Much has been made here and elsewhere of the issue of cost-shifting. Cost-shifting happens when a provider treats a patient, does not receive ‘full’ reimbursement, and then increases what s/he charges another patient to make up the difference.
There’s a lot of evidence that cost-shifting is pervasive, expensive, and results in a hidden tax of about $1000 for the average insured family.
But what forces providers to treat the uninsured?
In a word, EMTALA.
I’ve identified EMTALA as one of the reasons providers are forced to care for the un- and under-insured, admittedly without understanding much about the law and its impact. So, here’s a quick summary of the law’s provisions as they relate to the un- and under-insured.
1. EMTALA (the Emergency Medical Treatment and Active Labor Act) has been around since 1986, when it was passed as part of the COBRA legislation by Congress.
2. EMTALA only applies to hospitals. It requires hospitals to treat patients presenting with emergent conditions, and prohibits transfer to another facility unless the patient is stabilized or the patient’s condition cannot be adequately served by the hospital.
3. It only applies to emergent conditions, defined as:
“”A medical condition manifesting itself by acute symptoms of sufficient severity (including severe pain) such that the absence of immediate medical attention could reasonably be expected to result in —
placing the health of the individual (or, with respect to a pregnant woman, the health of the woman or her unborn child) in serious jeopardy,
serious impairment to bodily functions, or
serious dysfunction of any bodily organ or part, or
“With respect to a pregnant woman who is having contractions —
that there is inadequate time to effect a safe transfer to another hospital before delivery, or
that the transfer may pose a threat to the health or safety of the woman or her unborn child.” (source is emtala.com)
4. Physicians’ responsibilities are limited to treating patients admitted by the hospital until the patient is stabilized, although they may be required to handle some follow-up care as well (this is a pretty grey area).
Oregon estimated EMTALA patients cost about $200 per admission, but this can vary widely.
And ER visits for non-urgent care (which, despite the technical provisions of the law, occurs often under EMTALA) cost two to five times more than if the care was delivered in a primary care setting.
Opinion time. EMTALA is a hidden tax, requiring hospitals to treat patients without hope of reimbursement. The cost of treatment is then shifted to other, paying patients, further driving up their health care costs.
And as more and more folks lose their insurance, those left with insurance cards in their wallets will find the increasing number of their ‘dependents’ is growing beyond their ability to cover them.
As an ER doc, I can tell you that our business is all about cost-shifting. Our charges are consistent — about $120/RVU. But what actually gets paid varies greatly by payor. Medicaid pays maybe $20/RVU, Medicare pays $39/RVU. Uninsured patients pay (maybe) $10/RVU on average. That’s just not sustainable in a practice where 60% of our patients fall into those three classes. So we contract with all commercial payors at MUCH higher rates — $70-110/RVU. And we are very open with the insurers that we need these rates to offset the cost of uncompensated care and undercompensated care. They don’t like it but the reality is acknowledged.
The American College of Emergency Physicians estimates that the average ER doc provides $150,000 in EMTALA-mandated uncompensated care annually.
BTW, though the law is written relating to hospitals it is also controlling to physicians who particiapte in the Medicare program as well.
Great post.
Joe – Cost shifting also occurs when Medicare and Medicaid use their power to dictate prices to reimburse providers (including hospitals) at less than their full cost of providing service, at least for some procedures. To the extent that they can, providers then try to make up the difference by shifting costs to private payers.
According to Charlie Baker, CEO of highly regarded (and non-profit) Harvard-Pilgrim Healthcare, private insurers reimburse providers at 120%-125% of Medicare rates on average and above 150% for certain procedures. Paul Levy, CEO of BIDMC in Boston, says that his hospital could not sustain its current high quality level of care if it had to accept Medicare rates from all comers, even if there were no uncompensated care. While Medicare can get away with cost shifting under the current system, it could probably no longer do so if it were the only payer without an adverse effect on care quality, and, perhaps, availability.
“his hospital could not sustain its current high quality level of care if it had to accept Medicare rates from all comers”
His – and most others.
IMO Congress likes the cost-shift, precisely because it is a “hidden” tax that does not require them to talk about raising tax rates, especially in the context of providing universal health care. Congress is also smart enough to know that the present ability to cost-shift goes away with “Medicare for all” or any equivalent federal health insurance scheme.
EMTALA has definitely encouraged uninsured patients to seek more of their care at hospital EDs rather than in other settings. I suspect it is a large part of the reason many ED waiting rooms are full of complaints that belong in a PCP office.
It’s a lousy turn of events, but it raises the question: should hospitals accept the “ED-as-24/7-PCP” shift and make an effort to make the ED more attractive for “semiurgent” insured patients? I suspect that’s one way to “water down” the losses caused by EMTALA. (And it appears hospitals are already doing this with things like ED fast tracks)
I believe this may be one reason that specialty medical facilities are becoming more popular. These facilities generally do not have to treat profit-draining emergency patients and thus they will be more profitable.
Referring to EMTALA as a tax is exactly correct. The law is compelling hospitals to spend money in which it will not be reimbursed which is, in essence, a tax.
My brother was recently Baker Acted at a large not for profit hospital, designate as a Baker Act receiving faility. He was immediately placed in horribly uncomfortable leather restraints, without any 1:1 observer in a cublicle with the curtians closed, and nnobody initiated a behavioral restraint flow sheet until, after almost 3 hours of abuse, abandonment, refusal to be given a bedpan or water, he was verbally abused by staff, no desecalation was tried, and he was forced to potty and urinate in his street clothes. He wss in great pain because of overly tight restraints. He was never de-escalated. finally, he forced the LARGE gurney he was restrainted to to fall over just to get someone to answer his cries. He could have been killed. The security guards set him back up with himself already attched tp the gurney. The doctor nor the bnurse had neither documented that he was initially restrained almost 3 hours prior. They documented it as if the policemen who Baker Acted him stayed at the hospital for 3 or 4 hours until his was “restrainteda” at almost 5 o’clock. My understanding is that the LEO’s responsibilities end upon dropping of the victime at the facitility. It’s as if the hospital is willing to let the police acept them as being responsible for his abuse.I do not know if tjhis is a serious issur or not. Please advise. Thank you very much.