[Federal Register Volume 63, Number 234 (Monday, December 7, 1998)]
[Notices]
[Pages 67486-67489]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-32480]



[[Page 67486]]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Office of Inspector General and Health Care Financing Administration


Solicitation of Comments on the OIG/HCFA Special Advisory 
Bulletin on the Patient Anti-Dumping Statute

AGENCY: Office of Inspector General (OIG) and Health Care Financing 
Administration (HCFA), HHS.

ACTION: Notice of Proposed Special Advisory Bulletin.

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SUMMARY: This Federal Register notice seeks the input and comments of 
interested parties on a Special Advisory Bulletin being developed by 
the OIG and HCFA designed to address requirements of the patient anti-
dumping statute and the obligations of hospitals to screen all patients 
seeking emergency services and provide stabilizing medical treatment to 
enrollees of managed care plans if their condition warrants it. In 
developing this proposed issuance and soliciting public comment, it is 
our goal to provide clear and meaningful advice with regard to the 
application of the anti-dumping provisions, and ensure greater public 
awareness of the hospitals' obligations in providing emergency medical 
services to those individuals insured by managed care plans.

DATES: To assure consideration, comments must be delivered to the 
address provided below by no later than 5 p.m. on January 6, 1999.

ADDRESSES: Please mail or deliver your written comments and 
recommendations to the following address: Office of Inspector General, 
Department of Health and Human Services, Attention: OIG-33-SFA, Room 
5246, Cohen Building, 330 Independence Avenue, S.W., Washington, D.C. 
20201.
    We do not accept comments by facsimile (FAX) transmission. In 
commenting, please refer to file code OIG-33-SFA. Comments received 
timely will be available for public inspection as they are received, 
generally beginning approximately 3 weeks after publication of a 
document, in Room 5541 of the Office of Inspector General at 330 
Independence Avenue, S.W., Washington, D.C., on Monday through Friday 
of each week from 8:00 a.m. to 4:30 p.m.

FOR FURTHER INFORMATION CONTACT: Joel Schaer, Office of Counsel to the 
Inspector General, (202) 619-0089.

SUPPLEMENTARY INFORMATION: In an effort to identify and eliminate 
fraud, waste and abuse in the Department's health care programs, the 
OIG periodically develops and issues Special Fraud Alerts and, with the 
cooperation of HCFA, Advisory Bulletins to alert health care providers 
and program beneficiaries about potential problems. This proposed 
bulletin is being developed by the OIG and HCFA to address the 
principal requirements of the patient anti-dumping statute (section 
1867 of the Social Security Act) and to discuss how the requirements of 
that statutory provision apply to individuals insured by managed care 
plans that require ``prior authorization'' for emergency services. We 
have attempted to conform this proposed bulletin with policies set 
forth in the HCFA State Operations Manual on Provider Certification 
(Transmittal No. 2, May 1998) which provides guidelines and 
investigative procedures for reviewing the responsibilities of Medicare 
participating hospitals.
    Section 1867 of the Act imposes specific obligations on Medicare-
participating hospitals that offer emergency services with respect to 
individuals coming to the hospital and seeking treatment of possible 
emergency medical conditions. Specifically, the draft Special Advisory 
Bulletin proposes to address: (1) The obligations of these hospitals in 
providing screening to all patients seeking emergency services and 
stabilizing emergency treatment to individuals seeking such care; (2) 
the special concerns in the provision of emergency services to 
enrollees of managed care plans; (3) the rules governing Medicare and 
Medicaid managed care plans with respect to prior authorization 
requirements and payment for emergency services; and (4) what types of 
practices will serve to promote compliance by hospitals with the 
patient anti-dumping statute when managed care enrollees seek emergency 
services. We would appreciate receiving specific comments, 
recommendations and suggestions on the issues discussed in this 
proposed bulletin.
    Set forth below for comment is the proposed OIG/HCFA Special 
Advisory Bulletin addressing the patient dumping statute.

OBLIGATIONS OF HOSPITALS TO RENDER EMERGENCY CARE TO ENROLLEES OF 
MANAGED CARE PLANS

What Are the Obligations of Medicare-Participating Hospitals That 
Offer Emergency Services to Individuals Seeking Such Services?

     The anti-dumping statute (section 1867 of the Social 
Security Act; 42 U.S.C. 1395dd) sets forth the Federally-mandated 
responsibilities of Medicare-participating hospitals to individuals 
with potential emergency medical conditions.
     Under the anti-dumping statute, a hospital must provide to 
any person who comes seeking emergency services an appropriate medical 
screening examination sufficient to determine whether he or she has an 
emergency medical condition, as defined by statute. When appropriate, 
ancillary services routinely available at the hospital must be provided 
as part of the medical screening examination.
     If the person is determined to have an emergency medical 
condition, the hospital is required to stabilize the medical condition 
of the individual, within the staff and facilities available at the 
hospital, prior to discharge or transfer.
     If the patient's medical condition cannot be stabilized 
before a transfer requested by the patient (or determined to be in the 
patient's best interest by the responsible medical personnel), the 
hospital is required to follow very specific statutory requirements 
designed to facilitate a safe transfer to another facility.
     A hospital may not delay the provision of an appropriate 
medical screening examination or further medical examination and 
stabilizing medical treatment in order to inquire about the 
individual's method of payment or insurance status.
     Regulations implementing these statutory obligations are 
found at 42 CFR part 489. The anti-dumping statute is enforced jointly 
by the Health Care Financing Administration (HCFA) and the Office of 
Inspector General (OIG) of the U.S. Department of Health and Human 
Services (HHS).
     Sanctions that may be imposed by HHS for violations of the 
anti-dumping statute include the termination of the hospital's provider 
agreement, and the imposition of civil money penalties against both the 
hospital and the physician responsible for examination, treatment, or 
transfer of an individual. In addition, the anti-dumping statute 
provides for the exclusion of such physician if the violation is gross 
and flagrant or repeated.

Why Is There a Special Concern About the Provision of Emergency 
Services to Enrollees of Managed Care Plans?

    Many managed care plans require their members to seek prior 
authorization for some medical services, including emergency services. 
As noted above, the anti-dumping statute prohibits a hospital's inquiry 
about a patient's method of payment or insurance status, or use of such

[[Page 67487]]

information, from delaying a screening examination or stabilizing 
medical treatment. It has come to our attention that some hospitals 
routinely seek prior authorization from a patient's primary care 
physician or from the plan when a managed care patient requests 
emergency services, since the failure to obtain authorization may 
result in the plan refusing to pay for the emergency services. In such 
circumstances, the patient may be personally liable for the costs.
    A reasonable argument can be made that patients (other than those 
arriving in dire condition) should be informed when they request 
emergency services of their potential financial liability for services. 
Some would go further and argue that the hospital itself should seek 
prior approval from the patient's health plan for emergency services to 
preserve the patient's right to seek coverage for such services. 
However, our concern is that, such an inquiry may improperly or unduly 
influence patients to leave the hospital without receiving an 
appropriate medical screening examination. This result would be 
inconsistent with the goals of the anti-dumping statute and could leave 
the hospital exposed to liability under the statute.
    Investigations of allegations of the anti-dumping statute 
violations across the country have persuaded the OIG and HCFA that 
managed care patients may be at risk of being discharged or transferred 
without receiving a medical screening examination, largely because of 
the problems inherent in seeking ``prior authorization.'' Hospitals 
sometimes are caught between the legal obligations imposed under the 
anti-dumping statute and the terms of agreements which they have with 
managed care plans. For example, some Medicaid managed care 
contractors, as a condition of contracting with hospitals to provide 
services to their enrollees, have attempted to require such hospitals 
to obtain prior authorization from the plan before screening or 
treating an enrollee in order to be eligible for reimbursement for 
services provided.
    The OIG's and HCFA's view of the legal requirements of the anti-
dumping statute in this situation is as follows. Notwithstanding the 
terms of any managed care agreements between plans and hospitals, the 
anti-dumping statute continues to govern the obligations of hospitals 
to screen and provide stabilizing medical treatment to individuals who 
come to the hospital seeking emergency services regardless of the 
individual's ability to pay. While managed care plans have a financial 
interest in controlling the kinds of services for which they will pay, 
and while they may have a legitimate interest in deterring their 
enrollees from over-utilizing emergency services, no contract between a 
hospital and a managed care plan can excuse the hospital from its anti-
dumping statute obligations. Once a managed care enrollee comes to 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.1
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    \1\ Separate and apart from the anti-dumping statute, in 
accordance with sections 1857(g), 1876(i)(6), 1903(m)(5) and 1932(e) 
of the Social Security Act, the OIG (acting on behalf of the 
Secretary) has the authority to impose intermediate sanctions 
against Medicare and Medicaid contracting managed care plans that 
fail to provide medically necessary services, including emergency 
services, to enrollees where the failure adversely affects (or has a 
substantial likelihood of adversely affecting) the enrollee. 
Medicare and Medicaid managed care plans that fail to comply with 
the above provision are subject to civil money penalties of up to 
$25,000 for each denial of medically necessary services.
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What About Arrangements Between Hospitals and Managed Care Plans 
for ``Dual Staffing'' of Emergency Departments?

    Some managed care organizations (MCOs) and hospitals have entered 
into, or are considering entering into, arrangements whereby the 
hospital permits the 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 patients who request emergency services. This kind of arrangement 
is known as ``dual staffing.'' In a dual staffing setting, two separate 
groups of physicians would be providing emergency care, perhaps using 
different policies and protocols, performing different procedures, 
using different referral practices and drug formularies, relying on 
different on-call physicians, and having different credentials.
    It is believed by some that dual staffing in emergency departments 
can facilitate the expeditious provision of services to MCO patients by 
physicians and other practitioners in their own health plans, 
particularly when patients present in emergency departments in stable 
condition. However, some hospitals and emergency physicians have raised 
questions about how the requirements of the patient anti-dumping 
statute may affect dual staffing arrangements, and we have been 
considering how to respond. As interpreted by this Department, the 
statute requires that a hospital and its physicians provide medically 
adequate screening and stabilization, supported by professionally 
recognized standards of care, to individuals seeking emergency 
services. Theoretically, one could construct 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 received equal access to screening and 
stabilizing medical treatment. This arrangement would seem to satisfy 
the requirements of the anti-dumping statute.
    Absent such equivalency, implementation of dual staffing raises 
some concerns under the patient anti-dumping statute. For example, what 
if either the MCO or non-MCO track is understaffed or simply 
overcrowded, and a patient in a particular track is subjected to a 
significant delay in screening and stabilizing treatment, even though a 
physician in the alternative track was available to see the individual? 
What if the protocols, referral patterns, use of specialists and 
patient guidelines are substantially different between the MCO and non-
MCO tracks such that two different standards of care are provided in 
performing screenings or stabilizing treatment? How can a hospital be 
sure that all patients requesting emergency services receive, as 
required by statute, an appropriate screening examination within the 
full capabilities of the hospital, and necessary stabilizing treatment 
within the capability of the staff and facilities of the hospital, if 
the MCO track operates independently from the hospital's own emergency 
care system? These are difficult questions, and we have not yet 
determined how to treat issues related to dual staffing under the 
patient anti-dumping act. As a result, we are specifically soliciting 
comments and suggestions from the public on this issue, and we expect 
to offer some specific guidance in this area in the final version of 
this Special Advisory Bulletin.

What are the Rules Governing Medicare and Medicaid Managed Care 
Plans with Respect to Prior Authorization Requirements and Payment 
for Emergency Services?

    There are special requirements for managed care plans that contract 
with Medicare and Medicaid to provide services to beneficiaries of 
those programs. Congress has specified that Medicare and Medicaid 
managed care plans may not require prior authorization for emergency 
services, and must pay for such services, without

[[Page 67488]]

regard to whether the hospital providing such services has a 
contractual relationship with the plan. Under statutory amendments 
recently enacted in the Balanced Budget Act (BBA) of 1997 (Pub. L. 105-
33),2 Medicare and Medicaid managed care plans are 
prohibited from requiring prior authorization for emergency services, 
including those that ``are needed to evaluate or stabilize an emergency 
medical condition.'' Moreover, Medicare and Medicaid managed care plans 
are required to pay for emergency services provided to their enrollees. 
The obligation to pay for emergency services is based on a ``prudent 
layperson'' standard, which means that the need for emergency services 
should be determined from a reasonable patient's perspective at the 
time of presentation of the symptoms.3
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    \2\ See section 4001 of the BBA, which created section 1852(d) 
of the Act. Section 1852(d) covers emergency services and prior 
authorization for Medicare enrollees. Also, section 4704(a) of the 
BBA created section 1932(b) of the Act, which contains Medicaid 
provisions covering emergency services and prior authorization.
    \3\ With respect to Medicare, prior authorization requirements 
were already explicitly prohibited by regulations before the passage 
of the BBA for emergency services provided outside an HMO or 
competitive medical plan (42 CFR 417.414(c)(1)), and by implication 
for services provided within such a plan. Similarly, while the BBA 
clarified and codified the ``prudent layperson'' standard, a 
variation of this standard has always been part of the Medicare 
policy for managed care plans. However, all of these requirements 
are new to Medicaid.
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What Practices Will Promote Compliance with the Anti-Dumping 
Statute by Hospitals When Managed Care Enrollees Seek Emergency 
Services?

    The OIG and HCFA are concerned that discussion by hospital 
personnel with a patient regarding the possible need for prior 
authorization, or his or her potential financial liability for medical 
services provided by a hospital that offers emergency services, could 
influence patients to leave the emergency department without receiving 
an appropriate medical screening examination. Without also informing 
the patient of his or her rights to a medical screening examination and 
to stabilizing medical treatment if the patient's condition warrants 
it, a discussion about insurance, ability to pay and seeking prior 
authorization may impede a hospital's compliance with its obligation 
under the anti-dumping statute. Discussions between a hospital staff 
member and a patient regarding potential prior authorization 
requirements and their financial consequences that have the effect of 
delaying a medical screening are violations of the anti-dumping 
statute. Moreover, the OIG and HCFA believe that in the absence of an 
initial screening, the decision of a managed care plan regarding the 
need for treatment is likely to be ill-informed. Patients are entitled 
to receive a medical screening examination and stabilizing medical 
treatment under the anti-dumping statute regardless of a hospital's 
contract with a health plan that requires prior authorization. 
Accordingly, the OIG and HCFA suggest the following practices to 
minimize the likelihood that a hospital will violate the statute:
     No Prior Authorization Before Screening or Stabilization. 
It is not appropriate for a hospital to request or a health plan to 
require prior authorization before the patient has received a medical 
screening examination to determine the presence or absence of an 
emergency medical condition or before the patient's emergency medical 
condition is stabilized.4
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    \4\ Of course, this would not preclude an emergency physician 
from contacting the patient's physician at any time to seek advice 
regarding the patient's medical history and needs that may be 
relevant to the medical screening and treatment of the patient. 
Further, a patient who has not already contacted his or her health 
plan is free to do so at any time during his or her wait for 
emergency services.
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     No Financial Responsibility or Advanced Beneficiary 
Notification Forms. Prior to performing an appropriate medical 
screening examination, the hospital should not ask a patient to 
complete a financial responsibility form or an advanced beneficiary 
notification form, and should not ask the patient to provide a co-
payment for any services rendered. Such a practice could deter the 
patient from remaining at the hospital to receive care to which he or 
she is entitled and which the hospital is obligated to provide 
regardless of ability to pay, and could cause unnecessary delay.
     Qualified Medical Personnel Must Perform Medical Screening 
Examination. A hospital should ensure that either a physician or other 
qualified medical personnel (i.e., hospital staff approved by the 
hospital's governing body to perform certain medical functions) 
provides an appropriate medical screening examination to all 
individuals seeking emergency services. Depending upon the individual's 
presenting symptoms, this screening examination may range from a 
relatively simple examination to a complex one which requires 
substantial use of ancillary services available at the hospital and on-
call physicians.
     When a Patient Inquires About Financial Liability for 
Emergency Services. If a patient inquires about his or her obligation 
to pay for emergency services, such an inquiry should be answered by a 
staff member who has been well trained to provide information regarding 
potential financial liability. This staff member also should be 
knowledgeable about the hospital's anti-dumping statute obligations and 
must clearly inform the patient that, notwithstanding the patient's 
ability to pay, the hospital stands ready and willing to provide a 
medical screening examination and stabilizing treatment, if necessary. 
Hospital staff should encourage any patient who believes that he or she 
may have an emergency medical condition to remain for the medical 
screening examination and to defer further discussion of financial 
responsibility issues until after the medical screening has been 
performed. If the patient chooses to withdraw his or her request for 
examination or treatment, a staff member with appropriate medical 
training must discuss the medical issues related to a ``voluntary 
withdrawal.''
     Voluntary Withdrawal. If an individual chooses to withdraw 
his or her request for examination or treatment at the presenting 
hospital, a hospital must perform the following: (1) offer the 
individual further medical examination and treatment within the staff 
and facilities available at the hospital as may be required to identify 
and stabilize an emergency medical condition; (2) inform the individual 
of the risks and benefits of such examination and treatment, and of the 
risks and benefits of withdrawal prior to receiving such examination 
and treatment; and (3) take all reasonable steps to secure the 
individual's written informed consent to refuse such examination and 
treatment. The medical record should contain a description of the 
examination, treatment, or both, if applicable, that was refused.
    In the event that an individual, e.g., nurse, doctor, other 
emergency room staff member or patient, believes that a hospital may 
have violated the anti-dumping statute, that individual should report 
the alleged violation to the HCFA office in the region in which the 
hospital is located.


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    Dated: November 24, 1998.
June Gibbs Brown,
Inspector General.
    Dated: November 24, 1998.
Nancy-Ann Min DeParle,
Administrator, Health Care Financing Administration.
[FR Doc. 98-32480 Filed 12-4-98; 8:45 am]
BILLING CODE 4150-04-P