Groups representing community hospitals and physicians have asked a 19th Judicial District Court to set aside an Insurance Department rule that forces health care providers to accept lower payments for emergency treatments of Hurricane Isaac evacuees.
The Louisiana Hospital Association and the Louisiana State Medical Society say Insurance Commissioner Jim Donelon doesn’t have the authority to create a new law.
Donelon’s emergency rule sets “a dangerous precedent,” one that clearly exceeds his authority as commissioner of insurance, said Greg Waddell, the Medical Society’s director of legal affairs.
“What’s it going to be next time if he can basically take the place of the Legislature?” Waddell said.
However, Donelon said the current rule is almost a mirror image of emergency rules issued after hurricanes Katrina and Rita in 2005 and Gustav in 2008.
The major difference in the current rule is that it treats emergency health care providers more generously, he said. Under the earlier rules, if a patient didn’t pay, the insurance company and provider split the loss 50-50.
The current rule uses the payment schedules set by the federal Affordable Care Act, he said.
“I truly believe this is all about getting the courts to declare that I can’t do this going forward, and they picked this opportunity because it’s the smallest of the four storms and has the likelihood of the least political pushback from the affected legislators,” Donelon said.
Disallowing the rule would leave hurricane evacuees “very, very exposed” to huge emergency room fees, Donelon said. It would be like pouring salt in the wounds of hurricane victims.
Part of the emergency rule, which covers Aug. 26 to Sept. 25, affects people with health insurance who were displaced by the storm.
Those policyholders have access to the same coverage for emergency treatment, even if they have to go to a physician or hospital that isn’t in their health network, the rule says.
It also prohibits providers from billing the patient for the portion of the bill that isn’t covered by in-network payments.
Waddell said the Medical Society does not know how much money the rule could cost physicians, but it could be a significant amount.
In effect, the rule allows insurance companies to set the payment amount, the Hospital Association and Medical Society say in their court filing.
The emergency rule impairs and in some cases negates the contracts that providers have already negotiated with health insurance companies.