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Los Angeles hospital can force Anthem to cover ER visits, court rules

October 2020

A federal appellate court recently ruled that Anthem be required to pay Martin Luther King Jr. Community Hospital for about 75 emergency room visits from covered patients. 

This situation is a common occurrence among Out-of-Network healthcare providers whereas a patient, who has health insurance coverage, seeks care, knowingly or unknowingly, at an Out-of-Network facility or has received care by an Out-of-Network provider. In an almost routine fashion, assignment of benefit forms are provided to patients and subsequently signed. An Assignment of Benefits intended purpose is so that those individuals or facilities who have provided care are paid directly, rather than having to seek payment, at a much later date, from their patient. 

Since COVID-19, this issue has exacerbated and become that much more detrimental to healthcare providers because of many patients economic situations. Rather than paying their healthcare provider for healthcare that had been provided, the situation occurs whereas a mortgage or car payment is paid with funds that are specific to healthcare that had already been rendered. 

A more common situation occurs whereas insurers do not instruct patients to pay their healthcare providers with funds that will be received in the mail. Health insurers are well aware that this is a burdensome exercise for healthcare providers and intentionally utilize the Out-of-Network status of a healthcare provider as a means to not pay appropriately, timely, and definitely not directly to the practitioner themself. 

As stated in the article, Anthem and its administrator, Budco Employee Retirement Income Security Plan, deny the Assignment of Benefits due to provisions within its policy benefits. This is a common statement regurgitated by health benefit plans and administrators, but is hardly ever justified with plan document language that clearly spells out the denial of such benefits. When seeking transparency of such documents, proprietary information is always the scapegoat by which the insurer or administrator utilizes to shield healthcare providers from seeking further action. 

As stated in a comment by an equally frustrated reader, as well as thoughtfully written, “this demonstrates the many flaws associated with ERISA (Employee Retirement Income Security Act), which make up their own set of plan rules. There is no mitigating agency the provider can turn too for resolution. Therefore, the larger cases are litigated and tied up in our court system and single providers or smaller medical groups lose because they cannot seek legal remedies due to the high cost of legal counsel”. 

The idea that an insurer or administrator can burden a healthcare provider solely due to their network status or because of the particularities of the policy (e.g. ERISA), is outrageous. Insurers must be relegated back to their position as risk managers and seek to provide the greatest benefit to their policyholders. Negotiating the best rates for their beneficiaries and providing transparency of plan benefits should be the goal. If patients desire their provider be paid directly, the insurer should be willing and able to accommodate their needs since it “makes the customer happy”.