Managed care requirements may violate federal law
MCOs may have procedures that comply with state law, yet still violate COBRA
HMOs who expect EDs to act as gatekeepers are putting them in an untenable position, according to experts who insist the requirements of managed care and COBRA (the Consolidated Omnibus Budget Reconciliation Act) just don’t mix. "The whole concept of prior authorization, frankly, is in direct conflict with COBRA," warns Charlotte Yeh, MD, FACEP, chief of emergency medicine at New England Medical Center in Boston and member of HCFA’s task force on EMTALA.
ED nurses must realize that their hospital’s managed care contracts do not supersede federal law, she stresses. "We are now coming into difficulties, because managed care has come into being subsequent to the original passage of the law," says Yeh.
If you tell a patient that the health plan has denied coverage, and they leave the ED as a result, the Health Care Financing Administration (HCFA) could interpret that as coercion—even if you’re ready, willing, and able to treat that patient. "If you require prior authorization and somebody leaves prior to the medical screening exam, you can get into trouble," Yeh stresses.
Surprisingly, several state legislatures have approved managed care plans with requirements that conflict with federal law. For example, in New York state, a managed care plan for Medicaid patients was approved by state legislators. The plan required EDs to get approval before seeing the patient, with many patients being referred to clinics after coverage was denied—a clear violation of COBRA. As a result, area hospitals were investigated and received violations.
Federal legislation is pending that would ban prior authorization by managed care. "If that were to occur, especially if there were penalties on managed care plans for violations, it would go a long way toward eliminating the pressure on hospitals to violate COBRA," says Steven Frew, a Rockford, IL-based health care attorney and consultant.
In the meantime, nurses must realize that federal law takes priority over any managed care requirements. "We have learned that Georgia Better Health Care [Georgia’s Medicaid health plan] and HCFA have two separate rules and we have to abide by both," says Janie Sims, RN, BSN, nurse clinician at University Hospital’s ED in Augusta, GA. To satisfy COBRA, the medical screening exam is done first, then the ED calls for authorization. "If it’s denied, we just document it, but we still have physicians see every one of those patients," she notes.
Some EDs have insisted that health plans pay for at least the screening exam, since it’s mandated by law. "We send out letters to them explaining HCFA guidelines, because what they don’t realize is if we’re not in compliance and they are not in compliance, both of us will get fined," Sims explains.
If a patient is seen but coverage is denied, hospitals may have to absorb the cost, says Frew. Still, many administrators feel it’s wiser to swallow a $100 bill than risk incurring a $50,000 COBRA violation by sending the patient elsewhere.
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