It can be difficult for small physician groups to take on large insurance companies over payment and contract issues even if the law is on the physicians’ side. Lawsuits are often long and expensive, with no guarantee of success, and individual physicians or small groups frequently lack the resources to pursue costly court cases.
California’s emergency physicians have an ally in the fight for fair reimbursement: the physician-lawyer duo of Irv Edwards, MD, FACEP, and Andrew Selesnick, JD. The pair have been advocating for fair and proper payments for emergency physicians for about 20 years. They recently celebrated a victory in a case argued before the Supreme Court of California that could make it easier for physicians to collect fees they are owed by independent practice associations (IPAs).
Dr. Edwards is a board-certified residency-trained emergency physician who established southern California-based Emergent Medical Associates 25 years ago and is currently its president. Mr. Selesnick was a partner in the firm Michelman & Robinson and head of the firm’s health care department during the Supreme Court of California case. He recently joined Buchalter, a law firm based in Los Angeles.
They both recently sat down with ACEP Now Medical Editor in Chief Kevin Klauer, DO, EJD, FACEP, to discuss their recent court win and their long-term mission of fighting for fair compensation for emergency medicine services.
KK: You two have had a long history of supporting emergency physicians and pursuing emergency physician reimbursement when things have been unfair. Can you give us a sense of the history of what you have done and those you’ve pursued over the years?
IE: I was the president of California ACEP, and much of my desire to see the tables of justice set properly occurred when I met with the president of Health Net many years ago while seeking a contract that would be statewide that set fair reimbursement rights. He honestly said to me in his condescending way, “Son, ‘fair’ isn’t part of our negotiating strategy.” Andy, at that point, became my partner. We spent a lot of time looking at laws in the state of California, and it wasn’t really very hard to figure out, in many regards, how the rights of emergency physicians were being trampled. People were almost daring you to say, “you can sue us, but we’re not going to pay you what the law says.” I do think that it is somewhat difficult for smaller independent groups to pursue such litigation because, in many regards, it is undoubtedly expensive. Certainly, the cost of pursuing legal recourse can be greater than the economic recovery. That’s what the health plans bank on.
KK: Is it fair to say that the barriers to litigation have allowed for commercial payers to take advantage of emergency physicians and other providers?
IE: Perfectly well said.
KK: How many times have you decided to file suit against a commercial payer regarding physician reimbursement?
AS: We have filed suit dozens of times, including against every major payer. Emergency physicians need to understand the health plans take up to a 10-, 20-, or 30-year outlook on their business and emergency physician groups, especially those that are independent, probably take a weekly or a monthly view. In California, for example, if you had most of the groups who were out of network and they all decided to sue Anthem, it would be very hard for Anthem to counter. Their business model is predicated upon only a certain amount of people doing it even though many others can.
KK: In rough numbers of the suits that you have filed, how often have you been successful?
AS: I think on behalf of Irv’s groups, we have always recovered money.
KK: I wouldn’t have guessed that. You’re saying that if you decide to challenge them and you pick and choose your battles appropriately, you are going to recover something in every case.
AS: I use the stock market phrase, “Past performance is not a predictor of future performance.” The reality is that if you analyze these cases appropriately, you can do it. If you litigate and enter into a contract and that contract means that they are not down-coding any more, they are going to pay you a set rate that is higher than they were reimbursing you before. When you look at your whole business model and you are taking a multiyear view, those numbers quickly add up and are substantially more. In the vast majority of cases, we recover well in excess of the fees that are incurred.
KK: Let’s talk about this most recent win. Tell us about the background of the issues that led you to file suit in this particular case.
AS: There has been a problem in managed care with IPAs going out of business or IPAs being underfunded in the managed care model. That’s been a consistent problem for decades. Irv and I have had multiple discussions over the years about what to do with this problem because it costs his group and other emergency physicians a lot of money. There was a group in South Bay called La Vida, headed by a physician named Dr. Chidi. He had a lot of problems with his IPA; it was upside down. The health plans and the government regulators knew about it, but they really didn’t do anything for years. So, for years, emergency physicians like Irv’s group were not being paid appropriately. One day, the IPA went out of business. They didn’t declare bankruptcy; they just literally turned off the lights and left. As the head of the group, Dr. Chidi said, under oath and deposition, they didn’t even have enough money to buy a stamp. Irv’s group was owed a lot of money because they were out of network with the IPA, and they were out of network with the health plans that were supporting the IPA. We felt like this would be a good cause where we could hold the plans to their obligations to reimburse for emergency services they were advertising for. They should pay for it. So we filed a case in the trial court, and we lost immediately because health plans are allowed to delegate their responsibilities. The health plans took the position that they can delegate to whomever they want even though we had no choice in it at all. They can just delegate it, and it would be fine. Once they delegated it, they were done. We like to use the example of they could’ve delegated it to Joe’s IPA. Joe could have gone to the south of France, and emergency physicians wouldn’t get paid.
IE: The health plans’ excuse was, “We’ve paid for it once, and in order for you to collect, you would be asking us to pay a second time, and that’s kind of double jeopardy.”
KK: In an analogy, taking the plan’s position, if I decided to subrogate my utility bills to a third party and the third party went out of business, I wouldn’t have to pay my bills anymore. Isn’t that basically what they did?
IE and AS: Yes.
IE: We wrote a series of certified letters to each health plan, both to the CEOs and to the general counsel, alerting them to the fact that we were not being paid, that we had a significant financial shortfall, that level fives that were intubated were being down-coded to level ones, that we were underpaid on many claims, and that we had delays in payments. They wrote back, “Thank you for telling us. We forwarded your letter and your complaint to the plan for processing.” Nothing ever changed, but there was clearly proof that they knew of the abuses and that really the ER doctors were being victimized. We met with Gary Baldwin at the Department of Managed Health Care (DMHC) to complain about them, then spent a day, got on an airplane, and went up to the capitol to talk to them. They took it seriously, but their ultimate decision was La Vida was in trouble. Rather than order the health plans to pay ER claims directly—they felt that would make La Vida more insolvent—they actually worked out an arrangement to pay them additional money, but I don’t believe that they ever monitored that the money flowed to us. So DMHC took the opposite tactic and paid the requested health plan’s increased reimbursement to this troubled IPA, but still not a single increase for emergency physicians occurred.
AS: Along the way, in addition to Irv and his group carrying the torch, California ACEP and the California Medical Association got involved in supporting the cause all the way up through the Supreme Court to show that the house of medicine was in favor of holding the health plans responsible. What was really gratifying, especially for Irv, was in the Supreme Court’s decision. They found the health plan’s conduct morally blameworthy. You don’t get to delegate, walk away, and leave everybody else holding the bag. The Supreme Court was unanimous. Maybe I’m being overly dramatic, but I think lives will be saved because there will be sufficient funds to make sure that appropriate access to care is maintained for patients in need of emergency care.
KK: I wouldn’t expect you to have the exact amount, but have you quantified the compensation that was withheld based on this over a period of time?
AS: When you count all the specialists and everyone else, it is going to be millions and millions of dollars in uncompensated care, and you know that makes a difference over time.
KK: Andy, would you summarize in one or two sentences your feelings about Irv’s contribution to the health care delivery system in California?
AS: Irv is a visionary when it comes to the understanding of health care economics and the importance of being reimbursed properly for lifesaving services. He has put real dollars, real money behind it, and I think the result is that the safety net in California is much stronger. Physicians may not realize it, but I think he has made a real difference in their reimbursement and therefore in the staffing and the lives of not only the physicians and the hospitals but the patients, too.