By Renuka Rayasam and Paul Demko

Health plans intent on driving down costs are zeroing in on emergency room visits — one of the biggest drivers of medical inflation but a category of care that's seldom been subject to denials.

Anthem, the country’s largest Blue Cross Blue Shield plan, shook the market last year by refusing to pay for some ER visits it deemed unnecessary, triggering heated battles with hospitals and doctors and fueling a broader debate over whether patients can find less expensive settings without putting their health at risk.

Since then, Blue Cross Blue Shield of Texas has adopted a similar policy limited to patients with HMO plans at out-of-network hospitals. And UnitedHealth Group, the country’s largest insurer, is using its own methodology to scrutinize if hospitals are charging too much for emergency care. If it concludes they are, UnitedHealth won’t cover the full amount of the claim.

“Many insurers are watching what the big dogs are doing, and there would be interest” in taking similar steps, said Fred Bentley, a vice president at the consulting firm Avalere Health.

Hospitals and doctors are livid about the trend, and in some cases taking insurers to court, arguing the companies are potentially putting patients at risk in order to pad their profits.

“I don’t think it’s a good idea to tell people, ‘If you go to an emergency room, I will decide later whether to pay or not,’” said Texas Medical Association president Douglas Curran.

The dust-ups have grabbed the attention of some in Congress. Sen. Claire McCaskill (D-Mo.) and Ben Cardin (D-Md.) in March sent a letter to HHS Secretary Alex Azar and Labor Secretary Alexander Acosta asking them to look into whether Anthem’s new policy violates federal law.

“Patients should not be forced to act as their own doctors and second guess themselves when they truly believe that they are having a medical emergency,” McCaskill wrote.

Federal laws including the Affordable Care Act and some states require insurers to cover ER procedures if a "prudent layperson" concludes he or she needs immediate medical attention. Anthem says it’s adhering to that standard in making coverage decisions.

Emergency room spending essentially doubled between 2009 and 2016, even though the number of patients treated remained flat, according to an analysis of insurer claims data recently published by the Health Care Cost Institute.

The growth is being driven entirely by the most expensive claims. Costs stemming from the two most expensive tiers of claims each grew by more than 120 percent over the seven-year stretch, while the two cheapest tiers saw a slight reduction in overall cost.

“The population isn’t really changing, but we’re seeing more and more people who are coming in are being billed for these higher services,” said Kevin Kennedy, one of the authors of the HCCI report, which is based on claims data from four of the country’s largest insurers.

Anthem began rolling out its controversial policy last year, drawing immediate protests from providers. The company this year clarified when it will deny claims in the seven states where the policy has been implemented.

For example, the insurer won’t deny the claims of patients who lack an urgent care facility within 15 miles of their homes, if the patient is under the age of 15 or if the emergency room visit occurred between 8 p.m. Saturday and 8 a.m. Monday morning or on a major holiday.

“If a consumer feels he or she has an emergency they should always call 911 or go to the ER,” Anthem said in a statement. “But for non-emergency health care needs, ERs are often a time-consuming place to receive care and in many instances 10 times higher in cost than urgent care.”

The changes haven’t placated providers. At least two hospital systems — Virginia’s Sentara Healthcare and Northeast Georgia Health System — have sued over the policy, arguing that it amounts to a breach of contract.

“Anthem’s ED Policy has harmed and is continuing to harm NGHS and its patients,” reads the complaint from the Gainesville-based hospital system, “including by discouraging patients from seeking potentially life-saving care in NGHS’s hospital emergency departments.”

The Texas Blues' attempt to review HMO claims for out-of-network emergency room visits has sparked similar outrage. The insurer agreed to delay the policy, which was set to go into effect June 4, for 60 days after the Texas Department of Insurance requested more information.

The company said that the change was a response to the proliferation of free-standing emergency departments across the state. Critics of the for-profit facilities say they often treat non-urgent conditions while charging emergency room prices and refusing to contract with insurers.

“This was never an issue in Texas until we had all of these out-of-network free-standing ERs,” said Paul Hain, North Texas market president for Blue Cross and Blue Shield of Texas. Hain said the policy would allow the insurer to review HMO member claims to make sure that the facility was delivering the services it was charging for, and that members weren’t visiting facilities for routine services like physicals.

(BCBSTX is owned by Health Care Service Corporation, which operates Blue plans in four other states. So far, the new policy is limited to Texas.)

But provider groups called the approach “Monday morning quarterbacking” that second-guesses patients and doctors dealing with emergencies.

The Texas Medical Association’s Curran blames insurers for narrowing provider networks while refusing to pay extra for doctor’s offices to remain open after hours or reimburse them for telemedicine service. He says that patients end up in the emergency room because they lack other options for care on evenings and weekends.

The medical association and the Texas Association of Freestanding Emergency Centers have requested meetings with BCBSTX to discuss the potential change, but said that the insurer hasn’t responded.

The insurer counters that it already funds another virtual health service and a 24-hour nurse hotline and said it will use the 60-day delay “to communicate with all appropriate stakeholders, including physicians.”

Echoing provider concerns, state regulators in Texas asked the insurer for more details about the process and questioned whether the company brought concerns about fraud to state agencies.

“The increasing costs and difficulties around emergency care are exacerbated by the general unwillingness of these new free-standing emergency businesses to join insurers’ networks,” said Ken Janda, president and CEO of Houston insurer Community Health Choice.

Janda says that his efforts to negotiate in-network rates at free-standing ERs have fallen flat because the facilities want far more than the customary Medicare rate.

“When insurers push back and say that’s enormously inflated beyond usual and normal rates, the ERs then bill patients the difference. That’s not fair to the patients. ... It skews the whole coverage system.”

Still-rising emergency room costs mean the disputes are unlikely to die down anytime soon. If anything, Texas is likely a bellwether because of the rapid spread of free-standing emergency facilities in the state as well as to places like Colorado.

“The trend doesn’t seem to be changing,” said Kennedy of the Health Care Cost Institute. “It keeps on going in the same direction.”