Matt Hartman
Professor Warner
Health Care Finance-Research Paper Outline

EMTALA and the Costs of Providing Care to the Uninsured
Background Information
In 1986, Congress enacted the Emergency Medical Treatment & Labor Act (EMTALA), included as a part of COBRA legislation, to ensure public access to emergency services regardless of ability to pay. Accordingly, hospitals are required to provide stabilizing treatment for patients with Emergency Medical Conditions. The Act imposes three primary requirements on hospitals that provide emergency medical services.
  1. The hospital must provide an appropriate medical screening exam to anyone coming to the Emergency Department (ED) seeking medical care;
  2. For anyone that comes to the hospital and the hospital determines that the individual has an emergency medical condition, the hospital must treat and stabilize the emergency medical condition, or the hospital must transfer the individual; and
  3. A hospital must not transfer an individual with an emergency medical condition that has not been stabilized unless several conditions are met that includes effecting an appropriate transfer.
In addition to restricting when a hospital may transfer patients, an important restriction EMTALA places on the receiving hospital, is that any one with “specialized capabilities or facilities”, namely burn-units, shock-trauma units, or neonatal intensive care units, must accept a patient in a transfer if it’s ability to treat the patient exceeds that of the transferring hospital, even due simply to overcrowding or lack of personnel. EMTALA kind of side-steps the issue of whether patients in transit via ambulance are considered to have “presented” to a hospital, although some of the language in the regulations indicates that a patient in transit by ambulance are not yet considered to have “come to an emergency department”.
EMTALA applies only to "participating hospitals" -- hospitals which have entered into "provider agreements" under which they will accept payment from the Department of Health and Human Services, Centers for Medicare and Medicaid Services (CMS) under the Medicare program for services provided to beneficiaries of that program. In practical terms, this means that it applies to virtually all hospitals in the U.S., with the exception of the Shriners' Hospital for Crippled Children and many military hospitals. Its provisions apply to all patients, and not just to Medicare patients. The Medicare death penalty is hands down the biggest enforcement provision.[[#_ftn1|[1]]]

EMTALA was the first time anti-dumping legislation was codified at the federal level. Although standard of care laws were already in existence at the state level, in some cases EMTALA goes above and beyond these with its affirmative obligation to provide treatment in certain instances. The number of annual violations and sanctions reported has been consistently very low. The Centers for Medicare and Medicaid Services and the Office of Inspector General of the U.S. Department of Health and Human Services have enforcement authority, and penalties include termination of the hospital or physician’s Medicare provider agreement, hospital fines of up to $50,000, and possible civil lawsuit for the hospital in violation. Most EMTALA provisions apply to hospitals only, meaning the physicians face no direct liability, however the physician (usually, in EMTALA situations, the emergency physician), may face indemnity or contribution claims, which certain courts have recognized, in the event that his or her decision makes the decision for which the hospital becomes legally liable.
EMTALA as an Unfunded Mandate? Who pays for Uncompensated Care?

The per capita health costs of the roughly 46 million uninsured in 2004 were $1,629 compared to $2,975 for the insured. Since EMTALA by definition makes hospital EDs responsible for providing treatment regardless of ability to pay, and provides for no specific funding mechanism, who is footing the bill for the majority of these costs, which go uncompensated? In short, everyone. Physicians lose a portion of their annual income to uncompensated care; those insured through their employer help to foot the bill as cost-shifting drives up their medical bills and insurance premiums; and taxpayers more broadly pay a portion of the bill as publicly funded hospitals levy greater taxes to offset uncompensated charity care. This isn’t to say that the cost burden on the uninsured isn’t significant as well. Full-time uninsured individuals who lack health insurance for the entire year pay for 35% of the cost of care out-of-pocket. Part-time uninsured individuals pay for roughly 25% of their care out-of-pocket, while the figure for insured individuals hovers around 20% annually.[[#_ftn2|[2]]] Nearly 85% of the cost of uncompensated care is funded through federal, state, and local government, mostly through the form of Medicaid disproportionate share hospital (DSH) payments. However, since physicians’ uncompensated care is not generally subsidized through government dollars, an estimated $5 billion in uncompensated care costs are still absorbed annually by providing physicians.[[#_ftn3|[3]]]

Hospitals charge that EMTALA patient requirements have led to increases in uncompensated care, since they can’t obtain an individual’s insurance information before examining them where the law applies, a charge which the evidence backs up. This increase also corresponds largely with a rise in the number of uninsured and a decrease in physician access more generally over the past two decades.

A figure which reflects EMTALA’s impact on emergency department utilization is that the amount of uncompensated care delivered by nonfederal community hospitals grew from 6.1 billion dollars in 1983, before passage of the law, to 40.7 billion dollars in 2004.[[#_ftn4|[4]]] According to a May 2003 American Medical Association study, the average emergency physician provided $138,300 of EMTALA-related care yearly, with a third of these physicians providing over 30 hours of such care per week. Physicians in other specialties provide, on average, about six hours a week of care mandated by EMTALA, and on average incurred about $25,000 of EMTALA-related bad debt in 2001.[[#_ftn5|[5]]] Community health clinics and free clinics, two of the only viable alternatives to EDs for the uninsured, are also disproportionately overcrowded and lacking funding.
Confusion Regarding the Law’s Scope of Applicability
Besides the cost burden associated with providing uncompensated care to the uninsured, given that some of the terminology used in the statute has been subject to differing interpretations, some contend that over the years the scope of the law’s applicability has come to exceed the law’s original intent. In a recent HHS survey, over 40 percent of emergency physicians and over 60 percent of hospital directors felt that some part of the EMTALA law or regulations were unclear. Among terms which gave rise to confusion, “emergency medical condition”, “medical screening exam”, and “stable for discharge” were also terms used in the legislation which caused a certain amount of confusion among hospital staff.

Legal definition of an EMC- ""A medical condition manifesting itself by acute symptoms of sufficient severity (including severe pain) such that the absence of immediate medical attention could reasonably be expected to result in --
placing the health of the individual (or, with respect to a pregnant woman, the health of the woman or her unborn child) in serious jeopardy, serious impairment to bodily functions, or serious dysfunction of any bodily organ or part, or "With respect to a pregnant woman who is having contractions --that there is inadequate time to effect a safe transfer to another hospital before delivery, or that the transfer may pose a threat to the health or safety of the woman or her unborn child."[[#_ftn6|

If no emergency condition exists, the patient can be transferred at any time. However, where an EMC exists, the patient can only be transferred once he or she has become stable… here, however, what constitutes “stability” comes into play.

Due in part to such difficulties on the part of medical staff in determining the scope of the law’s applicability, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 contained a provision requiring the Secretary of Health and Human Services to establish a Technical Advisory Group (TAG) to advise the Secretary concerning issues related to the regulations and implementation of EMTALA. Until the charter for the group expired in the fall of 2007, members of the group solicited advice from hospitals and doctors, along with reviewing EMTALA regulations themselves in order to make recommendations to HHS for changes to EMTLA regulations.[[#_ftn7|[7]]] Although the recommendations made by the group did result in some successful implementations and changes to the law as a whole, it remains unclear whether these changes have actually made it easier on medical staff to determine where a hospital’s EMTALA obligations begin and end, partly since there is some question on how up-do-date medical staff are. As far as the overall perceived impact on patient care, nearly half of the responding directors claimed EMTALA had a positive impact on emergency care through its patient protections, while the other half claimed care was not affected, due to the fact that their hospitals already provided such emergency services before the law’s enactment.[[#_ftn8|[8]]]

Conflicts between EMTALA and Managed Care Plans

Although the uninsured are the primary beneficiaries of the law’s patient protections, not all EMTALA-related shortfalls are attributed to uninsured patients. With the expansion in private managed care plans in the 1980s and 1990s has also come a new challenge to hospital emergency departments seeking to be reimbursed for EMTALA-mandated treatment. According to both the American College of Emergency Physicians and several surveyed hospital directors, private managed care organizations are denying or reducing payments for medical screening exams mandated under EMTALA when they don’t reveal the presence of an emergency condition. Since both the Interpretive Guidelines as well as the Special Advisory Bulletin published in 1999 by the two agencies with oversight responsibility for EMTALA, the Office of Inspector General (OIG) and the Health Care Financing Administration (HCFA), warn against seeking prior authorization for screening exams, some hospital directors complain that this forces them to chose between violating EMTALA and risking non-repayment. While in the past hospitals frequently covered for this ‘bad debt’ by shifting costs onto insured patients to make up the difference, this practice became much more difficult in recent decades with the rise of managed care plans, which institute strict price controls, and consequently leave little room for shifting costs.

Emergency Care in Texas: Magnifying a Flawed System

Since Texas as a state has the highest rate of uninsurance, it serves as a useful pilot state to test out some of the negative consequences attributed to EMTALA, namely the cost-shifting hypothesis whereby those lucky enough to have insurance through their employer are being charged higher premiums and deductibles to account for charity care being provided to such a large number of uninsured. A study by a liberal Washington think tank, Center for American Progress, estimates that private sector workers in Texas paid roughly $1800 more per family policy and $630 more per individual policy in order to help pay for uncompensated care to the uninsured. According to these figures, cost shifting represents roughly 13 percent of premiums paid in Texas, versus a national average of only 8 percent. Cost shifting is even worse in metropolitan areas of Texas which have the highest rates of uninsurance, such as Dallas. Dallas County has one of the highest rates of uninsurance among all major metropolitan counties, with nearly a third of all Dallas-area residents as a whole lacking health insurance. Given these disproportionately high numbers, it should perhaps come as no surprise that recently, officials at local Baylor Health Care System revealed that they charge insured patients 150% of the actual costs for their health care services to account for charity care of the uninsured and elderly, as well as underpayments by Medicare.[[#_ftn9|[9]]] In addition to resulting in greater cost shifting onto the backs of the insured, Texas’ high rate of uninsurance also has negatively impacted taxpayers as a whole. State hospitals and community health clinics that must rely on public funding levy property taxes on local homeowners and businesses to pay for uncompensated care.

Policy Solutions:

-Expand Coverage to unburden our Nation’s EDs and get a majority of the 46 million currently uninsured individuals access to sufficient levels of preventative and routine care, thereby reducing mortality and improving health outcomes. One important caveat, however, is that if such an expansion is to occur, the nation’s supply of doctors/medical staff must be sufficient to deal with an expansion. Evidence suggests that an expansion of coverage alone will not necessarily decrease emergency department utilization if individuals don’t feel they have sufficient and timely access to their primary care physicians. Hence, the success of reform in improving efficiencies in our health care system will have a marked impact on the task of relieving pressures on our nation’s emergency rooms. Emergency physicians have been pushing for a greater role in health reform debates, as well as for increased sources of funding to prevent the further closing of ERs nationwide.[[#_ftn10|[10]]]

[[#_ftnref1|[1]]] Fosmire, Sean M. “Frequently Asked Questions about the Emergency Medical Treatment and Active Labor Act (EMTALA)” Accessed 11/28/2009.

[[#_ftnref2|[2]]] Hadley, Jack, and Holahan, John.The Cost of Care for the Uninsured: What Do We Spend, Who Pays, and What Would Full Coverage Add to Medical Spending?” Kaiser Commission on Medicaid and the Uninsured, 2004 Issue Update

[[#_ftnref3|[3]]] “The Uninsured: A Primer- Key Facts About Americans without Health Insurance” Kaiser Commission on Medicaid and the Uninsured, January 2006: Accessed 11/4/09.

[[#_ftnref4|[4]]] “The Uninsured: Access to Medical Care”, American Collage of Emergency Physicians, Media Resource, Accessed 11/4/09.

[[#_ftnref5|[5]]]“EMTALA”, American Collage of Emergency Physicians, Media Resource, Accessed 11/4/09.

[[#_ftnref6|[6]]] Fosmire, Sean M. “Frequently Asked Questions about the Emergency Medical Treatment and Active Labor Act (EMTALA)” Accessed 11/28/2009.

[[#_ftnref7|[7]]]Emergency Medical Treatment and Labor Act Technical Advisory Group (EMTALA TAG) Accessed 11/24/2009.

[[#_ftnref8|[8]]] “The Emergency Medical Treatment and Labor Act: Survey of Hospital Directors” Office of Inspector General Executive Summary Accessed 11/24/09.

[[#_ftnref9|[9]]] Garrett, Robert and Roberson, Jason, “Cost of Care: 'Vicious circle' of uninsured results in higher bills for health coverage, taxes in Dallas-Fort Worth”. September 19, 2009. Accessed 11/5/09.

[[#_ftnref10|[10]]] Commins, John. “ACEP: Health Reform for EDs, Too”. HealthLeaders Media, April 15, 2009. Accessed 11/21/09.