New EMTALA Position Announced

By Wendy Pulliam, J.D., LL.M. candidate

The Clinton Administration shined a spotlight on hospitals that violate the Emergency Medical Treatment and Active Labor Act (EMTALA) when, on November 30, 1998, it announced a new policy prohibiting hospitals from denying or delaying emergency treatment to insurance subscribers while the hospitals wait for treatment authorization from the subscribersí insurers.

EMTALA was enacted to prevent hospitals from denying treatment to indigent patients and from transferring patients to another hospital before they are stabilized. EMTALA requires a hospital to screen a patient to determine whether the patientís condition is a medical emergency. Where an emergency exists, the hospital must first stabilize the patientís condition before releasing or transferring the patient. EMTALA applies to any hospital that receives federal funds.

While EMTALAís main objective is treatment of the indigent, its potential scope is much broader. The Administrationís recently announced policy illustrates this by focusing on a hospitalís obligation to the insured population. The policy, however, does not address who must bear the financial responsibility for this emergency treatment.

Hospitals contend that they wait to provide treatment to subscribers until authorization is obtained, because insurers frequently refuse to pay where the insurers do not agree that an emergency exists. Insurers contend that they should not be required to pay for treatment where subscribers use the emergency room as if it is a doctorís office.

Who then is left to pay for treatment mandated by EMTALA? No corresponding federal statute holds insurers or health maintenance organizations (HMOs) responsible for denying payment for "emergency" treatment already provided. Moreover, even if the hospital or the subscriber sued the insurer or HMO for payment, the insurer or HMO can be expected to argue that it has no obligation to pay because the condition does not constitute an emergency under the terms of the contract.

In short, EMTALA appears to place a disproportionate burden on hospitals. If a hospital fails to comply with EMTALA, it may be subject to a fine of up to $50,000 per occurrence as well as to a civil action by the denied/transferred subscriber. If a hospital complies with EMTALA without obtaining authorization, it may not be reimbursed for the care provided.

Many hospitals already operate at a financial deficit. In its current form, the Administrationís new policy will more than likely only exacerbate the problem. It appears to require hospitals to incur the expense of caring not only for the indigent but also for the insured population, where insurers or HMOs later refuse to pay for the care provided.

Perhaps the Administration could strike a balance and distribute the financial burden for emergency care at least where insurance is available by asking Congress to create or require the insurance industry to create a clearer standard for judging when an emergency exists. The interests and resources of all concernedópatients, hospitals, insurers, and HMOsócould be better served thereby. Additionally, the Administration could also ask Congress to provide for the imposition of monetary sanctions on insurers and HMOs, where they refuse to pay for valid emergency treatment.

01/25/99