Elimination of DMAS Level 3 Pend Program for Emergency Services

This issue requires State funding to be implemented. Budget Amendments have been introduced in the Senate by Senator Edd Houck, supported by Senators Ken Stolle, Russ Potts and Benny Lambert, and in the House by Delegate Phil Hamilton.

Background

In the 1990’s, DMAS established a “Pend” program whereby ALL claims for emergency department services (Levels 1 through 5, i.e. EM codes 99281 through 99285 which indicate the lowest to highest level of care for billing purposes) were individually reviewed to help assure clients were not abusing emergency department services and that services provided in the Emergency Department setting met the Prudent Layperson standard.

Services that met DMAS standards were paid at the current emergency services rates; however services that did not met those standards were downcoded by DMAS and paid at a flat, non-emergency rate, regardless of the level of service provided. This payment determination is then applied to the hospital bill.

In 2003, DMAS recognized that payment for the less urgent Level 1 and 2 physician services paid out at a slightly lower fee if these were automatically paid as emergency services vs. the non-emergency fee, which resulted in elimination of the Pend process for these visits.

DMAS, recognizing CMS guidance that Level 3, 4, and 5 physician services should be regarded as appropriate emergency services, agreed in April 2004 that Level 4 and 5 services would be automatically paid, resulting in administrative savings for both DMAS and physicians.

Key Facts:

• Medicaid clients do not overly “abuse” emergency services. A 2004 DMAS report to the Governor and General Assembly, House Document 33, Emergency Room Use by Virginia’s Fee-For-Service Medicaid Recipients, found the percentage of non-urgent emergency visits to be the same as published CDC statistics for all ED visits in the nation (2004).
  
• Level 3 claims are appropriately regarded as emergency services according to CMS Prudent Layperson guidance to State Medicaid Directors, April 2000, eliminating any justification for Virginia’s Pend program.
  
• Emergency physicians and hospitals are obligated by federal law to care for all patients, including Medicaid patients (EMTALA-42 U.S.C. § 1395dd). Unlike other physicians, emergency physicians cannot turn patients away based on their insurance status or ability to pay.
  
• No other health care provider is subjected to a review process to receive payment for services rendered. When Level 3 visits are pended and downcoded, emergency physicians are paid less as well as subjected to a costly chart review process.
  
• The Pend Program is unfair, costly and time-consuming to physicians’ and hospital billing departments. Pursuing a lengthy appeals process ultimately only serves to delay proper payment.
  
• Random audits would still be performed as is currently done for all claims for services. Emergency services providers found to be "up-coding" or engaging in activity violating program integrity would be subject to applicable penalties and fines, up to the maximum established by law.

For more information contact VACEP's Executive Director, Gwen Harry

or call 800.649.4911