Health Insurer: Observations In EmCare Study Are Real

Dallas-based EmCare, a national firm that staffs hospital emergency rooms with physicians, found itself on the hot seat this week after a Yale University study blamed the company for fueling expensive, out-of-network billing at its ERs.

EmCare is a division of Greenwood Village, Colo.-based Envision Healthcare, a national clinical network solutions management firm that logged $3.7 billion in revenue last year. EmCare currently operates 142 locations in Texas, Dallas Morning News data shows. An Envision spokesperson told D CEO Healthcare that EmCare employs 1,350, including 1,200 clinical workers and 150 who provide business support.

The Yale study reported that 15 percent of hospitals, many affiliated with EmCare, accounted for more than 80 percent of all out-of-network billing. The study also showed that out of 194 hospitals affiliated with EmCare, the average out-of-network billing rate was 62 percent, which Yale said was “far higher than the national average.”

A statement from EmCare’s parent said the Yale study is out of date and flawed.

A D CEO Healthcare source who previously worked as a physician recruiter in EmCare’s corporate office said the company’s practices could be explained by “the nature of the healthcare game.” The source recalled EmCare-employed hospitals utilizing the Emergency Medical Treatment and Active Labor Act, which requires almost all hospitals to provide treatment to patients needing emergency medical services regardless of their insurance status.

“It’s such a cash-rich business,” the source said. “There was a huge health group in Michigan I was chasing, and that’s when I noticed everyone—including EmCare—is just playing by the rules of the game that exist. Because of the act, if patients need emergency services and have some level of insurance, the insurer will have to pay the cost, so EmCare [is able to] bill out-of-network.”

In addition to hospitals, EmCare works with insurers like Blue Cross Blue Shield Texas, ideally to keep patients that are treated by EmCared-affiliated physicians in-network. In February, EmCare publicly announced its aim to “move the majority of our providers in-network … working alongside our professional partners to support reforms to address out-of-network billing concerns, including aligning providers and payors.”

BCBSTX told D CEO Healthcare that all the multiple emergency physician groups that EmCare manages and negotiates for are in-network for its products. Shara McClure, divisional senior vice president of BCBSTX healthcare delivery, said, “The contracts were designed to protect members from excessive costs at a vulnerable time. However, we acknowledge this may not always be possible, due to increasing demands and cost escalation.”

McClure said BCBSTX members compelled the company to contract with EmCare because “the emergency department is the most expensive place to access care, and that’s because both hospital and physician costs are steep and continue to escalate. BCBSTX works hard to keep all physicians in our network so members are not surprised with unexpected healthcare expenses.” Asked to comment about the Yale study, McClure said “the observations in the study apply to Texas and are real. It’s important that legislators, regulators, employers, members, and patients understand the causes and effects of escalated costs, so we can work together to solve for higher quality, more affordable care.”

While BCBSTX is still contracting with EmCare in an effort to increase its number of in-network members, other North Texas-based healthcare organizations have parted ways with the outsourcing firm.

The Parkland System, which worked with EmCare from 2012 to 2015, said through a spokesperson that it contracted with the firm when an “increased demand for doctors due to the volume of patients in our emergency department” led it to outsource. However, Parkland said, the work since has “since been turned over to our traditional medical partners, UT Southwestern … once it was determined by the medical school that they had the capacity to meet the needs.”

Asked about the Yale study, a Christus Health spokesperson told D CEO Healthcare, “We are reviewing to further evaluate the issues.” The spokesperson confirmed that Christus had contracted with EmCare, saying “different Christus hospitals have contracted at different times with EmCare,” but declined to disclose the specifics “without input from our providers.”

Medical City Healthcare, whose subsidiaries Medical City Frisco and Medical City Arlington have appeared on EmCare job listings, told D CEO Healthcare it is not currently contracting with EmCare. “Our current contracted ER group is in-network with all the major insurance payers,” a Medical City spokesperson said. “We are sensitive to additional bills that patients may receive from affiliated physicians, and encourage them to participate in the same insurance contracts in which our hospitals participate.”

Baylor Scott & White Health, which worked most recently with EmCare, said in a statement: “Effective January 1, 2016, Baylor Scott & White Health concluded its contract with EmCare in an effort to have a more strategic clinical relationship with the physicians serving in our emergency rooms.”

Jen Head, a spokesperson for Envision, said the company could not confirm EmCare’s current Texas clients. In a statement, Envision said the focus and methodology of the Yale study is “fundamentally flawed and dated …though we agree [with] the implied recommendation to advanced a shared goal to re-engineer the current system in a positive way.”

“The study appropriately identifies out-of-network reimbursement as a source of dissatisfaction for all payors, providers, and patients in our current healthcare system,” the statement continued. “It is important to note that out-of-network is not an issue for any individual company; it is a structural issue impacting the healthcare industry.”

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