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Emergency Department Costs, Severity of Cases on the Rise

ESO Staff

A recent study is showing that emergency department spending per patient has nearly doubled from 2009 to 2016 – with a marked increase in the number of highest severity ratings – despite the fact that the overall usage of EDs has remained constant.  

The not-for-profit Health Care Cost Institute recently published a report analyzing employer-sponsored insurance claims for the five ED procedure codes used to bill for ED visit facility fees. Over the seven-year timeframe of the study, the researchers reviewed more than 11.8 million procedure code claim lines per year, representing more than 4.7 million patients.  

During the study period, ED visit spending per person rose 98%, despite the overall ED use remaining the same. The average price of the facility fee claim was also up 98% over the same timeframe. A possible cause of the increase was a noticeable shift in the classification of severity of ED cases. For example, the number of cases receiving the most severe rating (a level 5 on a scale of 1-5) rose 38%, with the price of that code increasing 77%. At the same time, the use of the lowest-acuity code (level 1) fell 41%, although the price for that code grew 47%.  

Additionally, the average price of a facility fee claim in 2009 was $452, while in 2016, it was $894, a 98% increase. Again, all of these changes and increases occurred while overall use of ED remained the same. 

In response to these increases, insurance companies are taking drastic measures. For example, UnitedHealth Group instituted a new nationwide policy for more closely scrutinizing and adjusting facility claims for the most severe and costly ED visits for patients enrolled in its commercial and Medicare Advantage plans. National insurer Anthem took it one step further, denying coverage for visits to the ED that it determines were not for “true emergencies,” sparking an outcry from hospitals worried that this policy will ultimately harm patients and ED providers. 

The significant cost increases, along with the subsequent reactions by insurance companies, make it imperative for hospitals and EDs to review their operating statistics in more regular, shorter timeframes, ensuring that all staff fully understand and abide by standard operating procedures, especially when it comes to the acuity classifications. Identifying areas of concern or trends can help a hospitals adjust its training and procedures to ensure patients are receiving the more accurate classifications. 

Additionally, accurate recordkeeping can help ensure that all audits fully reflect the current needs of the ED, ensuring that the team is fully staffed so that nurses and physicians have the time and resources needed to accurately classify cases coming in their doors.  

An overall effort to reduce ED costs and increase efficiencies can give hospitals more of a buffer to adjust to changes implemented by insurance companies. New technologies, like bidirectional data-sharing software, make these tasks easier and more efficient for hospitals, allowing easier review of statistics along the full spectrum of care, from first response to discharge. Rather than having to dig through and analyze piles of paperwork, digital patient records and case notes are easily sorted and compiled, making reporting easier and more accurate. Hospitals and EMS agencies can share information between their two organizations to help improve patient care and outcomes, and increase efficiencies as well.   

As insurance companies begin to tighten their belts to battle the increasing ED costs, hospital providers can be prepared and mitigate the impact by keeping more accurate records and identifying areas where procedures can be improved – specifically in classification of cases – to ensure that they are always able to provide the best care to patients experiencing true emergencies. 

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