EmCare Holdings, one of the biggest emergency room staffing companies in the country, is facing scrutiny by U.S. Sen. Claire McCaskill, who has asked it to justify its billing rates.
McCaskill sent a letter last week to the president and CEO of EmCare’s parent company, Envision Healthcare, detailing her concerns, saying that its billing practices “may have contributed to a decline in health care quality and access for patients.”
McCaskill’s letter comes after a recent Yale University study found that hospitals that outsourced their emergency care to EmCare had average out-of-network billing rates of 62 percent. At 16 hospital emergency departments where EmCare assumed management, the study found, out-of-network billing rates increased by more than 70 percentage points.
EmCare called the study “fundamentally flawed and dated” but acknowledged patients’ dissatisfaction with unexpected medical bills, when they first learn that physicians who treated them are not part of an insurance network.
In her letter to Christopher A. Holden, the head of Envision Healthcare, McCaskill, a Democrat from Missouri, cited a July story in The New York Times reporting that after one Washington hospital contracted with EmCare, “the number of patient ER visits that received the highest-level billing code jumped from 6 percent to 28 percent.”
Although hospitals negotiate fees with health insurers, the physicians provided by EmCare typically are not part of those networks, allowing them to bill at higher rates.
Most patients, even when they choose an in-network emergency room, are not in a position to find out whether the physicians caring for them are in or out of network.
“And whenever you have an information asymmetry like this, it’s really ripe for activities that would substantially increase the profits of the provider,” says David Slusky, a health care economist at the University of Kansas.
Slusky compares the situation faced by patients to the pricey bill at a fancy restaurant.
“On the one hand,” he says, “you could say that at the end of a very nice meal at a very nice restaurant, the bill does look very large. But you did actually eat the meal, and the meal cost money to make.
“On the other hand, you could say that at some point, the price, which is not disclosed ahead of time, becomes predatory and shouldn’t be allowed in our society. I’m not sure where that point is. I think we as a country aren’t really sure of that yet.”
EmCare provides staffing and management services at numerous hospitals in Missouri and Kansas. They include Centerpoint Medical Center of Independence, Liberty Hospital, Research Medical Center, Menorah Medical Center and Overland Park Regional Medical Center.
McCaskill’s letter alludes to litigation in which EmCare has been accused of pressuring ER doctors to order expensive tests and admissions that were not medically necessary and terminating personnel who objected to the practices.
McCaskill, the ranking Democrat on the Homeland Security and Governmental Committee, wants EmCare to disclose what percentage of emergency room care provided by EmCare physicians were billed as out-of-network charges. She also wants it to disclose how many complaints EmCare or Envision has received regarding cost or care over the last five years.
“Emergency room visits can be far too expensive already — and if EmCare is gaming the system just to up their profits, that needs to be thoroughly investigated,” McCaskill said in a statement. “I’m committed to protecting patients in Missouri and across the country by getting to the bottom of what’s going on with EmCare’s billing.”
EmCare did not immediately respond to a request for comment on McCaskill’s letter.
Envision Healthcare, EmCare’s parent, is a publicly traded company with $3.7 billion in revenues in 2016.
Dan Margolies is KCUR’s health editor. You can reach him on Twitter @DanMargolies.