Health Policy, Legislation

Is the Sky Falling?

The past year saw a flurry of activity in the world of health policy, with movement in the regulatory and legislative realms on multiple fronts. For emergency medicine physicians, there have been times when it seems like the sky is falling. Funding for residency spots has become problematic; the lack of political will for mental health reform has left our emergency departments with few effective treatment options for psychiatric care; and our future reimbursement has been endangered by regulation and legislation related to balance billing (a.k.a. fair payment). With so many perceived threats, it's no wonder that alarm bells are sounding. There is a clear need for our specialty and individual emergency physicians (like us!) to get involved and advocate. To that end, let's review some topics that will be important to our future practices.

Graduate Medical Education

The Issue

There is a great debate brewing about the future of residency funding. Medicare has provided the vast majority of graduate medical education (GME) funding since the mid-1960s. Funding from Medicare is divided into two pots: direct graduate medical education (DME) and indirect graduate medical education money (IME). Medicare DME funds total about $3 billion per year and cover things like resident salaries and the costs of an education infrastructure. IME funding amounts to nearly $7 billion per year and is intended to cover the higher complexity of patients at teaching hospitals as well as the inherent inefficiency of resident care. The Balanced Budget Act of 1997 restricted the number of residents that teaching hospitals could claim, thereby essentially freezing Medicare spending on residency spots to 1996 levels. Citing the projected shortfall in the number of physicians (including emergency physicians), groups like the American Medical Association, the American Association of Medical Colleges, and ACEP have argued that further money from Medicare is needed.

Things have gotten complicated since the Institute of Medicine released a report on GME funding in 2014 that challenged longstanding norms in GME. First, the report questioned the presence and size of the impending physician shortage, arguing the problem is instead one of geographic and specialty distribution. Accordingly, the report's authors imply that the federal government should better organize funds rather than increase funding. They propose abolishing the current DME and IME system and replacing it with one that gives teaching hospitals a standardized per-resident amount while keeping $3 billion of the $10 billion spent annually for a transformational fund that would sponsor pilot projects aimed at innovating GME. Lastly, the report supports the creation of a GME office within the Department of Health and Human Services that would be charged with ensuring transparency in residency program spending and holding residencies accountable for meeting performance metrics.

What's Going On

Due to the price tag associated with GME funding expansion and now the IOM report, it has been difficult for GME advocates to drum up meaningful support in Congress. The Resident Physician Shortage Reduction Act of 2015 (H.R. 2124) was introduced in May, but – despite support from organizations like the AMA, AAMC, and ACEP – it likely will die in committee. Bills that work to incorporate some of the IOM report's recommendations have also started appearing in Congress. The Medicare IME Pool Act of 2015 (H.R. 3292) was introduced in July and would eliminate IME funds in favor of a single DME allocation. This would take away a considerable funding stream from academic hospitals and is opposed by the AAMC.

There is some hope for funding increases via the Veterans Administration. The “Choice Act” became law in 2014 and allows for the creation of 1,500 new residency spots at VA facilities. To that end, an effort within the VA called “Building Bridges” was created to increase the number of EM residencies that include VA hospitals among their clinical sites. Many residencies are looking to take advantage of this funding opportunity, while others are unaware of the program. ACEP is also advocating for legislation that relaxes funding restrictions for resident rotations at non-hospital and rural sites. This would allow residents to experience rural emergency medicine in residency, with the intent of getting more residents to practice in rural settings after graduation. Lastly, there is a continued push from ACEP and other medical organizations to convince congress to fund the ACA's Workforce Commission. This yet-unfunded component of the ACA was charged with eliminating the controversy about the physician shortage by performing an unbiased assessment of future workforce needs.

Mental Health Reform

The Issue

The state of our mental health system is poor. Over the past 40 years, there has been a push to deinstitutionalize psychiatric care, leading to the closure of inpatient facilities and an increased reliance on outpatient treatment centers and programs. Unfortunately, there has been a concurrent decrease in reimbursement for psychiatric services, such that outpatient systems are becoming overwhelmed. The ACA included provisions to improve funding and reimbursement for mental health care, but it's unclear whether any of these provisions have helped in a significant way. For example, a policy brief published by Health Affairs in November highlighted that despite ACA requirements, many insurers were not providing equal coverage for mental health care compared to conventional medical care.

In the emergency department, we see the effects of our broken system every day. As avenues for inpatient and outpatient treatment have disappeared, the ED has become a place of refuge for patients with acute and chronic mental illness. With no timely options for care, EDs are increasingly “boarding” psychiatric patients while they await psychiatric evaluation and eventual transfer to a mental health facility. While some hospital systems and municipalities have worked within the current system to expand resources, most of the country still struggles mightily with the issue of acute psychiatric care.

What's Going On

In response to both of these issues, there has been ample activity at the federal level to find solutions. One recent success story was the “Improving Access to Emergency Psychiatric Care Act” (S.599). The bill was signed into law by President Barack Obama on Dec. 12, 2015. It extended an ACA-initiated Medicaid demonstration project that lifts restrictions on reimbursement to psychiatric hospitals. In states without the demonstration project, Medicaid cannot reimburse inpatient psychiatric facilities with more than 16 beds (so-called “Institutes of Mental Illness” or IMDs) for care delivered to patients who were not initially admitted to a conventional acute care hospital. The “IMD exclusion” was meant to spur states to independently fund mental health services. Unfortunately, states have been mostly unwilling or unable to do so, leaving the most vulnerable psychiatric patients to navigate a maze-like system. The IMD exclusion is part of the reason why it is so difficult to place Medicaid enrollees into psychiatric facilities from the ED. Though the demonstration project is only extended through fiscal year 2016, there is a possibility it will be extended to 2019.

More comprehensive mental health legislation has also been introduced in both the House and Senate. However, it remains to be seen if there is enough political will to move forward with reform. Perhaps most notably, a bill sponsored by Rep. Tim Murphy (H.R. 2646), “The Helping Families in Mental Health Crisis Act,” has been introduced in the House Energy and Commerce Committee. Among other things, the bill proposes to eliminate the Medicaid IMD exclusion, funds expansion of the mental health workforce, and promotes telemedicine services. The bill initially had 40+ Democratic co-sponsors, but many Democrats and civil liberties groups have expressed concerns about a provision that gives caretakers more access to patient records, plus another that increases funding to states participating in court-ordered treatment programs.1 It's unclear whether Rep. Murphy will be willing to modify the bill as it moves through the House. Other mental health legislation, like Sen. John Cornyn's “Mental Health and Safe Communities Act of 2015,” has been even more controversial. Democrats and gun-control advocates have universally panned the bill because of NRA-friendly provisions that relax gun ownership restrictions on the mentally ill. It seems more pressure is needed from patient and provider groups to push legislation forward.

Balance Billing

The Issue

Perhaps the hottest policy issue in emergency medicine is “balance billing.” What is this? Balance billing comes into play when physicians treat patients who are considered “out-of-network” (OON) by the patient's insurer. When no contract exists between a patient's insurer and a physician, the physician will often submit a claim for their usual rate (as opposed to the discounted rate they would accept from a contracted insurer). Depending on the insurer and the type of insurance, the insurer may only pay a portion of the physician's charges, leaving the physician to collect the unpaid balance from the patient. A 2010 federal regulation known as the “greatest of three” (GOT) rule mandates that insurers pay a minimum amount to emergency providers in order to protect patients from large balance bills.2 Insurers can pay the greatest of their in-network rate, their “usual” out-of-network rate, or the Medicare rate. Seeing that insurers control 2 of the 3 amounts, they have predictably used GOT to put downward pressure on OON reimbursement. Out-of-network emergency physicians are stuck between a rock and a hard place: they can simply accept lower reimbursement from insurers or they can bill their patient for the unpaid balance. From a patient's perspective, imagine seeking care from a physician you thought was in-network but ends up being OON – and then getting a bill for much more than planned. Stories of patients receiving exorbitant “surprise bills” have permeated the news and have prompted consumer groups and insurers to propose bans on balance billing in many states.3,4,5

For a number of reasons, these bans are particularly problematic for emergency physicians. When contracting with insurers, the only real leverage emergency physician have is their out-of-network rate. Moreover, with the GOT regulation, insurers are only required to pay an amount they control. Without the ability to balance bill, insurers will have no incentive to negotiate contracts with emergency physicians. In this manner, in-network rates will be forced lower and lower. As mandated by our specialty ethos and EMTALA, emergency physicians see anyone who comes to the ED, regardless of their ability to pay or their insurance plan. As a result, insurers know we will care for patients regardless of our contract status. If they also know that emergency physicians will be forced to accept their OON payments without the option to balance bill, there will be no financial reason to contract. If not combined with a payment standard that is fairer than the “greatest of 3,” bans on balance billing would put our ability to seek fair payment for our services in serious jeopardy.

What's Going On?

Legislation targeting balance billing has been passed or is being considered in many states.6,7 ACEP and other specialty organizations are working together in many states to modify and/or defeat balance billing legislation while still working to protect our patients' financial well-being. Some chapters are proposing alternative consumer protection laws that aren't as punitive toward physicians. This includes more robust disclosure requirements, arbitration processes, and “hold harmless” provisions. Notably, “hold harmless” laws essentially take the patient out of the OON reimbursement fight, and put the onus on insurers to pay OON charges or negotiate another rate with the physician. Another strategy is to tie minimum OON reimbursement to an objective, unbiased database of physician charges. Physicians would then get a much fairer minimum OON reimbursement from insurers. Lastly, in the regulatory realm, ACEP and sister organizations continue to speak with federal regulators at CMS about changing the language of the GOT rule. No doubt, this issue will require significant legislative and regulatory advocacy by emergency physicians for the foreseeable future.

What Can You Do?

Attend LAC

Issues that affect emergency medicine will ultimately affect us as residents. It is in all of our best interests to learn about the issues, stay informed, and be willing to advocate on our specialty's behalf. The ACEP Leadership and Advocacy Conference (LAC), coming up May 15-18, is the perfect opportunity to get acquainted with the issues, meet leaders in emergency medicine, and interact with legislators who make the decisions that affect us. The conference is one of ACEP's most popular events and is offered to residents at a heavily discounted rate. This year's conference will also feature the release of the 4th Edition of the famed EMRA Advocacy Handbook. LAC kicks off Sunday, May 15, with a “First-timers Track” hosted by EMRA and the ACEP Young Physicians Section. The half-day track introduces residents and recent graduates to the most important policy issues affecting emergency medicine, including GME, balance billing, alternative payment models, and how to become an advocate leader. EMRA offers travel scholarships to the conference, and many residencies, academic chairs, and state ACEP Chapters offer the same.

Join the ACEP 911 Network

If you want to get informed and involved before LAC, join the ACEP 911 Network. You'll receive weekly legislative updates from the ACEP D.C. office as well as action alerts when your voice is needed.

Impact the 2016 Elections ”” Support NEMPAC Today!

The National Emergency Medicine PAC is gearing up for a highly competitive 2016 election season. NEMPAC has special donor levels and benefits for EM residents that include invitations to VIP receptions and briefings. Check out the NEMPAC website to contribute and see how your EM colleagues are getting involved. NEMPAC is committed to staying in the top tier of medical PACs and residents' support is essential to keep emergency medicine issues front and center in Congress and ensure the future of the specialty.

Stay Informed

Last but not least, join the policy conversation on Twitter by following the EMRA Health Policy Committee at @emadvocacy.


  1. Huetteman E, Perez-Pena R. Paul Ryan Pushes Changes in Mental Health Care After Colorado Shooting. The New York Times. Dec. 1, 2015. Accessed December 2015.
  2. Federal Register, June 28, 2010;37188-37241.
  3. Rosenthal E. After Surgery, Surprise $117,000 Medical Bill From Doctor He Didn't Know. The New York Times. Sept. 20, 2014. Accessed Dec. 11, 2015.
  4. Bernard TS. Out of Network, Not by Choice, and Facing Huge Health Bills. The New York Times. Oct. 18, 2013. Accessed Aug. 25, 2015.
  5. Shapiro J. Policy Shift by Nation's Largest Insurer Could Leave Some with Unexpected Bills. St. Louis Post-Dispatch. March 30, 2015. Accessed Dec. 11, 2015.
  6. State Restriction Against Providers Balance Billing Managed Care Enrollees. Kaiser Family Foundation. Accessed Dec. 11, 2015.
  7. Hoadley J, Lucia K, Schwartz S. Unexpected Charges: What States Are Doing About Balance Billing. Prepared for the California Health Care Foundation. 2009.