In 2017, insurance company Anthem, Inc. began implementing new medical coverage policies that affect emergency services and medical imaging. As to the former, Anthem's new policy allows it to reduce coverage for emergency services provided if Anthem later determines that the situation giving rise to the services was not, after all, an emergency. As to the latter, Anthem is denying certain claims for medical imaging performed at hospitals rather than at clinics.

In March of this year, Senators Claire McCaskill (D-Mo.) and Ben Cardin (D-Md.) sent a letter to the Department of Health and Human Services and the Department of Labor asking that the departments investigate whether Anthem's emergency services policy violates the Prudent Layperson Standard. That standard was introduced by the Senate in 1997 related to Medicare and Medicaid managed care plans. It has since been codified in the Affordable Care Act and in 47 state statutes. Sen. McCaskill also sent a letter directly to Anthem asking how it was complying with the standard and sought documents from Anthem related to how the new policies may represent a cost savings benefitting the insurer.

The Prudent Layperson Standard sought to address an issue whereby insurance companies determined coverage based on the diagnosis rather than the symptoms. For example, if a patient sought emergency services related to severe chest pain that the doctor later diagnosed as nothing more than indigestion, then insurance companies would not pay for the emergency services. That example is courtesy of the American College of Emergency Physicians (ACEP), which fought for the Senate to implement the standard and is now fighting against Anthem's new emergency services policy. As part of its campaign against Anthem, ACEP released two videos criticizing Anthem's move. The videos call Anthem's move unlawful and warn viewers that an unchallenged Anthem will embolden other insurers to adopt similar policies.

More than critical videos, Anthem faces state-level lawsuits. Piedmont Hospital in Georgia filed a complaint against Anthem alleging breach of contract and false advertising. In its complaint, Piedmont discusses Anthem's implementation of the policy changes in the states where Anthem operates: California, Colorado, Connecticut, Indiana, Kentucky, Maine, Missouri, Nevada, New Hampshire, New York, Ohio, Virginia, Wisconsin, and Piedmont's home state of Georgia. Piedmont's complaint alleges that Anthem, through its emergency services policy, makes its determination of coverages based on a “black box” of codes for what it deems nonemergencies. According to the complaint, Anthem and Piedmont engaged in an unsuccessful mediation in January 2018. According to a press release dated April 25, Anthem announced that it had settled with Piedmont.

Another suit, filed by Sentara Healthcare, focuses on the medical imaging policy and alleges that it likewise constitutes a breach of contract. That policy states more specifically that claims must satisfy certain criteria for coverage of radiologic imaging performed in a hospital outpatient setting, while the same imaging performed in a less expensive clinic setting would be covered despite those criteria. The spokesperson for the Missouri Hospital Association (MHA), David Dillon, provided Bloomberg Law with an example of how the imaging policy can render manageable situations fatal: A patient in rural Missouri went to an emergency room complaining of stomach pain. She was directed to drive 60 miles to an outpatient facility for imaging that Anthem would cover. As it turned out, the patient had appendicitis and the delay necessitated by the drive could have proved problematic indeed.

MHA also cites data from the Hospital Industry Data Institute to support the claim that the emergency room denials disproportionately affect women and minorities. Specifically, MHA points out that 10.5 percent of all deniable Anthem emergency department claims are female-specific, while fewer than 1 percent are male-specific. Further, applying Anthem's 2017 policies to 2016 data in Missouri, MHA presents a counterfactual where 61 percent of denied claims would be for female patients and 20 percent of denied claims would be for nonwhite patients (though such patients represented only 16 percent of Missouri's nonelderly insured population in 2016).

A Vox article published Jan. 29, put a human face on Anthem's policies, see Kliff, Sarah. “An ER visit, a $12,000 bill—and a health insurer that wouldn't pay.” Vox. Jan. 29, 2018. A mid-20s Kentucky resident named Brittany Cloyd entered the Frankfort Regional Medical Center's emergency room on July 21, 2017, with severe stomach pain and a fever. The hospital promptly put her in a wheelchair and wheeled her back to a room. Her mother, a former nurse, urged her to go to the hospital because the symptoms sounded like appendicitis.

As it turned out, Cloyd was suffering from ovarian cysts for which the hospital gave her pain medication and instructions to follow up with a gynecologist. Cloyd was insured through Anthem. Though this sounds like precisely the good faith situation that the Prudent Layperson Standard was meant to address, Cloyd received an invoice for $12,596 that Anthem refused to cover. The denial letter that Anthem sent to Cloyd stated that it would not cover emergency services related to pelvic pain that was, ultimately, not an emergency. Anthem's letter listed examples of issues that would be considered emergencies such as stroke, heart attack and severe bleeding. Cloyd states in the Vox article that with a mortgage and student loans, she did not have $1,000 in available savings, much less $12,000.

Though Anthem is getting the most attention, the idea underlying the emergency services policy appears to have originated with Medicaid. In 2015, Indiana implemented a policy that Kentucky more recently adopted whereby Medicaid enrollees are charged $20 for the first unnecessary emergency room visit, $50 for a second and $75 for a third. While this Medicaid policy is clearly aimed at curbing the inappropriate use of emergency rooms, it also places a serious responsibility in the hands of patients: assessing their own medical conditions before seeking care.

While Anthem's cost-saving efforts are understandable and may, in certain circumstances, prevent the abuse of medical resources, it is important for providers, patients and their attorneys to understand Anthem's new policies and keep an eye out for similar efforts elsewhere in the health care insurance industry.

—Andrew Stein, an associate at Lamb McErlane who focuses his practice on health and business law, assisted in the preparation of this article.

Vasilios J. Kalogredis is chairman of Lamb McErlane's health law department. He represents many medical and dental groups and thousands of individual physicians and dentists.

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Anthem faces legal challenges over ER, medical imaging policies

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