Aetna Fined $500,000 for Denying Emergency Room Claims in CA

August 26, 2020 - Aetna has been fined by California’s Department of Managed Health Care for denying emergency room claims against the state’s standards.

“The plan’s failure to follow California law for reimbursing emergency room claims is unacceptable,” said Acting DMHC Director Mary Watanabe. “This has resulted in Aetna wrongfully denying emergency room claims. Aetna must follow the state’s health care laws to ensure enrollees have access to the care they need.”

According to California law, health plans are required to cover emergency services. The only exceptions are if the health plan can prove that the emergency procedure never took place or if the member did not require emergency care services and “reasonably should have known” that their condition did not warrant an emergency room visit, the press release summarized.

“We will review the information when a claim comes in. If we think the situation was not urgent, we might ask you for more information and may send you a form to fill out,” the payer’s individual and family health insurance plans page says regarding emergency room coverage.

However, in the state of California, Aetna failed to cover certain emergency services claims. In fact, after a review of Aetna’s emergency care services claim denials, the department concluded that 93 percent of the denied claims it sampled should not have been denied under California law.

Aetna’s emergency care services denial template for health maintenance organizations (HMOs) was not aligned with California’s standards.

The Department of Managed Health Care’s order that Aetna should no longer apply its national plan standards in California was not its first warning. The payer has already had to pay $135,000 in fines for denied emergency claims in 2015 and 2016.

In addition to these fines, the payer instituted training for its employees so that they would be better prepared to deal with emergency care services claims in the state.

Since this is not Aetna’s first time in court, the payer faces a fine of $500,000.

Coverage for emergency care services has been a challenge as payers find loopholes to escape covering these very costly procedures.

In 2018, two incidences particularly highlighted payer policies that lead to high out-of-pocket healthcare spending for patients by denying emergency claims.

It was revealed that Anthem Blue Cross Blue Shield of Georgia was retroactively denying emergency room payments, depending on a patient’s diagnosis.

That same year, BlueCross BlueShield of Texas came under fire for considering implementing a claims review policy that requires members to cover their bills out-of-pocket if a claim is considered a non-emergency retroactively.

Across the US, BCBS went to court for policies such as these, with mixed results.

Since then, policymakers in Texas, California, and other states have tried to clamp down on surprise billing, both for emergency care services and healthcare overall.

When Congress failed to take action on surprise billing in the 2019 year-end spending package, stakeholders called for change in 2020. And initially, lawmakers seemed to be aligned with stakeholders as three separate bills emerged from the House and Senate at the beginning of 2020.

But the issue has taken an unexpected turn in recent months as a result of the coronavirus pandemic.

For employers, the coronavirus pandemic only emphasized the immediate need for surprise billing legislation. In a letter published in early July 2020, business groups urged Congress to include surprise billing in the next coronavirus package.

However, hospitals are more wary about implementing change during the pandemic.

In response to a Department of Health and Human Services (HHS) report which revealed that there is still no comprehensive, national policy to suppress surprise billing, American Hospital Association (AHA) argued that implementing surprise billing policy now would only boost payers’ revenue as they narrow networks in reaction.

Officially, payers have waived many coronavirus-related testing and treatment costs, which should shield patients from surprise billing for coronavirus-related surprise bills.

However, California’s case against Aetna demonstrates that the reduction or elimination of coronavirus testing and treatment surprise billing and even the reduction of out-of-network emergency care spending due to the pandemic have not protected patients from surprise billing in other areas of healthcare, including the emergency room.