CT hospital’s ‘trauma fees’ under state scrutiny [Hearst]

Article as it appeared in Hearst Media

Twelve Connecticut hospitals charge patients a trauma activation fee when they arrive by ambulance with a serious injury.

These fees, ranging in the thousands of dollars, are unregulated. And 11 of the 12 Connecticut trauma centers won’t reveal publicly how much they charge.

That will change in 2020. New legislation will require Connecticut hospitals to disclose to the state Office of Health Strategy next year the amounts they assess for trauma activation fees.

The legislation was part of a bipartisan package of consumer protections aimed at curbing heath care costs that was folded into the state budget this spring. The package also included prohibiting the surprise billing of laboratory fees, establishing a “prudent person standard” for insurance coverage of emergency department visits and convening a task force to study high-deductible health plans. By shining a spotlight on the costs of heath care, Democrats and Republicans hope they can lower the price tag.

“You’ve got to look at the drivers and determine how we can control those,” said Senate Republican Leader Len Fasano, R-North Haven.

To do so, lawmakers have been honing in on items like prescription drugs, laboratory services, and now, trauma activation fees.

Trauma fees

A trauma fee is charged when a trauma team is called to attend to a patient with significant or life-threatening injuries who is brought to the hospital by emergency medical services. Only designated trauma centers can use the billing code 068x to charge a trauma activation fee.

These fees are set by the hospitals and can range based on the level of response a patient requires. They help hospitals recoup the costs of having highly trained doctors and specialized nurses on call to respond to tragedies at a moment’s notice. Insurance sometimes covers the fees so not all patients may notice them buried in their hospital bill — if they have health insurance.

But Senate President Pro Tempore Martin Looney, D-New Haven, believes hospitals can use these fees as an “arbitrary revenue generator.”

Hartford Hospital charges a trauma activation fee of $2,200, Jonathan Gates, director of the Trauma Center at Hartford Hospital, testified to the General Assembly in 2019. Gates described this fee as “very reasonable.”

The National Foundation for Trauma Care, the group that for the creation of the fee in 2002, told its members a conservative start for the fee was $3,500 to $5,000, a Tampa Bay Times investigation found.

But around the country, many hospitals are charging double, triple, even twelve times that amount. The Tampa Bay Times found in 2014 the average trauma activation fee in Florida was $10,000. It found a university medical center in California that charged $64,900. A 2018 investigation by Vox and Kaiser Health News found fees that ranged from about $1,000 to more than $50,000.

Hearst Connecticut Media contacted all 12 Connecticut trauma centers permitted to collect these fees. All of them referred Hearst to the Connecticut Hospital Association which declined to provide any details about what hospitals are charging patients now.

Connecticut has four hospitals designated as level I trauma centers, 7 that are level II and one level III. These levels refer to the resources available in the trauma center and the amount of patients admitted yearly — but its unclear if they have any correlation with the amount charged for trauma fees.

“Hospitals will be providing trauma activation fee information to the state early next year, as the legislation directs,” said Michele Sharp, vice president of Communications for CHA. “To prepare for that filing, the Connecticut Hospital Association is having conversations with the state; we need to determine the specific information that will be provided to ensure that it is useful and consistent across hospitals. Once we have had these conversations, hospitals will be better able to fulfill your request.”

Fasano and Looney said they have no idea how much Connecticut hospitals are charging. They want to understand the rational for the rates and when they are assessed. Vox found that Zuckerberg San Francisco General Hospital charged a couple a $15,666 trauma fee after finding their infant had no head trauma and providing the child some baby formula.

“We’ve come to believe that sometimes regardless of the severity of the injury, trauma fees are tacked on the visit,” said Fasano. “You come in with a broken arm, does that initiate trauma fees? Or is it a heart issue?”

Yale New Haven Hospital testified to the General Assembly that 2,000 of its adult patients and 240 pediatric patients were eligible to have a trauma fee assessed in 2018.

Ted Doolittle, the state’s Healthcare Advocate, said his office is periodically contacted about trauma fees, but does not collect data on their rates or use.

The reporting of trauma fees to the state is a potential first step toward regulation, said Looney.

“That might result in additional legislation,” Looney said.

That is sure to generate massive pushback from Connecticut hospitals. Looney orginally proposed legislation in 2019 to eliminate trauma activation fees. Almost all the trauma centers filed testimony strongly opposing this.

“The elimination of these fees would directly jeopardize our ability to maintain our trauma program for the community and provide critical care,” said Kathleen Silard, president and CEO of Stamford Hospital, in written testimony. “These fees are a matter of life and death for our patients.”

Unwelcome surprises

Among the other health-care provisions in the budget is establishment of a “prudent person standard” for insurance coverage of emergency department visits.

Sometimes people go to the emergency room thinking they are having a serious health emergency when they aren’t. Some health insurers, including Anthem, may not cover an emergency room visit if a patient is found not to be having a health emergency and could have sought treatment at a doctor’s office, according to a Doctor Patients Rights Project study.

“Basically they’re saying have a real heart attack and we’ll cover it for you,” Looney said.

When Anthem announced their new policy on ER visits, the Connecticut Attorney General’s Office and Office of the Healthcare Advocate met with the insurer about it.

“Then, they backed off here and in other states,” said Doolittle. But since that time, a few cases of retroactive ER denials have cropped up in the healthcare advocate’s caseload from multiple insurers, Doolittle added.

“People should not be using the ER as a doctor’s office, that is very true,” Doolittle said. “You need to strike a balance here. But too many cases were on the wrong side of what people think is fair.”

Through the budget, state lawmakers passed legislation establishing a “prudent layperson standard” — in other words, if a person reasonably believes they are having a health emergency, like a heart attack, insurers cannot retroactively deny coverage, even if doctors find a person’s condition is not serious. The state law applies to all health insurance, whereas a similar federal law outlining the same standard applies only to Medicare and Medicaid managed plans.

Lawmakers also revised state law to shorten the amount of time insurers have to provide a denial to urgent care requests from 72 to 48 hours, except on weekends. The budget also now bans discretionary clauses in disability insurance contracts. These clauses allow the insurer to determine if a person is “disabled,” and then the insurer must pay them accordingly.

“It’s really an unfair way of giving insurers the upper hand in contract disputes,” Looney said.

Also through the budget, lawmakers added laboratory services to a list of health care services that insurers must treat as in-network if a doctor refers a patient to an out-of-network service without their knowledge. One in every six emergency room visits and hospital stays had at least one out-of-network charge in 2017, a recent Kaiser Family Foundation study found.

Lisa Freeman, executive director of the Connecticut Center for Patient Safety, said she once experienced “surprise billing” when her doctor sent her lab sample to California for analysis and charged her $200 for it.

“We’re trying to crack down on unneccesary medical costs,” said Sen. Kevin Kelly, R-Stratford, ranking member on the Insurance Committee. “It’s a bonafide problem.”

Finally, lawmakers also established a 12-person taskforce to study high-deductible health plans and their impact on Connecticut families.

Bipartisan breakdown

Lawmakers added these measures, which were overwhelmingly approved by the Senate, to the state budget “rather than wait to have them sniped at in the House by the insurance industry,” Looney said. At the time, days before the end of the legislative session in June, health insurers were already flexing signicant muscle at the Capitol to sink proposed “public option” legislation.

These provisions were produced by bipartisan cooperation by Looney and Fasano, who had worked on such health reforms together for several years. In interviews, Fasano and Kelly both sought to distinguish Connecticut Republicans from Republicans in Washington, D.C., whom Fasano called “those knuckleheads.” They highlighted how they backed adding 10 health care benefits of the Affordable Care Act into state law. The Affordable Care Act was challenged by Republican governors and attorneys general in federal court and the case is now under appeal in Texas.

Connecticut Democrat and Republican lawmakers also agreed on several other pieces of health care legislation that failed to pass the General Assembly, such as a measure to allow the state to seek federal authorization to reimport prescription drugs from Canada and a plan to establish a Cost Containment Commission requiring the justification of some health care prices, like Massachusetts has.

Kelly called reimportation a “good idea” and said he “basically support[s]” the commission.

Democrats and Republicans also both liked the idea of using reinsurance to lower the cost of health insurance premiums for Connecticut residents — one of Kelly’s ideas. But reinsurance must be purchased and the parties split on how to pay for it, with Republicans wanting to find the $19 million in the state budget and Democrats preferring charging a fee to insurers to pay for it.

The real partisan conflict came over the meat of the “Connecticut Option,” which met an unsual demise at the end of the legislative session.

Kelly and Fasano recently published an op-ed saying the Connecticut Option “would only guarantee instability and move Connecticut closer to socialized medicine.”

Kelly said the Connecticut Option was not an insurance product, but would establish a government program to pay for medical bills that would be bailed out by taxpayer dollars if it ran a deficit. He said it would not be regulated by the Department of Insurance.

Sen. Matt Lesser, D-Middletown, chair of the Insurance Committee and an architect of the bill, said the Connecticut Option would allow the state to set parameters for health plans that could be offered by multiple private insurers on the exchange and allow state Comptroller Kevin Lembo to issue a request for proposals for one or more insurers to offer a plan on behalf of the state. The plans would be regulated by the Insurance Department and would not be backstopped by tax dollars.

“I’m not aware of any exposure to the state,” he said.

This debate will continue as Democrats, including Gov. Ned Lamont, have promised to revive the Connecticut Option next year.