1. INTRODUCTION

This memorandum provides an update on several recent developments concerning enforcement of the federal patient anti-dumping statute, the "Emergency Medical Treatment and Active Labor Act" or "EMTALA" (Social Security Act, § 1867; 42 U.S.C. § 1395dd) (the "Anti-Dumping Statute").

First, in May 1998, the Health Care Financing Administration ("HCFA") issued revised guidelines to state surveyors on how to ensure that hospitals comply with the Anti-Dumping Statute. These "Interpretive Guidelines and Investigative Procedures for Responsibilities of Medicare Participating Hospitals in Emergency Cases" (the "Guidelines") were released in a transmittal to the State Operations Manual ("SOM") (Transmittal No. 2) and became effective July 14, 1998.

Second, on December 7, 1998, HCFA and the Office of Inspector General (the "OIG") of the Department of Health and Human Services ("HHS") issued and solicited comments on a proposed Special Advisory Bulletin (the "Proposed Bulletin") designed to address the application of the Anti-Dumping Statute’s screening and stabilizing requirements to enrollees of managed care plans. Notably, neither the Guidelines nor the Proposed Bulletin carry the full force of law, but the practices they suggest are likely to become the benchmarks for state surveyors and HCFA Regional Offices enforcing the Anti-Dumping Statute.

Third, in a January 13, 1999 unsigned opinion (No. 97-53) in Roberts v. Galen of Virginia Inc., the U.S. Supreme Court decided that a plaintiff need not prove that a hospital possessed an improper motive in order to establish a violation of the Anti-Dumping Statute requirement that the hospital provide treatment to stabilize a patient suffering from an emergency medical condition. This decision reversed the holding of the U.S. Court of Appeals for the Sixth Circuit (111 F.3d 405 (1997)) in the same matter.

2. SUMMARY OF THE ANTI-DUMPING STATUTE

Originally enacted as part of the Consolidated Omnibus Budget Reconciliation Act of 1985 and amended thereafter, the Anti-Dumping Statute imposes emergency care requirements on hospitals that participate in the Medicare program. Specifically, a hospital that operates an emergency department must provide an appropriate medical screening examination to any individual who comes to the emergency department seeking treatment. If the screening examination reveals that an emergency medical condition exists (including where the patient is in active labor), the hospital must either provide for further examination and treatment of the patient in order to stabilize the emergency condition or it must make an appropriate transfer (with certain required certifications) of the patient to another facility, unless the treatment or transfer is refused.

A hospital may not transfer a patient unless the patient (or a responsible party) requests the transfer or a physician certifies that the medical benefits expected from treatment at the receiving facility outweigh the increased risks to the individual from the transfer. In all cases, a transfer must be considered "appropriate," meaning that the hospital’s transfer of the patient satisfies four primary criteria. The transferring facility must (a) provide medical treatment within its capacity that minimizes the risks to the patient’s (and any unborn child’s) health, (b) send all pertinent medical records available at the time of transfer to the receiving facility, (c) effect the transfer through qualified persons and transportation equipment, and (d) obtain the prior consent of the receiving hospital.

As a general matter, the law prohibits a hospital from delaying the provision of a screening examination or stabilizing treatment in order to inquire about a patient’s method of payment or insurance status. The Anti-Dumping Statute also mandates that hospitals post conspicuous signs specifying patients’ rights to examination and treatment for emergency conditions and that hospitals report to HCFA or the state survey agent any instance in which they believe they have received a patient in violation of the law.

Hospitals and physicians that violate the Anti-Dumping Statute’s requirements can be subjected to a number of different penalties, including termination of the hospital’s Medicare provider agreement or exclusion of the physician from participation in the Medicare and state health care programs, assessment of civil monetary penalties, and exposure of the hospital to civil suit by any patient who suffers personal harm as a direct result of a violation of the law.

3. JULY 1998 GUIDELINES

In addition to detailing the procedures that are to be followed by HCFA state survey agents when investigating complaints that allege possible Anti-Dumping Statute violations, the Guidelines describe with particularity the agency’s interpretation of hospitals’ responsibilities under the law. Some of the more significant clarifications set forth in the Guidelines are the following:

1. On-Call Coverage

Hospitals are required to maintain a list of physicians, including specialists and subspecialists, who are on-call for duty after a screening examination to provide further evaluation or stabilizing treatment to a patient with an emergency medical condition. HCFA has taken the position that, if a hospital offers a service to the public (or to inpatients), that service must also be available through on-call coverage of the emergency department. The agency clarified, however, that physicians are not required to be on-call at all times (e.g., the sole nephrologist on a hospital’s medical staff); rather, the hospital should have policies and procedures to be followed (e.g., pre-arranged transfer mechanism with another facility) when a particular specialty is not available or the on-call physician cannot respond due to a situation beyond his control.

HCFA also noted that, where a physician is on-call in his office, it is unacceptable for emergency cases to be referred to that office for examination and treatment. The on-call physician must come to the hospital to examine the patient unless the physician’s office is in a hospital-owned facility on contiguous land or on the hospital campus.

2. Scope Of An Emergency Department

Under the Guidelines, a "hospital with an emergency department" is defined as one which offers services for emergency medical conditions within its capability to do so, and lack of an established emergency department (i.e., in a defined area of the facility) is not an indication that emergency services are not provided. If a hospital (including a psychiatric hospital) offers emergency services for medical, psychiatric or substance abuse emergency conditions, it is required, within its capability and capacity, to comply with all requirements of the Anti-Dumping Statute.

More particularly, emergency services need not be provided in a location specifically identified as an emergency room or emergency department. If an individual arrives at a hospital and is not technically in the emergency department, but is on the premises (including the parking lot, sidewalk and driveway), and requests emergency care, he is entitled to a screening examination.

Where a screening examination or stabilization requires ancillary services available only in facilities outside the hospital’s emergency department, the hospital will be regarded as complying with the Anti-Dumping Statute as long as the patient is directed to a hospital-owned facility which is contiguous (i.e., any area within the hospital or hospital-owned facility on land that touches land where a hospital’s emergency department sits) or is part of the hospital "campus" and is operating under the hospital’s provider number. Further, when a patient is sent to another location for screening or treatment under such circumstances, it must be the case that: (i) all persons with the same medical condition are moved to this location, regardless of their ability to pay; (ii) there is a bona fide medical reason to move the patient; and (iii) qualified medical personnel accompany the patient.

If a patient comes to any contiguous or on-campus facility of a hospital that has one or more hospital-owned, non-contiguous or off-campus facilities (such as an urgent care center or satellite clinic), the medical screening examination must be performed within the facility where the patient presented, and the patient should not be moved to a non-contiguous or off-campus site. Similarly, if a patient comes to a hospital-owned facility which is non-contiguous or off-campus and operates under the hospital’s Medicare provider number, the requirements of the Anti-Dumping Statute apply to that facility. The facility (which would include a physician office operated as part of the hospital’s outpatient department) must screen and stabilize the patient to the best of its ability or execute an appropriate transfer. Although the issue of provider-based status is typically a matter of reimbursement alone, such status for reimbursement purposes now brings with it additional legal obligations under the Anti-Dumping Statute.

Finally, the Guidelines state that hospital property includes ambulances owned and operated by a hospital, even if the ambulance is not on hospital grounds, and non-hospital-owned ambulances which are on hospital property. A hospital may deny access to patients when it is on "diversionary" status; however, if an ambulance disregards the hospital’s instructions and brings a patient on to hospital grounds, the hospital must provide screening and stabilization services.

3. Triage Vs. Medical Screening Examination

The Guidelines clearly distinguish between a medical screening examination and triage. A screening examination is defined as the process required to reach, with reasonable clinical confidence, the point at which it can be determined whether a medical emergency does or does not exist. This can represent a spectrum ranging from a brief history and physical examination to a complex process involving the performance of ancillary studies and/or procedures. In contrast, triage merely determines the order in which patients will be seen, not the presence or absence of an emergency condition.

4. Capacity To Render Care

Under the Guidelines, the capacity to render care is not reflected simply by the number of persons occupying a specialized unit, the number of staff on duty or the amount of equipment on the hospital’s premises. Rather, capacity includes whatever a hospital customarily does to accommodate patients in excess of its occupancy limits. If a hospital has customarily moved patients to other units, called in additional staff or borrowed equipment from other facilities in order to accommodate additional patients, it has demonstrated the ability to provide services to patients in excess of its occupancy limits.

5. Definition Of Stabilization

A patient will be regarded as stabilized if the physician treating the emergency condition has determined, with reasonable clinical confidence, that the emergency medical condition has been resolved. Patients whose emergency conditions have not been resolved can be deemed stable for one of two purposes -- "stable for transfer" or "stable for discharge."

For a patient to be considered stable for transfer between facilities, the treating physician must: (i) determine, with reasonable clinical confidence, that the patient is expected to leave the hospital and be received at the second facility with no material deterioration in his medical condition; and (ii) reasonably believe the receiving facility has the capability to manage the patient’s condition and any reasonably foreseeable complication(s) of that condition. With respect to psychiatric conditions, a patient is deemed stable for transfer if he is protected and prevented from injuring himself or others. If a disagreement arises between the treating physician and any off-site physician as to the patient’s condition for transfer, the medical judgment of the treating physician usually takes precedence over that of the off-site physician.

A patient will be considered stable for discharge when, with reasonable clinical confidence, it is determined that the patient has reached a point where his continued care (including diagnostic work-up or treatment) could be reasonably performed as an outpatient or later as an inpatient, provided that the patient is given a plan for appropriate follow-up care with the discharge instructions. With respect to psychiatric conditions, a patient is deemed stable for discharge if he is no longer considered to be a threat to himself or to others.

6. Appropriate Transfers

The Guidelines confirm that a hospital has only two options with respect to a patient who, after a screening examination, has been determined to have an emergency condition. Either the hospital can provide treatment to stabilize the condition and subsequently discharge or transfer the patient, or the hospital can appropriately transfer an unstabilized patient to another medical facility if the emergency condition still exists. If an unstabilized patient is to be transferred, all four regulatory requirements for an "appropriate transfer" must be satisfied (see Section II above); the patient cannot simply be referred away after the initial requirement for an appropriate transfer (i.e., treatment to minimize the risks of transfer) has been satisfied.

An appropriate transfer requires the consent of the receiving facility; however, the only circumstances in which a receiving hospital is required to accept a transfer is where the patient requires specialized capabilities of the facility (e.g., a burn unit, shock-trauma unit, neonatal intensive care unit or, in rural areas, a regional referral center).

4. DECEMBER 1998 PROPOSED BULLETIN

HCFA and the OIG (together, the "Agencies") issued and solicited comments on the Proposed Bulletin in a stated effort to provide "clear and meaningful" advice with regard to application of the Anti-Dumping Statute’s provisions and to ensure greater public awareness of hospitals’ obligations in providing emergency services to managed care plan enrollees, including, specifically, those whose plans require "prior authorization" for such emergency services. The Proposed Bulletin addresses four main topics:

· Hospitals’ obligations to provide screening and stabilizing emergency treatment to all patients seeking such care;

· Special concerns in the provision of emergency services to enrollees of managed care plans;

· Rules governing Medicare and Medicaid managed care plans with respect to prior authorization for emergency services; and

· Practices that will promote hospitals’ compliance with the Anti-Dumping Statute when managed care enrollees seek emergency services.

Our summary below focuses on the last three of these topics.

1. Special Concerns With Respect To Managed Care Enrollees

By way of introduction, the Agencies noted in the Proposed Bulletin their understanding that some hospitals routinely seek prior authorization from a patient’s primary care physician or from the plan when a managed care enrollee requests emergency services, because the failure to do so may result in the plan’s refusal to pay for the emergency services and the patient’s subsequent personal liability therefor. The Agencies expressed concern, however, that "such an inquiry my improperly or unduly influence patients to leave the hospital without receiving an appropriate medical screening examination."

Although they explicitly acknowledged that hospitals are often caught between their legal obligations under the Anti-Dumping Statute and the terms of their agreements with managed care plans, the Agencies stated their view that, notwithstanding the terms of such agreements, the Anti-Dumping Statute continues to govern the obligations of hospitals to screen and provide stabilizing treatment to patients who seek emergency care regardless of their ability to pay. Consequently, once a managed care enrollee presents at a hospital that offers emergency services, the hospital must provide the services required under the Anti-Dumping Statute "without regard for the patient’s insurance status or any prior authorization requirement of such insurance."

2. Medicare/Medicaid Managed Care Plan Prior Authorization Rules

As part of the Proposed Bulletin, the Agencies highlighted statutory amendments recently enacted under the Balanced Budget Act of 1997 (Pub. L. 105-33) which prohibit Medicare and Medicaid managed care plans from requiring prior authorization for emergency services and require them to pay for such services, without regard to whether the hospital providing the services had a contractual relationship with the plan. They noted further that the obligation to pay for emergency services is based on a "prudent layperson" standard, meaning that the need for emergency care should be determined from a reasonable patient’s perspective at the time of symptom presentation.

3. Practices Promoting Anti-Dumping Statute Compliance

In light of the Agencies’ view that discussions between a hospital staff member and a patient regarding potential prior authorization requirements and their financial impact that have the effect of delaying a medical screening are violations of the Anti-Dumping Statute, the Agencies suggested the following practices to minimize the likelihood of such violations:

1. No Prior Authorization Before Screening Or Stabilization. It is not appropriate for a hospital to request (or a health plan to require) prior authorization before a patient has received a screening examination or stabilizing treatment.
2. No Financial Responsibility Or Advanced Beneficiary Notification Forms. Before performing a screening examination, a hospital should not ask a patient to complete a financial responsibility form or an advanced beneficiary notification form and should not ask the patient to provide a co-payment for any services rendered. In the Agencies’ view, this could deter the patient from remaining at the facility to receive needed care.
3. Qualified Medical Personnel Must Perform Screening Examination. Hospitals must ensure that either a physician or other qualified medical personnel (i.e., authorized by the governing body to perform certain medical functions) provides an appropriate screening examination to all persons seeking emergency services. The screening examination may range from a simple examination to a complex one, involving the use of ancillary services.
4. When A Patient Inquires About Financial Liability For Emergency Services. Any such inquiry should be answered by a hospital staff member who has been well trained to provide information on potential financial liability and who is knowledgeable about the facility’s Anti-Dumping Statute obligations. The staff member must clearly inform the patient that, notwithstanding the patient’s ability to pay, the hospital is ready and willing to provide a screening examination and stabilizing treatment, if necessary. Any patient who believes he has an emergency medical condition should be encouraged to remain at the hospital for a screening examination and to defer further discussion of financial responsibility until after the examination is performed.
5. Voluntary Withdrawal. If a patient chooses to withdraw his request for examination or treatment at the presenting hospital, the facility must: (a) offer the patient further medical examination and treatment as may be required to identify and stabilize an emergency condition; (b) inform the patient of the risks and benefits of such examination and treatment and of withdrawal before receiving such care; and (c) take reasonable steps to obtain the patient’s written informed consent to refuse the care and document the refusal in the medical record.

1. ROBERTS V. GALEN OF VIRGINIA INC.

The lawsuit from which the Roberts opinion arose was brought on behalf of Wanda Johnson, who was hit by a truck in May 1992 and was rushed to the defendant’s hospital, The Humana Hospital - University of Louisville, in Louisville, Kentucky ("Humana"). Johnson had been severely injured in the accident, suffering trauma to her brain, spine, right leg and pelvis. After a six week stay at Humana, during which time her health remained in a fragile state, the defendant arranged for her transfer in July 1992 to Crestview Health Care Facility ("Crestview"), a nursing home across the river in Indiana. Upon arrival at Crestview, Johnson’s condition deteriorated rapidly, and she was transferred to the Midwest Medical Center in Indiana, where she remained for many months and incurred substantial medical expenses. Johnson applied for assistance under Indiana’s Medicaid program but was denied because she did not satisfy the program’s residency requirements.

Johnson’s guardian filed a federal action alleging violations of section (b) of the Anti-Dumping Statute (42 U.S.C. § 1395dd(b)). In specific, this section of the law provides that:

The Court of Appeals affirmed the District Court’s grant of summary judgment for the defendant, holding that, in a suit alleging a violation of § 1395dd(b)’s stabilization requirement, a plaintiff must show that the hospital’s inappropriate stabilization resulted from an improper motive, such as one involving the patient’s indigency, race or sex.

In making its determination, the Sixth Circuit relied heavily on its earlier holding in Cleland v. Bronson Health Care Group, 917 F.2d 266 (1990), in which it read the Anti-Dumping Statute’s "appropriate medical screening" duty (see 42 U.S.C. § 1395dd(a)) as requiring a plaintiff to show an improper reason why he received substandard attention upon presentation at the hospital emergency room. As the Supreme Court described, the Cleland court "was concerned that Congress’ use of the word ‘appropriate’ in § 1395dd(a) might be interpreted incorrectly to permit federal liability under EMTALA for any violation covered by state malpractice law."

The Supreme Court reversed the Court of Appeals and remanded the case for further proceedings. It found that, because the text of § 1395dd(b) does not require "appropriate" stabilization, the Cleland court’s interpretation of the "appropriate medical screening" requirement did not control. The Court concluded there was "no question that the text of § 1395dd(b) does not require an ‘appropriate’ stabilization, nor can it reasonably be read to require an improper motive." Further, the Court remarked that this fact had been conceded by the defendant, which "note[d] in its brief that ‘the "motive" test adopted by the court below … lacks support in any of the traditional sources of statutory construction.’" Consequently, the Court held that the Anti-Dumping Law’s stabilization duty in § 1395dd(b) contains no express or implied "improper motive" requirement.

Beyond negating any need for a plaintiff to demonstrate improper motive when establishing a violation of the law’s stabilization requirement, the Supreme Court’s decision in Roberts leaves many interpretive questions about the Anti-Dumping Statute unanswered. For instance, the Court specifically declined to address the defendant’s argument that it satisfied its duty under the Anti-Dumping Statute by properly screening and stabilizing Johnson upon her initial presentation at Humana’s emergency department. It is also unclear whether the Court would apply a similarly strict textual approach to circuit court decisions that have required plaintiffs to prove that they received disparate treatment compared to other emergency patients when they received an initial screening examination.

Please do not hesitate to contact Andrea M. Kahn-Kothmann (215-851-8106) or any member of the Reed Smith Health Care Group with whom you work if you would like additional information or if you have questions.