Solicitation of Comments on the OIG/HCFA Special Advisory Bulletin on the Patient Anti-Dumping Statute

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Office of Inspector General and Health Care Financing Administration

Solicitation of Comments on the OIG/HCFA Special Advisory

Bulletin on the Patient Anti-Dumping Statute

AGENCY: Office of Inspector General (OIG) and Health Care Financing

Administration (HCFA), HHS.

ACTION: Notice of Proposed Special Advisory Bulletin.

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SUMMARY: This Federal Register notice seeks the input and comments of

interested parties on a Special Advisory Bulletin being developed by

the OIG and HCFA designed to address requirements of the patient anti-

dumping statute and the obligations of hospitals to screen all patients

seeking emergency services and provide stabilizing medical treatment to

enrollees of managed care plans if their condition warrants it. In

developing this proposed issuance and soliciting public comment, it is

our goal to provide clear and meaningful advice with regard to the

application of the anti-dumping provisions, and ensure greater public

awareness of the hospitals' obligations in providing emergency medical

services to those individuals insured by managed care plans.

DATES: To assure consideration, comments must be delivered to the

address provided below by no later than 5 p.m. on January 6, 1999.

ADDRESSES: Please mail or deliver your written comments and

recommendations to the following address: Office of Inspector General,

Department of Health and Human Services, Attention: OIG-33-SFA, Room

5246, Cohen Building, 330 Independence Avenue, S.W., Washington, D.C.

20201.

We do not accept comments by facsimile (FAX) transmission. In

commenting, please refer to file code OIG-33-SFA. Comments received

timely will be available for public inspection as they are received,

generally beginning approximately 3 weeks after publication of a

document, in Room 5541 of the Office of Inspector General at 330

Independence Avenue, S.W., Washington, D.C., on Monday through Friday

of each week from 8:00 a.m. to 4:30 p.m.

FOR FURTHER INFORMATION CONTACT: Joel Schaer, Office of Counsel to the

Inspector General, (202) 619-0089.

SUPPLEMENTARY INFORMATION: In an effort to identify and eliminate

fraud, waste and abuse in the Department's health care programs, the

OIG periodically develops and issues Special Fraud Alerts and, with the

cooperation of HCFA, Advisory Bulletins to alert health care providers

and program beneficiaries about potential problems. This proposed

bulletin is being developed by the OIG and HCFA to address the

principal requirements of the patient anti-dumping statute (section

1867 of the Social Security Act) and to discuss how the requirements of

that statutory provision apply to individuals insured by managed care

plans that require ``prior authorization'' for emergency services. We

have attempted to conform this proposed bulletin with policies set

forth in the HCFA State Operations Manual on Provider Certification

(Transmittal No. 2, May 1998) which provides guidelines and

investigative procedures for reviewing the responsibilities of Medicare

participating hospitals.

Section 1867 of the Act imposes specific obligations on Medicare-

participating hospitals that offer emergency services with respect to

individuals coming to the hospital and seeking treatment of possible

emergency medical conditions. Specifically, the draft Special Advisory

Bulletin proposes to address: (1) The obligations of these hospitals in

providing screening to all patients seeking emergency services and

stabilizing emergency treatment to individuals seeking such care; (2)

the special concerns in the provision of emergency services to

enrollees of managed care plans; (3) the rules governing Medicare and

Medicaid managed care plans with respect to prior authorization

requirements and payment for emergency services; and (4) what types of

practices will serve to promote compliance by hospitals with the

patient anti-dumping statute when managed care enrollees seek emergency

services. We would appreciate receiving specific comments,

recommendations and suggestions on the issues discussed in this

proposed bulletin.

Set forth below for comment is the proposed OIG/HCFA Special

Advisory Bulletin addressing the patient dumping statute.

OBLIGATIONS OF HOSPITALS TO RENDER EMERGENCY CARE TO ENROLLEES OF

MANAGED CARE PLANS

What Are the Obligations of Medicare-Participating Hospitals That

Offer Emergency Services to Individuals Seeking Such Services?

The anti-dumping statute (section 1867 of the Social

Security Act; 42 U.S.C. 1395dd) sets forth the Federally-mandated

responsibilities of Medicare-participating hospitals to individuals

with potential emergency medical conditions.

Under the anti-dumping statute, a hospital must provide to

any person who comes seeking emergency services an appropriate medical

screening examination sufficient to determine whether he or she has an

emergency medical condition, as defined by statute. When appropriate,

ancillary services routinely available at the hospital must be provided

as part of the medical screening examination.

If the person is determined to have an emergency medical

condition, the hospital is required to stabilize the medical condition

of the individual, within the staff and facilities available at the

hospital, prior to discharge or transfer.

If the patient's medical condition cannot be stabilized

before a transfer requested by the patient (or determined to be in the

patient's best interest by the responsible medical personnel), the

hospital is required to follow very specific statutory requirements

designed to facilitate a safe transfer to another facility.

A hospital may not delay the provision of an appropriate

medical screening examination or further medical examination and

stabilizing medical treatment in order to inquire about the

individual's method of payment or insurance status.

Regulations implementing these statutory obligations are

found at 42 CFR part 489. The anti-dumping statute is enforced jointly

by the Health Care Financing Administration (HCFA) and the Office of

Inspector General (OIG) of the U.S. Department of Health and Human

Services (HHS).

Sanctions that may be imposed by HHS for violations of the

anti-dumping statute include the termination of the hospital's provider

agreement, and the imposition of civil money penalties against both the

hospital and the physician responsible for examination, treatment, or

transfer of an individual. In addition, the anti-dumping statute

provides for the exclusion of such physician if the violation is gross

and flagrant or repeated.

Why Is There a Special Concern About the Provision of Emergency

Services to Enrollees of Managed Care Plans?

Many managed care plans require their members to seek prior

authorization for some medical services, including emergency services.

As noted above, the anti-dumping statute prohibits a hospital's inquiry

about a patient's method of payment or insurance status, or use of such

[[Page 67487]]

information, from delaying a screening examination or stabilizing

medical treatment. It has come to our attention that some hospitals

routinely seek prior authorization from a patient's primary care

physician or from the plan when a managed care patient requests

emergency services, since the failure to obtain authorization may

result in the plan refusing to pay for the emergency services. In such

circumstances, the patient may be personally liable for the costs.

A reasonable argument can be made that patients (other than those

arriving in dire condition) should be informed when they request

emergency services of their potential financial liability for services.

Some would go further and argue that the hospital itself should seek

prior approval from the patient's health plan for emergency services to

preserve the patient's right to seek coverage for such services.

However, our concern is that, such an inquiry may improperly or unduly

influence patients to leave the hospital without receiving an

appropriate medical screening examination. This result would be

inconsistent with the goals of the anti-dumping statute and could leave

the hospital exposed to liability under the statute.

Investigations of allegations of the anti-dumping statute

violations across the country have persuaded the OIG and HCFA that

managed care patients may be at risk of being discharged or transferred

without receiving a medical screening examination, largely because of

the problems inherent in seeking ``prior authorization.'' Hospitals

sometimes are caught between the legal obligations imposed under the

anti-dumping statute and the terms of agreements which they have with

managed care plans. For example, some Medicaid managed care

contractors, as a condition of contracting with hospitals to provide

services to their enrollees, have attempted to require such hospitals

to obtain prior authorization from the plan before screening or

treating an enrollee in order to be eligible for reimbursement for

services provided.

The OIG's and HCFA's view of the legal requirements of the anti-

dumping statute in this situation is as follows. Notwithstanding the

terms of any managed care agreements between plans and hospitals, the

anti-dumping statute continues to govern the obligations of hospitals

to screen and provide stabilizing medical treatment to individuals who

come to the hospital seeking emergency services regardless of the

individual's ability to pay. While managed care plans have a financial

interest in controlling the kinds of services for which they will pay,

and while they may have a legitimate interest in deterring their

enrollees from over-utilizing emergency services, no contract between a

hospital and a managed care plan can excuse the hospital from its anti-

dumping statute obligations. Once a managed care enrollee comes to a

hospital that offers emergency services, the hospital must provide the

services required under the anti-dumping statute without regard for the

patient's insurance status or any prior authorization requirement of

such insurance.1

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\1\ Separate and apart from the anti-dumping statute, in

accordance with sections 1857(g), 1876(i)(6), 1903(m)(5) and 1932(e)

of the Social Security Act, the OIG (acting on behalf of the

Secretary) has the authority to impose intermediate sanctions

against Medicare and Medicaid contracting managed care plans that

fail to provide medically necessary services, including emergency

services, to enrollees where the failure adversely affects (or has a

substantial likelihood of adversely affecting) the enrollee.

Medicare and Medicaid managed care plans that fail to comply with

the above provision are subject to civil money penalties of up to

$25,000 for each denial of medically necessary services.

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What About Arrangements Between Hospitals and Managed Care Plans

for ``Dual Staffing'' of Emergency Departments?

Some managed care organizations (MCOs) and hospitals have entered

into, or are considering entering into, arrangements whereby the

hospital permits the MCO to station its own physicians in the

hospital's emergency department, separate from the hospital's own

emergency physician staff, for the purpose of screening and treating

MCO patients who request emergency services. This kind of arrangement

is known as ``dual staffing.'' In a dual staffing setting, two separate

groups of physicians would be providing emergency care, perhaps using

different policies and protocols, performing different procedures,

using different referral practices and drug formularies, relying on

different on-call physicians, and having different credentials.

It is believed by some that dual staffing in emergency departments

can facilitate the expeditious provision of services to MCO patients by

physicians and other practitioners in their own health plans,

particularly when patients present in emergency departments in stable

condition. However, some hospitals and emergency physicians have raised

questions about how the requirements of the patient anti-dumping

statute may affect dual staffing arrangements, and we have been

considering how to respond. As interpreted by this Department, the

statute requires that a hospital and its physicians provide medically

adequate screening and stabilization, supported by professionally

recognized standards of care, to individuals seeking emergency

services. Theoretically, one could construct two equally good emergency

service ``tracks,'' each adequately staffed and each with equally good

access to all of the medical capabilities of the hospital, such that

both MCO and non-MCO patients received equal access to screening and

stabilizing medical treatment. This arrangement would seem to satisfy

the requirements of the anti-dumping statute.

Absent such equivalency, implementation of dual staffing raises

some concerns under the patient anti-dumping statute. For example, what

if either the MCO or non-MCO track is understaffed or simply

overcrowded, and a patient in a particular track is subjected to a

significant delay in screening and stabilizing treatment, even though a

physician in the alternative track was available to see the individual?

What if the protocols, referral patterns, use of specialists and

patient guidelines are substantially different between the MCO and non-

MCO tracks such that two different standards of care are provided in

performing screenings or stabilizing treatment? How can a hospital be

sure that all patients requesting emergency services receive, as

required by statute, an appropriate screening examination within the

full capabilities of the hospital, and necessary stabilizing treatment

within the capability of the staff and facilities of the hospital, if

the MCO track operates independently from the hospital's own emergency

care system? These are difficult questions, and we have not yet

determined how to treat issues related to dual staffing under the

patient anti-dumping act. As a result, we are specifically soliciting

comments and suggestions from the public on this issue, and we expect

to offer some specific guidance in this area in the final version of

this Special Advisory Bulletin.

What are the Rules Governing Medicare and Medicaid Managed Care

Plans with Respect to Prior Authorization Requirements and Payment

for Emergency Services?

There are special requirements for managed care plans that contract

with Medicare and Medicaid to provide services to beneficiaries of

those programs. Congress has specified that Medicare and Medicaid

managed care plans may not require prior authorization for emergency

services, and must pay for such services, without

[[Page 67488]]

regard to whether the hospital providing such services has a

contractual relationship with the plan. Under statutory amendments

recently enacted in the Balanced Budget Act (BBA) of 1997 (Pub. L. 105-

33),2 Medicare and Medicaid managed care plans are

prohibited from requiring prior authorization for emergency services,

including those that ``are needed to evaluate or stabilize an emergency

medical condition.'' Moreover, Medicare and Medicaid managed care plans

are required to pay for emergency services provided to their enrollees.

The obligation to pay for emergency services is based on a ``prudent

layperson'' standard, which means that the need for emergency services

should be determined from a reasonable patient's perspective at the

time of presentation of the symptoms.3

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\2\ See section 4001 of the BBA, which created section 1852(d)

of the Act. Section 1852(d) covers emergency services and prior

authorization for Medicare enrollees. Also, section 4704(a) of the

BBA created section 1932(b) of the Act, which contains Medicaid

provisions covering emergency services and prior authorization.

\3\ With respect to Medicare, prior authorization requirements

were already explicitly prohibited by regulations before the passage

of the BBA for emergency services provided outside an HMO or

competitive medical plan (42 CFR 417.414(c)(1)), and by implication

for services provided within such a plan. Similarly, while the BBA

clarified and codified the ``prudent layperson'' standard, a

variation of this standard has always been part of the Medicare

policy for managed care plans. However, all of these requirements

are new to Medicaid.

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What Practices Will Promote Compliance with the Anti-Dumping

Statute by Hospitals When Managed Care Enrollees Seek Emergency

Services?

The OIG and HCFA are concerned that discussion by hospital

personnel with a patient regarding the possible need for prior

authorization, or his or her potential financial liability for medical

services provided by a hospital that offers emergency services, could

influence patients to leave the emergency department without receiving

an appropriate medical screening examination. Without also informing

the patient of his or her rights to a medical screening examination and

to stabilizing medical treatment if the patient's condition warrants

it, a discussion about insurance, ability to pay and seeking prior

authorization may impede a hospital's compliance with its obligation

under the anti-dumping statute. Discussions between a hospital staff

member and a patient regarding potential prior authorization

requirements and their financial consequences that have the effect of

delaying a medical screening are violations of the anti-dumping

statute. Moreover, the OIG and HCFA believe that in the absence of an

initial screening, the decision of a managed care plan regarding the

need for treatment is likely to be ill-informed. Patients are entitled

to receive a medical screening examination and stabilizing medical

treatment under the anti-dumping statute regardless of a hospital's

contract with a health plan that requires prior authorization.

Accordingly, the OIG and HCFA suggest the following practices to

minimize the likelihood that a hospital will violate the statute:

No Prior Authorization Before Screening or Stabilization.

It is not appropriate for a hospital to request or a health plan to

require prior authorization before the patient has received a medical

screening examination to determine the presence or absence of an

emergency medical condition or before the patient's emergency medical

condition is stabilized.4

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\4\ Of course, this would not preclude an emergency physician

from contacting the patient's physician at any time to seek advice

regarding the patient's medical history and needs that may be

relevant to the medical screening and treatment of the patient.

Further, a patient who has not already contacted his or her health

plan is free to do so at any time during his or her wait for

emergency services.

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No Financial Responsibility or Advanced Beneficiary

Notification Forms. Prior to performing an appropriate medical

screening examination, the hospital should not ask a patient to

complete a financial responsibility form or an advanced beneficiary

notification form, and should not ask the patient to provide a co-

payment for any services rendered. Such a practice could deter the

patient from remaining at the hospital to receive care to which he or

she is entitled and which the hospital is obligated to provide

regardless of ability to pay, and could cause unnecessary delay.

Qualified Medical Personnel Must Perform Medical Screening

Examination. A hospital should ensure that either a physician or other

qualified medical personnel (i.e., hospital staff approved by the

hospital's governing body to perform certain medical functions)

provides an appropriate medical screening examination to all

individuals seeking emergency services. Depending upon the individual's

presenting symptoms, this screening examination may range from a

relatively simple examination to a complex one which requires

substantial use of ancillary services available at the hospital and on-

call physicians.

When a Patient Inquires About Financial Liability for

Emergency Services. If a patient inquires about his or her obligation

to pay for emergency services, such an inquiry should be answered by a

staff member who has been well trained to provide information regarding

potential financial liability. This staff member also should be

knowledgeable about the hospital's anti-dumping statute obligations and

must clearly inform the patient that, notwithstanding the patient's

ability to pay, the hospital stands ready and willing to provide a

medical screening examination and stabilizing treatment, if necessary.

Hospital staff should encourage any patient who believes that he or she

may have an emergency medical condition to remain for the medical

screening examination and to defer further discussion of financial

responsibility issues until after the medical screening has been

performed. If the patient chooses to withdraw his or her request for

examination or treatment, a staff member with appropriate medical

training must discuss the medical issues related to a ``voluntary

withdrawal.''

Voluntary Withdrawal. If an individual chooses to withdraw

his or her request for examination or treatment at the presenting

hospital, a hospital must perform the following: (1) offer the

individual further medical examination and treatment within the staff

and facilities available at the hospital as may be required to identify

and stabilize an emergency medical condition; (2) inform the individual

of the risks and benefits of such examination and treatment, and of the

risks and benefits of withdrawal prior to receiving such examination

and treatment; and (3) take all reasonable steps to secure the

individual's written informed consent to refuse such examination and

treatment. The medical record should contain a description of the

examination, treatment, or both, if applicable, that was refused.

In the event that an individual, e.g., nurse, doctor, other

emergency room staff member or patient, believes that a hospital may

have violated the anti-dumping statute, that individual should report

the alleged violation to the HCFA office in the region in which the

hospital is located.

[[Page 67489]]

Dated: November 24, 1998.

June Gibbs Brown,

Inspector General.

Dated: November 24, 1998.

Nancy-Ann Min DeParle,

Administrator, Health Care Financing Administration.

[FR Doc. 98-32480 Filed 12-4-98; 8:45 am]

BILLING CODE 4150-04-P