UnitedHealthcare — which recently followed in the footsteps of Anthem, Inc. by rolling out a policy that would retroactively deny certain emergency room visit claims — is now planning to hold off on implementing the change after facing fierce blowback from provider groups. Health care policy experts, meanwhile, have mixed opinions about whether the policy was wise to implement in the first place during an ongoing pandemic.

“How anyone at United thought this was a good idea is a mystery for the ages,” says Joe Paduda, principal of Health Strategy Associates LLC. “The correct reaction would be for the company to ask why it handled this so poorly.”

But Ari Gottlieb, a principal with the health care consulting firm A2 Strategy Group, suggests that UnitedHealth could have made the new policy work. “I’m struck by the pre-emptive outrage at a policy that depending on how implemented, may have been quite limited in scope and impact and generally appeared to be aligned with lowering healthcare costs,” he tells AIS Health, a division of MMIT.

The saga started this month when the nation’s largest insurer posted a bulletin to providers on its website, informing them that effective July 1, “we will enhance our capabilities to assess emergency department (ED) facility commercial claims to determine if the ED event was emergent or non-emergent, according to existing plan provisions, in most states.”

If the visit was deemed non-emergent, it “will be subject to no coverage or limited coverage in accordance with the member’s Certificate of Coverage,” the insurer said. The policy was set to apply to UnitedHealth’s fully insured commercial plan members, but the firm added that “subject to regulatory approval we will continue to expand this capability to additional states and segments.”

Health care provider trade groups quickly marshaled their forces to hit back at UnitedHealth’s new policy. “The American College of Emergency Physicians (ACEP) believes that United’s new policy is in direct violation of the federal Prudent Layperson Standard, which requires insurance companies to provide coverage of emergency care based on the presenting symptoms that brought the patient to the emergency department, not the final diagnosis,” ACEP said in a statement emailed to AIS Health, a division of MMIT.

“Our main concern is that dangerous policies such as this will leave millions fearful of seeking medical care, right as we’re just getting hold of the COVID-19 pandemic and trying to get as many people vaccinated as possible,” the trade group added.

In its bulletin to providers, UnitedHealth notes that in the case of a denied claim for non-emergent care, they’ll be given a chance to “complete an attestation if the event met the definition of an emergency consistent with the prudent layperson standard.”

ACEP in 2018 sued Anthem over a similar policy of retroactive ER claims denials, and that legal action is ongoing.

AHA Worries About ‘Chilling Effect’

The American Hospital Association (AHA) also chimed in, sending a letter to UnitedHealthcare on June 8 that urged the insurer to “reverse the policy immediately.”

“Patients are not medical experts and should not be expected to self-diagnose during what they believe is a medical emergency,” AHA President and CEO Richard Pollack wrote. “Threatening patients with a financial penalty for making the wrong decision could have a chilling effect on seeking emergency care.” It’s especially problematic because “deferred and delayed care during the pandemic has already contributed to adverse health conditions and increased acuity,” he added.

Just one day later, UnitedHealth backtracked — but it didn’t abandon the idea of retroactive ER claims denials entirely. “Based on feedback from our provider partners and discussions with medical societies, we have decided to delay the implementation of our emergency department policy until at least the end of the national public health emergency period,” a spokesperson told AIS Health via email. “We will use this time to continue to educate consumers, customers and providers on the new policy and help ensure that people visit an appropriate site of service for non-emergency care needs.”

At least one provider trade group was not satisfied with that move, however. “We are aware that UHC announced today a temporary delay of implementation until at least the end of the national COVID-19 public health emergency (PHE),” Federation of American Hospitals President and CEO Chip Kahn wrote in a June 10 letter to UnitedHealthcare. “While the delay is appreciated, this temporary pause does not address the underlying policy that poses harmful and unnecessary risk to patients, regardless of its date of implementation.”

‘Negative Headlines’ Are a Risk

In a note to investors issued before UnitedHealth’s decision to delay its policy, Citi analyst Ralph Giacobbe downplayed the controversy, saying “we expect this policy to be applied in more egregious scenarios versus more broadly for the time being but do believe that [UnitedHealth] will continue to evolve its policy as it integrates more of its data tools through Optum.”

Nonetheless, he added, “it is an area to watch for negative headlines and potential ramification around legal or reputational impact.”

To Gottlieb, UnitedHealth’s decision to delay its new policy is a missed opportunity.

“If it was targeted at individuals who frequently use the ED for non-emergency purposes and offered education at first, then it could have been a tool to reduce unnecessary spending,” he says. Gottlieb also suggests that the provider reaction to UnitedHealth’s policy was telling.

“What I think the backlash shows is that insurers start from a challenging position when it comes to consumer perception, and anecdotes, when magnified by those who have an incentive to oppose a particular policy, can quickly move public opinion,” Gottlieb tells AIS Health. “More important than this specific policy, it illustrates the challenges in effecting real reforms that lower systemic healthcare costs, as every stakeholder group has advocates who are fighting to retain their piece of the profit pool.”

Will Policy Make a Dent in Costs?

But Loren Adler, associate director of the USC-Brookings Schaeffer Initiative for Health Policy, says he’s skeptical that UnitedHealth’s policy would have done much to actually curb inappropriate ER utilization.

“Obviously, the insurers are going to try to argue here that there’s a number of people who just use the ER as primary care, and some of those visits could be done at primary care offices. But you handle some of that with cost sharing,” he says, pointing out that copays for emergency care are typically much higher than for PCP visits.

As for UnitedHealth’s course reversal, “I’d like to think that this is a sign that consumer pushback can at times be an important force to restrain the worst impulses of insurers,” he tells AIS Health. “For United, the calculation is a trade-off between the money saved from not covering some emergency care versus the enrollment they lose because the product they’re selling is now less attractive.”

Contact Adler at ladler@brookings.edu, Gottlieb at ari@a2strategy.com and jpaduda@healthstrategyassoc.com.

by Leslie Small