Health Plan To Compensate Consumers And Hospitals For Illegally Denied Claims

Attorney General Spitzer today announced an agreement with a major New York health plan, Blue Cross and Blue Shield of the Rochester area, to reimburse consumers who were erroneously billed for emergency room claims that should have been fully covered.

"State law is clear in requiring health plans to cover the cost of treating an emergency condition," Spitzer said. "This agreement will help ensure coverage for emergency room claims for those who are entitled to it by law and contract."

Spitzer's office began an investigation of Blue Cross after receiving complaints about coverage denials for emergency room visits. Blue Cross' denial notices stated that the claims were rejected for lack of a physician's referral and that the "member is liable." Hospitals subsequently billed the patients for the cost of the emergency room visit.

Under New York law, however, it is illegal to deny an emergency claim for lack of a physician referral where the presenting symptoms met the "prudent layperson" standard. This law requires health plans to cover emergency claims when the individual has symptoms that an ordinary, prudent layperson would believe pose a serious health risk.

"When an individual experiences severe chest pains and believes he or she may be having a heart attack, it is imperative that the patient seek immediate medical attention and not wait for health plan approval," Spitzer said. "Similarly, when parents see that their child is bleeding profusely, they should not hesitate in seeking emergency care for fear that the care will not be covered."

Spitzer said that consumers are entitled to coverage for claims that meet the prudent layperson standard even if the final diagnosis is not as severe as the patient originally thought. For example, if a patient with severe chest pains has an ultimate diagnosis of indigestion, the health plan must pay for the emergency room services.

Under the terms of the agreement, Blue Cross will review emergency claims it denied between April 1997 and November 2000 under its "Blue Choice" plan. More than 25,000 claims were denied during the period.

Blue Cross agreed to re-examine claims using the prudent layperson standard and to repay consumers and hospitals for claims meeting that standard, plus interest.

Diane Ashley, Executive Vice President of the Rochester Regional Healthcare Association, said: "We are extremely pleased with the outcome of this agreement and want to thank the Attorney General and his staff for their efforts. Patients and hospitals should not have to fight with an insurer to get a claim paid for a service that is clearly covered and appropriate according to the law. This is just one example of why we need to keep a watchful eye on the payment practices of insurers to be sure they are living up to their commitments to patients and providers."

Blue Cross also has agreed to notify its members about the claims error and the review process. The health plan has also agreed to keep in place a revised emergency claim review process that includes a prudent layperson review of presenting symptoms before any denial based upon the merits of the claim. The agreement further requires Blue Cross to pay $75,000 in costs to the Attorney General's office.

The Blue Cross matter is the latest in a series of cases in which the Attorney General's office has held health plans accountable under the state's managed care bill of rights. The office recently settled a case with GHI for improperly processing emergency claims. Previously, the Attorney General settled separate cases with HIP, Kaiser Permanente and Vytra for violating the state's ban on prior authorization of claims for emergency services that meet the prudent layperson standard. The office has also recently resolved cases in which health plans failed to comply with the information disclosure requirements of the managed care bill of rights by failing to provide copies of their subscriber contract and member handbook to consumers upon request.

The Blue Cross case was handled by Health Care Bureau Albany Section Chief Troy Oechsner and Assistant Attorney General John Powell. Consumers may contact the Health Care Bureau's toll-free hotline at (800) 771-7755 (option #3 on the automated voice menu).


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