On November 10, 1999, the Office of Inspector General (the "OIG") and the Health Care Financing Administration ("HCFA"), both within the Department of Health and Human Services ("HHS"), issued a "Special Advisory Bulletin on the Patient Anti-Dumping Statute" (the "Special Advisory Bulletin"). The Special Advisory Bulletin is designed to address the application to managed care enrollees of the screening and stabilization requirements of the federal patient anti-dumping statute, the "Emergency Medical Treatment and Active Labor Act" or "EMTALA" (Social Security Act § 1867; 42 U.S.C. § 1395dd) (the "Anti-Dumping Statute"). Issuance of the Special Advisory Bulletin followed the agencies’ December 7, 1998 publication and solicitation of comments on a draft version of the document. Reed Smith reported on the draft Special Advisory Bulletin in its February 8, 1999 Client Memorandum entitled "Anti-Dumping Statute (EMTALA) Update."

The text of the Special Advisory Bulletin, entitled "Obligations of Hospitals to Render Emergency Care to Enrollees of Managed Care Plans," can be found either at 64 Federal Register 61353 (beginning at page 61356) or on the Internet at http://www.dhhs.gov/progorg/oig/frdalrt/index.htm#Special Advisory Bulletin.

Originally enacted as part of the Consolidated Omnibus Budget Reconciliation Act of 1985 and amended thereafter, the Anti-Dumping Statute imposes emergency care requirements on hospitals that participate in the Medicare program. Specifically, a hospital that operates an emergency department must provide an appropriate medical screening examination to any individual who comes to the emergency department seeking treatment. If the screening examination reveals that an emergency medical condition exists (including where the patient is in active labor), the hospital must either provide for further examination and treatment of the patient in order to stabilize the emergency condition or it must make an appropriate transfer (with certain required certifications) of the patient to another facility, unless the treatment or transfer is refused.

A hospital may not transfer a patient unless the patient (or a responsible party) requests the transfer or a physician certifies that the medical benefits expected from treatment at the receiving facility outweigh the increased risks to the individual from the transfer. In all cases, a transfer must be considered "appropriate," meaning that the hospital’s transfer of the patient satisfies four primary criteria. The transferring facility must (a) provide medical treatment within its capacity that minimizes the risks to the patient’s (and any unborn child’s) health, (b) send all pertinent medical records available at the time of transfer to the receiving facility, (c) effect the transfer through qualified persons and transportation equipment, and (d) obtain the prior consent of the receiving hospital.

As a general matter, the law prohibits a hospital from delaying the provision of a screening examination or stabilizing treatment in order to inquire about a patient’s method of payment or insurance status. The Anti-Dumping Statute also mandates that hospitals post conspicuous signs specifying patients’ rights to examination and treatment for emergency conditions and that hospitals report to HCFA or the state survey agent any instance in which they believe they have received a patient in violation of the law.

Hospitals and physicians that violate the Anti-Dumping Statute’s requirements can be subjected to a number of different penalties, including termination of the hospital’s Medicare provider agreement or exclusion of the physician from participation in the Medicare and state health care programs, assessment of civil monetary penalties, and exposure of the hospital to civil suit by any patient who suffers personal harm as a direct result of a violation of the law.

In developing the Special Advisory Bulletin, it was the stated goal of HCFA and the OIG (together, the "Agencies") to provide "clear and meaningful" advice with regard to application of the Anti-Dumping Statute’s provisions and to ensure greater public awareness of hospitals’ obligations in providing emergency services to managed care plan enrollees, including, specifically, those whose plans require "prior authorization" for such emergency services.

Except for the addition of a third section discussing so-called "dual staffing" arrangements, the "final" Special Advisory Bulletin remains virtually unchanged from the December 1998 draft. It now addresses the following five main topics, the last four of which are discussed in further detail below:

In their introductory comments, the Agencies note that the Special Advisory Bulletin was intended to be consistent with policies set forth in HCFA’s State Operations Manual on Provider Certification (Transmittal No. 2, May 1998) (the "SOM"), which provides guidelines and investigative procedures for reviewing the responsibilities of Medicare-participating hospitals.(fn1) Further, the Agencies note that the regulations at 42 C.F.R. part 422 (which implement Social Security Act § 1852(d)) govern Medicare+Choice organizations’ obligations to pay for emergency services without regard to prior authorization or the treating hospital’s relationship with the plan.

A. Special Concerns With Respect To Managed Care Enrollees

The Agencies state in the Special Advisory Bulletin their understanding that some hospitals routinely seek prior authorization from a patient’s primary care physician or from the plan when a managed care enrollee requests emergency services, because the failure to do so may result in the plan’s refusal to pay for the emergency services and the patient’s subsequent personal liability therefor. The Agencies express concern, however, that "such an inquiry may improperly or unduly influence patients to leave the hospital without receiving an appropriate medical screening examination."

Although they explicitly acknowledge that hospitals are often caught between their legal obligations under the Anti-Dumping Statute and the terms of their agreements with managed care plans, the Agencies state their view that, notwithstanding the terms of such agreements, the Anti-Dumping Statute continues to govern the obligations of hospitals to screen and provide stabilizing treatment to patients who seek emergency care regardless of their ability to pay. Consequently, once a managed care enrollee presents at a hospital that offers emergency services, the hospital must provide the services required under the Anti-Dumping Statute "without regard for the patient’s insurance status or any prior authorization requirement of such insurance."

B. "Dual Staffing" Of Emergency Departments

So-called "dual staffing" arrangements exist where a hospital permits a managed care organization (an "MCO") to station its own physicians in the hospital’s emergency department, separate from the hospital’s own emergency physician staff, for the purpose of screening and treating MCO enrollees who request emergency services at the facility. The Agencies take the position that, regardless of any contractual arrangement with an MCO for staffing of its emergency department, a hospital remains responsible for compliance with all requirements of the Anti-Dumping Statute, including any relevant conduct that may occur in the MCO-staffed portion of its emergency department. Notwithstanding this view, however, the Agencies do not believe that the Anti-Dumping Statute makes dual staffing arrangements illegal per se.

According to the Special Advisory Bulletin, "if a hospital constructs two equally good emergency service ‘tracks,’ each adequately staffed and each with equally good access to all of the medical capabilities of the hospital, such that both MCO and non-MCO patients receive equal access to screening and stabilizing medical treatment, then such an arrangement would not seem to violate the requirements of the [A]nti-[D]umping [S]tatute." Consistent with this view, the Agencies enumerate the following practices that would constitute potential violations of the law:

The majority of comments received by the Agencies in response to the draft Special Advisory Bulletin expressed concern about the impact of dual staffing in hospital emergency departments. Many commenters feared that dual staffing would lead to the use of disparate standards in hospital emergency departments, including with respect to physician credentialing, drug formularies, equal access to ancillary services, consistency in specialty referrals, waiting times and quality assurance. The Agencies stated, however, that some greater risk of foreseeable harm would be required before they would prohibit, in advance and on a national level, arrangements that might increase access to health services. Consequently, the Agencies have taken the position described and have stated their expectation that practical experience will reveal whether or not dual staffing arrangements can be maintained without violating the Anti-Dumping Statute.

C. Medicare/Medicaid Managed Care Plan Prior Authorization Rules

The Special Advisory Bulletin highlights statutory amendments enacted under the Balanced Budget Act of 1997 (Pub. L. 105-33), which prohibit Medicare and Medicaid managed care plans from requiring prior authorization for emergency services and require them to pay for such services without regard to whether the hospital providing the services had a contractual relationship with the plan. The Agencies note further that the obligation to pay for emergency services is based on a "prudent layperson" standard, meaning that the need for emergency care should be determined from a reasonable patient’s perspective at the time of symptom presentation.

D. Practices Promoting Anti-Dumping Statute Compliance

In light of the Agencies’ continuing view that discussions between a hospital staff member and a patient regarding potential prior authorization requirements and their financial impact that have the effect of delaying a medical screening are violations of the Anti-Dumping Statute, the Agencies now suggest the following practices to minimize the likelihood of such violations:

1. No Prior Authorization Before Screening Or Stabilization. It is not appropriate for a hospital to seek, or to direct a patient to seek, authorization from a payor prior to providing a patient with an appropriate screening examination and any necessary stabilizing treatment. In response to comments on this prohibition, the Agencies have clarified that, once an appropriate screening has occurred and any needed stabilizing treatment is underway, an MCO may be contacted for payment authorization. Further, the Special Advisory Bulletin now states that the prohibition on seeking prior authorizations does not preclude an emergency physician from contacting the patient’s personal physician at any time to seek advice regarding the individual’s medical history and needs that may be relevant to the screening and treatment, provided that the consultation does not unnecessarily delay care.

2. No Financial Responsibility Or Advanced Beneficiary Notification Forms. A hospital would violate the Anti-Dumping Statute if it delays a screening examination or necessary stabilizing treatment in order to prepare an advance beneficiary notice ("ABN") and obtain a beneficiary signature. In the Agencies’ view, the best practice is for a hospital not to give financial responsibility forms or notices to an individual, or to otherwise obtain the individual’s agreement to pay for services, before the patient is stabilized. The Agencies have clarified that it normally will be permissible to ask for general registration information prior to performing a screening examination; however, the screening and any further treatment cannot be conditioned on the individual’s completion of a financial responsibility form or provision of a co-payment for services. Consistent with guidance in the SOM, hospitals may conduct reasonable registration processes (including asking what insurance a patient has), as long as this inquiry does not delay screening or treatment and does not unduly discourage patients from remaining for further evaluation.

3. Qualified Medical Personnel Must Perform Screening Examination. Hospitals must ensure that either a physician or other qualified medical personnel (i.e., authorized by the governing body to perform certain medical functions) provides an appropriate screening examination to all persons seeking emergency services. The screening examination may range from a simple examination to a complex one, involving the use of ancillary services.

4. When A Patient Inquires About Financial Liability For Emergency Services. Any such inquiry should be answered by a hospital staff member who has been well trained to provide information on potential financial liability and who is knowledgeable about the facility’s Anti-Dumping Statute obligations. The staff member must clearly inform the patient that, notwithstanding the patient’s ability to pay, the hospital is ready and willing to provide a screening examination and stabilizing treatment, if necessary. Any patient who believes he has an emergency medical condition should be encouraged to remain at the hospital for a screening examination and to defer further discussion of financial responsibility until after the examination is performed.

It should be noted that the Agencies refused to revise this section of the Special Advisory Bulletin in response to comments that the deferral of all discussions about patient financial responsibility for care might actually discourage certain patients from staying at the hospital to receive an examination or treatment. In the preamble to the Special Advisory Bulletin, the Agencies acknowledge, however, that the alternative approaches suggested by the commenters (e.g., allowing hospital staff to respond to patient inquiries with specific financial information and information about insurance coverage and follow-up treatment, so long as the hospital continues to offer, and encourages the patient to stay for, a screening examination and any necessary treatment) would be acceptable if they do not conflict with a minimum effort to defer discussions of financial liability issues until after the provision of screening any stabilizing treatment.

5. Voluntary Withdrawal. If a patient chooses to withdraw his request for examination or treatment at the presenting hospital, the facility must: (a) offer the patient further medical examination and treatment as may be required to identify and stabilize an emergency condition; (b) inform the patient of the risks and benefits of such examination and treatment and of withdrawal before receiving such care; and (c) take reasonable steps to obtain the patient’s written informed consent to refuse the care and document the refusal in the medical record.

In response to comments received by the Agencies, the Special Advisory Bulletin now also states that, if an individual leaves without notifying hospital personnel, the facility should: (x) document the fact that the person had been there; (y) document what time the hospital discovered that the patient had left; and (z) retain all triage notes and additional records, if any. Under these circumstances, the burden will rest with the hospital to show that it took additional steps to discourage the individual from leaving without evaluation. The Agencies note in the preamble to the Special Advisory Bulletin that a hospital could be found to violate the Anti-Dumping Statute if it "routinely keeps patients waiting so long that they leave without being seen, particularly if the hospital does not attempt to determine and document why individual patients are leaving, and reiterate to them that the hospital is prepared to provide a medical screening if they stay."

Please do not hesitate to contact any member of the Reed Smith Health Care Group with whom you work if you would like additional information or if you have questions.