Maximizing Out-of-Network Payment for Patients with ACA Exchange Products

Despite recent indications that the new Congress will repeal some or all of the Affordable Care Act (ACA)—with a proposed replacement bill being considered in the House at press time for this article—hospitals continue to treat patients covered by health plans purchased on the ACA health insurance exchange, and may continue to see such patients for some time. Thus, it is important for hospitals to continue efforts to ensure they receive the full payment to which they are entitled for treating patients with ACA exchange plans, particularly if the hospitals are out-of-network with respect to those plans.

ACA exchange plans, which are often structured as HMOs, generally do not provide out-of-network benefits. In general, a hospital must participate in the network established by the insurer for its ACA exchange plan to be entitled to receive payment for treating patients who are covered by the plan. There are two exceptions to this general rule.

First, a hospital is entitled to payment for any out-of-network care authorized by the insurer. As with other HMOs, an ACA insurer can always authorize out-of-network care. Insurers tend to do so when hospitals offer services that are not available from local in-network facilities, such as transplant services or other specialty services. This authorization often is provided before service, and at an agreed-upon rate.

Second, ACA exchange plans, like other health plans, are required under the Emergency Medical Treatment and Labor Act (EMTALA) to cover emergency services delivered by out-of-network providers. For purposes of the ACA, “emergency services” generally include the screening, evaluation, and stabilization of an emergency medical condition that a hospital is required to treat under EMTALA. State law also may require an ACA exchange plan to cover requested care delivered after the condition has been stabilized, unless the insurer denies authorization within a reasonable period.

Here are four strategies hospitals can use to ensure they receive the full payment to which they are entitled in either scenario.

Identify out-of-network patients as soon as possible.The first priority is to ensure patient access (or intake) staff are able to identify out-of-network patients quickly. This status is not always readily apparent: A hospital may participate in the networks of some of an insurer’s products, but not in the insurer’s ACA exchange plan network. Thus, an intake staff member could easily confuse an ACA exchange plan with a traditional employer-sponsored HMO plan and incorrectly assume that the patient is in-network.

Staff members can identify whether a patient’s plan is an ACA exchange plan in a number of ways. For example, the patient’s member ID card often is stamped with “QHP” (qualified health plan), indicating the health plan is a certified ACA exchange plan. Member ID cards also may include the name of the network or an abbreviation for the network name. Many insurers provide exemplars of their member ID cards on their websites.

Intake staff should be trained to recognize these features and be aware of each local insurer’s various products (particularly those in which the hospital does not participate).

Intake personnel also should request specific plan information, including the plan type, when verifying benefits and/or requesting preauthorization. For prescheduled surgeries, hospital personnel should always personally verify benefits and plan type in advance, even if the office of the patient’s treating physician asserts that authorization is not required or that it has verified the patient’s benefits.

Ensure requests for authorization are timely.As soon as an ACA patient is identified, authorization or an out-of-network referral should routinely be requested from the patient’s insurer, even for patients requiring emergency services.

For elective care, authorization should be requested even if it is not ordinarily required for a particular procedure, because out-of-network elective services always require authorization.

As noted previously, under the dictate of EMTALA, a hospital is not required to obtain authorization for emergency services provided to an ACA plan member, even if the hospital is out-of-network. However, once the patient’s condition has stabilized, the care being provided may no longer qualify as “emergency services,” and authorization for further care is likely to be required.

Many states impose strict time limits on an insurer’s ability to deny a request for authorization of post-stabilization care and require that the insurer respond to a such a request within a reasonable and, in some cases, specified time. In Texas, for example, if an HMO does not respond to a request for authorization of post-stabilization care within one hour, the care is deemed authorized.

Use effective appeals processes.A hospital (or any other provider) also may be able to obtain additional payment by appealing any underpayments. Studies have shown that a high percentage of adverse benefit determinations are reversed on appeal (with percentages cited ranging from 39 to 59 percent). Thus, whatever the stated reason for the underpayment or denial, an appeal has a strong chance of leading to additional payment.

The strategy is no different for patients with ACA exchange plans if the hospital is out-of-network: An appeal that specifically points out why the insurer’s adjudication of the claim was incorrect may lead to additional payment. For example, if the hospital performed an elective surgery that was authorized by the insurer, the hospital might be able to obtain payment by providing that authorization information. Or if the claim was the subject of a one-off agreement with the insurer to deliver the specified care at a prenegotiated rate, including that agreement with the appeal should lead to payment.

For underpayments where a hospital delivered emergency services to a patient with an ACA exchange plan, the success of the appeal will depend largely on state law. Under federal law, a hospital is entitled to be paid for emergency services rendered on an out-of-network basis using the greatest of the following metrics:

• The median amount that the insurer pays to participating providers for the same service
• The plan’s normal out-of-network payment rate
• The Medicare rate

However, state law may provide for greater protection to emergency-service providers than does federal law. For example, several states, including Texas and California, require that the insurer pay an out-of-network provider for delivery of emergency services at the usual and customary rate.

Hospitals also can take several practical steps to effectively appeal underpayments for emergency services delivered to patients with ACA exchange plans.

First, insurers often pay for emergency services by allowing an amount for only the hospital’s emergency department charge but denying payment for any other charges, even if they were incurred in treating the patient’s emergency medical condition. An appeal can point out which of these charges were incurred in treating the patient’s emergency condition and request those charges also be covered.

Second, a hospital can ask the insurer to identify the methodology used to determine the amount it allowed for emergency services. To the extent possible, the hospital should verify the payment methodology and raise any discrepancy found if there is evidence the insurer did not apply it correctly. If the insurer is unwilling to identify which methodology it used, the appeal can state that fact as well.

Third, if the hospital is in a state where an insurer is required to pay out-of-network providers of emergency services at the usual and customary rate, the appeal can describe how the insurer’s payment is lower than the usual and customary rate and request additional payment. It could be useful to cite to any information that indicates the rate the insurer paid was below the usual and customary rate, and could thus lead to additional payment, including the hospital’s chargemaster rates, any survey or other data that indicate the usual and customary rate in the geographic area, and the agreed-upon rates for the insurer’s other products (e.g., PPO, non-ACA HMO) if the hospital participates in those networks. Often, an insurer may allow an additional payment in response to an appeal.

Track underpayments.To the best of its abilities, a hospital also should track all underpaid claims for out-of-network emergency services to a particular insurer or insurers. Doing so will help identify trends in each insurer’s payment and the number of ACA members the hospital is seeing from each insurer. Hospitals can use this information to more effectively appeal future claims and to provide a basis for possible legal action if the volume of underpaid claims grows too high.

This information can point to deficiencies in a hospital’s admission processes, such as consistent delays in identifying a particular insurer’s ACA exchange plan members that leave the hospital with too little time to seek authorization for their treatment (for either elective services or post-stabilization care). Again, staff education is a key way to remedy such deficiencies.

ACA plans have proven frustrating for hospitals to navigate for full payment, and the current political landscape suggests there may be additional difficulties under any ACA replacement going forward. However, so long as products with similar limitations are offered on the health insurance market, hospitals should develop strategies for optimizing payment for their services—both on the front end, when patients present for services, and on the back end, when denials of benefits are appealed. In an ever-changing market, such strategies will ensure hospitals and other institutional providers can make the most of the benefits held by their patients and are enabled to deliver the best care possible.

Jennifer Rudenick Ecklund, JD, MSW, is a Partner Thompson & Knight LLP, Dallas.