Choice or Costs?

Texas insurer will take a closer look before paying ER claims

Health care today is expensive and health insurance companies face the task of controlling costs while respecting patient choice.

But how?

One way is for insurance companies to set up a network of health care providers with whom they contract specific rates and discounts for services. Patients who go outside that network for treatment usually face additional costs that insurance won’t pay for and they have to cover out-of-pocket.

But what about in an emergency? Emergency room visits are required by law to be covered, even if the facility is not in network. But one insurer is cracking down on that practice and Texas residents covered by Blue Cross are going to have to consider that very carefully the next time they go to an emergency room.

On Monday, Blue Cross and Blue Shield of Texas announced they would no longer pay for visits to out-of-network emergency rooms in some cases for about 500,000 customers with health maintenance organization plans.

A company doctor will scrutinize claims and if it is determined the immediate situation could have been handled by a less-expensive provider, such as a family doctor, it will be denied and left for the insured to pay.

Blue Cross says this will cut down on waste and fraud in the system. Critics say this cuts into patient choice and would keep some from seeking needed treatment for fear of being stuck with large medical bills.

Freestanding emergency rooms—those not affiliated with a hospital—may especially see a decline in patients as they often charge more than traditional ERs and many are not in-network.

The Texas Department of Insurance initially had doubts about Blue Cross’ plan, but finally gave the go-ahead.

Blue Cross says that genuine emergencies or any situation a reasonable person could consider an emergency would still be covered. And consumers would be able to appeal a denial.

Is this a good or bad thing? Hard to say. The more an insurance company pays out, the higher they must charge in premiums. So cutting down on unnecessary expenses benefits all their policyholders. But there is a chance— whether real or perceived—that more and more claims could be denied unjustly, leaving patients facing thousands of dollars in unpaid bills. It’s pretty easy to deny a claim and fight it out later in the appeal process.

In our view, insurers have an obligation to watch the bottom line. But they also have a duty to their policyholders. State regulators should keep a very close eye on how this works out in the coming months.