Patients saved from huge ER bills by new law

http://www.msnbc.msn.com/id/37138869/ns/health-health_care/

By Maggie Mertens
updated 8:12 a.m. ET, Fri., May 21, 2010

When Kelly Arellanes fell off a horse and suffered a severe head injury in rural Arkansas, medics said she would need to be airlifted immediately to the nearest hospital — 50 miles away in Fort Smith. There, emergency surgery saved her life — but at a cost.

The hospital wasn't in her insurance network, so she and her husband ended up with $20,000 in out-of-pocket expenses that they wouldn't have incurred at their network hospitals 150 miles away in Little Rock.

If the new health law had already been enacted, Arellanes wouldn’t have had such a big emergency bill. Under the law, insurance companies must extend several new protections to patients who receive emergency care. One of the biggest guarantees: insurance companies can no longer pay less for emergency care at “out of network” hospitals — the hospitals with which they don’t have prior financial arrangements.

The equal coverage guarantee “was a major victory for us,” said Angela Gardner, president of the American College of Emergency Physicians. "People often can't stop to check to see if a particular hospital or doctor is in- or out-of-network when they are having an emergency," she said.

The new law also bars health plans from requiring prior authorization for emergency services. And it mandates that plans follow the "prudent layperson" rule. For example, if a person goes to the ER with chest pain, but ends up being diagnosed with indigestion, the claim has to be covered because going to the hospital under those circumstances made sense.

The provisions go into effect for every health plan issued after Sept. 23 — six months after the law was enacted — that offers emergency coverage.

For years, insurance plans have been denying ER claims for a variety of reasons. Although there is little data on the overall scope of the problem, a 2004 RAND Corp. study found that at least one out of every six claims for emergency department care was denied by two large HMOs in California.

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Research suggests that concerns about costs can keep people from going to the emergency room. A recent study in the Journal of the American Medical Association found that insured patients without financial concerns were more likely to seek emergency care within two hours of experiencing heart attack symptoms, but almost half of uninsured patients or patients with financial concerns waited six hours or more to seek care. And that can end up costing the system more if the condition becomes more serious while they wait.

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