requests for UnitedHealthcare's review decisions, the insurer added.
UnitedHealth said it based the protocol on findings from its claims data that showed more than a 50% increase in the frequency of Level 4 and Level 5 claims between 2007 and 2016. According to UnitedHealth, the rise in such claims has increased health care spending in the country by more than $1.5 billion, while also requiring patients to spend more out of pocket.
According to Modern Healthcare, the news follows Anthem's recent announcement that it will curtail ED costs by denying claims for ED care delivered in cases that are found not to be emergencies.
The American Hospital Association is reviewing the new UnitedHealthcare protocol and does not yet have an official stance. However, some providers have expressed concern.
According to Modern Healthcare, some hospitals say UnitedHealthcare's new policy could act as a way to deny claims. While the insurer said claim adjustments will not affect patient's cost-sharing, providers say if a claim is denied, patients could be billed the entire cost of the visit.
Jim Haynes, COO at the Arizona Hospital and Healthcare Association, said, "It'll just make it more difficult to collect for services."
Other stakeholders voiced concern that the appeals process could be challenging and time-consuming because providers do not know the details of the insurer's algorithm for assessing codes. Andrew Wheeler, VP of finance at the Missouri Hospital Association, said of the protocol, "They've got this point system out there, but they're not sharing what that point system is. … So there's no way for a hospital to duplicate what they're suggesting the level of assignment should be."
UnitedHealthcare, meanwhile, described the policy as an important way of ensuring accurate billing and limiting unnecessary costs. A spokesperson said, "The goal of this revised policy is to ensure accurate coding by hospitals, and ultimately promoting accurate coding of health care services is an important step in achieving the triple aim of better care, better health, and lower overall cost" (Haefner, Becker's Hospital Review, 3/7; Livingston, Modern Healthcare, 3/7).
Next, get primers for reducing avoidable ED utilization
Are specific patient populations making up a significant proportion of your ED visits? Each installment in our Right-Sizing ED Use primer series takes a lens to one of these frequent user subgroups.
We analyze the reasons these patients seek care in the ED, the business case for intervening, and solutions for reducing unnecessary ED use. The primers also feature in-depth case studies which highlight the operational details of successful and targeted programs from leading health care organizations.