From: Tom Hurley

To: E-OHPSCA1251.EBSA

Subject: Comment on Proposed Regulation pertaining to out of network emergency care

Date: Thursday, July 15, 2010 11:36:01 AM

As an attorney with a large preferred provider organization, I read with interest Section

54.9815-2719AT(b ) of the proposed regs. This section requires non-grandfathered plans to pay

for out of network emergency care furnished to their covered persons in an amount equal to the

highest of 3 alternative amounts calculated in the manner described in the regulation. One of

these alternative amounts is the median amount that a plan would pay for the same care if such

care was furnished by any in-network provider. In many instances plans will not be able to

calculate these median amounts.

Many provider networks do not negotiate with providers to obtain firm prices for particular care

(e.g., $450 to set a particular broken bone) but rather a discount expressed as a percentage of the

rate set forth in the provider's chargemaster (e.g., 70% of chargemaster rate, or chargemaster rate

less 30% discount). When the network reprices an in-network provider's claim, it takes the dollar

amounts set forth in the provider's bill as representing the chargemaster rates for the procedures

identified in the claim, and applies its negotiated discounts in order to determine the dollar

amount of the re-priced claim. Note that the network does not have the chargemaster of each

network provider in a database.

When emergency care is furnished by an out of network provider, networks that (1) have provider

participation agreements of the kind described above, and (2) do not maintain a database

containing each provider's chargemaster will have no way to determine how much any one

network provider would charge (much less the median of the amounts all network providers

would charge) for the emergency care given by the out of network provider because the innetwork provider has not sent a bill containing the relevant "rack rates" from the provider's

chargemaster for the care furnished.

When I discovered this problem, I spoke with our senior hospital relations manager. He believes

that many network providers will be extremely resistant to turning over a complete chargemaster,

or even the portion of it dealing with emergency services. And we have about 400 hospitals in our

provider network. If even one of these refuses to turnover chargemaster information, we will be

unable to furnish our plan clients with truly accurate median amounts for any particular claim.

Unless providers are legally compelled to do so, far more than 1 of our 400 hospitals can be

expected to refuse our request to turnover chargemaster data.

By the way, even if hospitals can be compelled to provide chargemaster data, calculating the

median for a particular claim will be very costly. With our 400 hospital network, we (or a plan

client remotely accessing our repricing system) would have to do a hypothetical repricing of the

claim 400 times. When a particular claim needs to be manually repriced, this could become

inordinately time consuming and expensive. This will add significantly to the administrative

component of total healthcare costs.

Regrettably, I am unable to propose to you any particular solution, only to present to you the very

real, very significant problem.

Thomas F. Hurley