Blue Cross and Blue Shield of Texas will begin a controversial new program Monday in which it will not pay any expenses for an out-of-network emergency room visit if it is later determined the patient should have gone elsewhere for treatment.

The measure was originally set to roll out June 4, but vigorous complaints from the public and physicians, as well as concerns from the Texas Department of Insurance, delayed it for 60 days of further review.

Blue Cross and Blue Shield of Texas officials and TDI confirmed late last week that the deeply contentious program will now launch and that any sticking points have been resolved.

The new measure is expected to affect about 500,000 Texans with Blue Cross and Blue Shield health maintenance organization (HMO) plans.

Claims will be scrutinized after the fact by a medical director hired by the insurer to determine the reason a patient chose going to the emergency room and whether treatment could have instead been handled at a less expensive clinic or by a family physician. The company also will look for over-treatment.

“We have, quite frankly, identified quite a bit of fraud, waste and abuse that happens within the context of some of these treatments at some of these facilities,” Dr. Robert Morrow, president of the Houston and Southeast Texas office of Blue Cross and Blue Shield of Texas, said in a May interview.

Doctors outside coverage networks can bill at much higher rates, sometimes two to three times higher than if they were in-network, according to health care policy experts. Then, any portion of a bill not paid by the insurer can be shifted onto the patient, who must make up the difference in a practice known as "balance billing."

But critics continue to slam the program as harsh and punitive as it seeks to not only underpay providers but also forces patients to make untrained diagnoses and potentially skip treatment if they fear their medical bills will not be paid, doctors and their advocates have said.

Rhonda Sandel, CEO of Texas Emergency Care Center, a chain of four free-standing emergency rooms in Houston, Dallas and Lubbock, called the measure intentionally “intimidating” and “anti-patient.”

In an email Sunday, Sandel, a board member of the Texas Association of Freestanding Emergency Centers, said the true motive of the insurer was to "drive down the use of ER care (regardless of need) and to increase the profits of Texas' largest insurance provider at the expense of everyday Texans and their medical providers."

The rapidly growing industry, which got its start in Texas and operates walk-in emergency rooms, has frequently locked horns with insurers over reimbursement rates. The centers are staffed around-the-clock and provide much of the same testing and treatment options as traditional emergency rooms but are often out-of-network.

Insurance regulators initially questioned the program, announced in April, with worry of a chilling effect for sick or injured patients who might avoid care if they feared the bills. Twice state officials asked the insurer to clarify the guidelines ahead of the June launch and also to provide proof for the allegations that some emergency physicians and facilities were over-charging.

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The company responded with 56 pages of documentation, including copies of submitted claims and itemized bills, obtained by the Chronicle through a state records request. Included was a billed charge totaling $8,719.10 for bronchitis. The patient underwent a CT scan for $4,155.95 as well as what appears to be 15 separate lab tests. The charges also included an emergency room facility fee of $2,226.40 which was coded at the highest severity level. Such fees are coded on a scale of 1 to 5 depending on the amount of time, number of tests and complexity of the treatment. This one was given a 5. The name of the patient and provider were redacted.

Another submitted claim totaled $45,000 for a 22-year-old patient with tonsillitis whose treatment included 18 hours of observation. Yet another showed a $7,000 claim for a first-degree sunburn.

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Last week a TDI spokeswoman said in an email that the agency’s concerns had been satisfied.

Sandel on Sunday was critical of TDI’s capitulation to Blue Cross and Blue Shield.

“By permitting this harmful policy to go through, TDI is allowing for insurance consumers’ rights to be violated and potentially putting everyday Texans in clinical and financial distress,” she said in an email.

Morrow and other Blue Cross and Blue Shield officials bristle at the accusation they are putting anyone at risk. They say that they will not punish patients if they guess wrong, such as thinking they are having a heart attack that turns out to be indigestion.

And if it appears a patient made a reasonable decision in seeking care, even if it is out of network, their claim will likely be paid, Morrow has said, adding that denials only will happen if a patient’s treatment is found to be excessive or if they intentionally sought treatment in the wrong place.

“Over the last two months, Blue Cross and Blue Shield has diligently worked with the Texas Department of Insurance, providing all requested information regarding a process — being implemented (Monday) — to review emergency room charges of our retail and group HMO members” the insurer said in an emailed statement on Friday.

TDI said last week that its decision to let the measure stand came after assurances that any claims reviews would be done by a doctor, and that before a denial is issued a patient will have the right to have their doctor debate the treatment plan with the insurer’s doctor. Also, consumers will be able to appeal to an independent review organization.

In general, HMO plans already have tight restrictions on out-of-network care. The legal exception comes when a patient is having an emergency. In that case the insurer must cover out-of-network screenings, tests and treatments as if they were in-network, according to TDI.

Baked into the controversy is a piece of state insurance law called the “prudent layperson” standard which assesses whether a reasonable consumer without medical training would see a need for emergency care. Both sides in this fight say the standard is on their side.

Consumer groups in Texas are warily watching the drama unfold. They worry that patients rarely have any control over the tests or treatments that doctors order, especially in an emergency situation, yet they could be on the hook for hundreds if not thousands of dollars in bills if their insurer balks.

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Similar restrictions on emergency room visits by insurance giant Anthem has faced harsh criticism across the country as patients found their claims denied more and more often. The company faces a lawsuit over the policy, and a recent report shows that many of the initial denials were ultimately overturned after the patients appealed.

jenny.deam@chron.com

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