Experience. Integrity. Advocacy.
Experience. Integrity. Advocacy.

Out-of-Network Payment in the Emergency Department and the End of the Payment Floor


Emergency physicians had the rug pulled out from under them recently through federal regulations that all but removed the option of a payment floor for out-of-network services provided in the emergency department. In a final rule issued jointly by the Centers for Medicare and Medicaid Services (CMS), the Department of Labor, and the Department of the Treasury to clarify the rules of Grandfathered Plans, Preexisting Condition Exclusions, Lifetime and Annual Limits, Rescissions, Dependent Coverage, Appeals, and Patient Protections Under the Affordable Care Act, no specific language was included to require a transparent minimum payment level for such services despite five years of negotiations between regulators and providers.

What was finalized is a guideline referred to as the “greatest of three,” which says out-of-network services provided in the emergency department should be reimbursed at the level of the greatest of the following: 1) the plan’s median in-network amount, 2) the amount the plan ordinarily pays for out-of-network services, and 3) the amount paid by Medicare. According to a recent Kaiser Health News article, physicians had wanted the payment standard for the first two “to be ‘usual and customary charges,’ adjusted for geographic variations, using a transparent, independent claims database such as that provided by the nonprofit group Fair Health.”

According to the American College of Emergency Physicians, releasing the final rule without specific language to define the first two means letting insurers pay “whatever amount they choose.”

“This new ruling will significantly benefit health insurance companies at the expense of physicians, because they know hospital emergency departments have a federal mandate to care for everyone, regardless of ability to pay,” said Dr. Jay Kaplan, president of ACEP, in a prepared statement.  “They will continue to shift costs onto patients and medical providers, as well as shrink the number of doctors available in plans. Instead of requiring health plans to pay fairly, this ruling guarantees that insurance companies can pay whatever they want for emergency care. If history tells us anything it’s that insurance companies prefer to pay as close to nothing as possible, while building their war chest for profits and litigation.”

Last week, ACEP, along with the Emergency Department Practice Management Association (EDPMA), sent a joint letter to Andy Slavitt, acting administrator of CMS, expressing their opposition to the final rule.

“ACEP and EDPMA believe that these Final Regulations, specifically the language pertaining to the so-called ‘greatest of three standards’ for health plan benefits for out-of-network emergency care services, represent the greatest threat to the financial viability of the emergency care safety net, and patient access to qualified emergency physicians and emergency department on-call specialists, that has EVER been proposed by federal regulators.

“To say that many of the emergency physicians represented by ACEP and EDPMA are angered by this language, and feel betrayed by the staff of CMS’ Center for Consumer Information and Insurance Oversight (CCIIO), would be a gross understatement. Our members and ACEP staff met in good faith with CCIIO staff on multiple occasions since the Interim Final Rules were first published in 2010.”

EDPMA and ACEP have created a joint task force to address out-of-network and Medicaid reimbursement. As well, ACEP’s Dr. Kaplan has said that his organization was considering legal action.

For more information, review

UPDATED: This article was updated on December 22, 2015, to clarify the principle of the “greatest of three” and the specific clarifying language physicians wanted that was not included in the finalized rule. The article previously stated the “greatest of three” language was not included in the final rule

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Charity Singleton Craig

Charity Singleton Craig is a freelance writer and editor who provides communications and marketing services for CIPROMS. She is responsible for creating, editing, and managing all content, design, and interaction on the company website and social media channels in order to promote CIPROMS as a thought leader in healthcare billing and management.

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