States Strive to Keep Medicaid Patients Out of the Emergency Department

Nearly half the states use higher copayments to dissuade Medicaid recipients from unnecessary visits to emergency rooms, where care is more costly.

These states require patients to make the payments, which are as high as $30 per visit in Oklahoma, when it is later determined that they did not experience a true medical emergency.

But at least one multistate study has found that charging higher copayments does not reduce emergency department (ED) use by Medicaid recipients. One reason might be that copays are hard to enforce, since EDs are legally obligated to examine anyone who walks through the doors, whether or not they can pay.

ED doctors and others in health policy also criticize copays as potentially dangerous, since they may lead people to think twice about seeking emergency care when they really need it.

Washington state and some Medicaid managed care plans around the country are trying a different approach. Instead of using financial disincentives, they are trying to keep frequent users out of the emergency department (practitioners prefer the name “emergency department” to “emergency room”) by enrolling them in primary care practices, scheduling appointments for them and, in some cases, making sure they get to the doctor’s office on time. The hope is that giving people comprehensive health care will make many ED trips unnecessary.

Reliable data are still sparse, but the early signs are encouraging: Washington state reported that a year after implementing its program, emergency room visits by Medicaid beneficiaries had declined by nearly 10 percent. Among frequent ED users, the drop was slightly greater.

Appropriate Use

Health care policy experts say it’s important to put ED costs in proper perspective. Emergency room spending accounted for only 4 percent of the $1.3 trillion America spent on health care (for the civilian, non-institutionalized population) in 2012, the most recent year for which statistics are available. And use of the ED by Medicaid enrollees accounted for just 4 percent of total Medicaid spending in 2011, according to the Medicaid and CHIP Payment and Access Commission (MACPAC).

Furthermore, most of the Medicaid patients who go to the ED belong there. According to the National Hospital Ambulatory Medical Care Survey released in November, only 8 percent of the 136 million ED visits in 2011 were later deemed to have been for “non-urgent” conditions or injuries that could have been handled in other, less-expensive settings. The rate among Medicaid recipients was only a bit higher, 9.8 percent.

“Medicaid beneficiaries, like everyone else, don’t go to the ER for a good time,” said Joan Alker, executive director of Georgetown University’s Center of Children and Families.

But because emergency department care is so much more expensive than office-based care, and because Medicaid recipients use EDs more often than those with private insurance, states have seized on Medicaid enrollees’ ED use as a way to cut costs.

The Network for Excellence in Health Innovation (formerly the New England Healthcare Institute but still known as NEHI) found that in 2007, the average office-based visit cost $187, while a trip to the emergency room cost $767.  What accounts for the difference is that emergency rooms are staffed 24-hours a day every day of the year, and are equipped with the most expensive technology to handle all manner of medical emergencies.

Medicaid patients use the emergency room at twice the rate of those with private insurance, according to the Centers for Medicare & Medicaid Services (CMS). One reason is that Medicaid recipients are generally unhealthier than the general population. Another is that they have a harder time getting primary care, largely because doctors get paid less for treating Medicaid patients. Many Medicaid patients also have hourly jobs that make it difficult to get to a doctor’s office during working hours, or they don’t have transportation to get there.

The Trouble with Copays

States set Medicaid copayment amounts. Most do not charge copays for primary care visits and charge minimal amounts for hospitalizations. Some states maintain that higher copayments for unnecessary ED visits are the best way to reduce them.

Republican Utah Gov. Gary Herbert, for example, has proposed a public-private expansion of Medicaid in his state that would allow beneficiaries to pay a lower premium, but would require them to pay a $50 fee for visiting an emergency department for a condition that is later determined to be “non-emergent.”

“The concept was to promote individual responsibility by reducing inappropriate use of the emergency room,” said Kolbi Young, a spokeswoman for the Utah Department of Health.

But many health policymakers, as well as the American College of Emergency Physicians (ACEP), believe that trying to dissuade people from going to the emergency room when they feel they have a medical emergency is poor policy.

“I think people need to have skin in the game and Medicaid patients are the ones with the least skin in the game with the fewest copays,” said Zachary F. Meisel, a Philadelphia ED doctor and co-director of the Center for Emergency Care Policy Research at the University of Pennsylvania.

“But it’s unclear that the emergency (room) is the place to put more skin in the game, because the last thing you want to do is have someone who is sick and vulnerable not getting care for a time sensitive condition.”

A 2013 study in the Journal of the American Medical Association found that of the 6.3 percent of emergency room visits later determined to have been unnecessary, 89 percent of them were cases in which the patient had exactly the same complaint—chest pains, for example—as somebody who truly needed to be in the ED. Without an emergency department examination, it was impossible to determine who really needed to be there and who didn’t.

“A 64-year old person could have chest pains and end up with a diagnoses of GERD (severe heartburn), which if you looked at the diagnosis you’d say, “Why are you in an ED?” said Maria Raven, one of the study’s authors and an assistant professor at the University of California, San Francisco. “But no one would tell a 64-year old with chest pains that he shouldn’t go to the emergency room.”

Critics say a copayment, however small, could dissuade someone with little means from seeking emergency care. “It will inevitably lead to people who should have gone to the ER dying instead,” said Meisel.

Washington’s Approach

Washington backed into its innovative approach. In 2011, the Washington State Health Care Authority announced that the state’s Medicaid program would pay for no more than three “nonemergency” visits to the emergency room each year for each beneficiary. It also classified 700 diagnoses as “non-emergent conditions,” including chest pain, abdominal pain, miscarriage and breathing problems.

The authority expected the policy to save $35 million a year. But ED doctors were aghast, and the Washington chapter of the American College of Emergency Physicians (ACEP) filed a lawsuit to block the plan.

“This list of non-emergent diagnoses puts patients in danger and unfairly targets the poor and those in most need of care,” Stephen Anderson, an ED doctor who heads the Washington chapter of ACEP said at the time. The ED doctors also argued that the state’s policy violated the federal Emergency Medical Treatment and Active Labor Act, which requires EDs to provide medical screening to all comers regardless of their ability to pay.

The doctors prevailed in court, paving the way for negotiations among the state, ED doctors and hospitals. Those sessions ultimately led to Washington state launching the most comprehensive effort to reduce unnecessary emergency room visits among Medicaid beneficiaries.

The Washington initiative implicitly recognizes another category of visits to the ED: the avoidable. Many of the people in this group lack primary care. As a result, manageable conditions such as asthma and diabetes go unaddressed, which can cause a medical crisis that does require emergency care. (The NEHI report refers to its 2007 finding that avoidable and unnecessary trips to the ED cost up to $38 billion annually.)

To address this shortcoming, Washington created an information-sharing network among EDs to identify Medicaid beneficiaries who are frequent users of the emergency room (other frequent users are identified through Medicaid managed care plans). Once patients are identified, hospital personnel make primary care appointments for them, with the goal of having them seen within 96 hours of their emergency room visit.

The state set up a 24-hour hotline staffed by nurses who can advise people about whether they are having a true medical emergency. The program also includes a plan for educating patients in understanding what constitutes a true medical emergency. Generally speaking, common illnesses, such as colds, the flu, earaches, sore throats, migraines, low-grade fevers and limited rashes do not require trips to the ED. Neither do minor injuries, such as sprains, back pain, small cuts and burns, minor broken bones, or minor eye injuries.

In the first year of the program, emergency department visits by Medicaid enrollees declined by 9.9 percent and the rate of visits by frequent users (those with more than four visits in a year) fell by 10.7 percent. The savings for 2013 totaled $33.6 million.

MaryAnne Lindeblad, Washington state’s Medicaid director, said that ultimately, the state came up with the right solution. “Before you take a punitive approach, you’ve got to give the member an alternative in terms of connecting them with primary care,” she said.

Managed Care Plans Perk Up

Despite Washington’s success, no other state appears to have followed its lead. In fact, Arizona and California may seek permission to raise copays for non-emergent ED visits above federal limits.

But if states are not enacting measures like Washington’s, some Medicaid managed care plans and clinics are.

The 70,000-member Home State Health Plan in the St. Louis area uses claims data to identify frequent ED users and then arranges primary care appointments for them, either by telephone or in-person visits with patients.  

It also uses a hotline staffed by nurses who can help determine if the patient needs to go to the ED or elsewhere. The nurses can make primary care appointments for the patients while they are still on the line. Bernard Shore, medical director of Home State, said that in its first year, the plan reduced emergency department visits by 9.5 percent.

The Oak Street Health clinics in Chicago, which serve mostly Medicaid and Medicare beneficiaries, employ a similar approach. The clinics keep physician caseloads relatively low to enhance the relationships between doctor and patients. They operate an around-the-clock hotline that helps patients make next-day appointments. They also provide transportation for those in need.

As a result, Oak Street has cut total hospital admissions among its patients by up to 50 percent, which reflects a drop in ED use since more than three-quarters of unscheduled hospitalizations come through the emergency department, according to ACEP.

Another example is an initiative by the Milwaukee Health Care Partnership, an organization comprising local and state government, medical providers and hospitals. Here too, EDs identify Medicaid beneficiaries and the uninsured who are frequent users, share the information with each other, and make primary care appointments for those patients. The initiative seeks to make personal contact with those identified to make sure they make their primary care appointments and also to educate them about proper use of the ED. Finally, the sharing information enables primary care providers to learn when their patients have visited any of the emergency rooms in the area.

Betty Ragalie, director of emergency department care coordination, said the strategy resulted in a 44 percent reduction in the number of visits to the ED among those who had been connected to primary care and made a first appointment.

James Adams, chairman of the Department of Emergency Medicine at Northwestern University Feinberg School of Medicine, is impressed by efforts like these—but he is quick to put them in historical perspective. He notes that emergency medicine has been a medical specialty since the early 1960s, and even then, there were calls to reduce the use of EDs.

“As a society we have complained about high utilization for the last 55 years, and those complaints have never had any impact,” Adams said. “If you track back, you’ll see this over and over. We do the same song and dance and never get to the solutions.”