A lawsuit against HHS from the American College of Emergency Physicians (ACEP) claims the current regulations allow for insurers to underpay for emergency services when the hospital is out-of-network.

ACEP’s issues lie with the HHS rule on calculating how much of the cost for out-of-network emergency services are the insurer’s responsibility. The November 2015 final version of the rule stated the insurer must pay the greatest of three costs: the insurer’s in-network amount, the Medicare amount or the “usual, customary and reasonable (UCR)” amount.

“In almost all instances, the highest of these three amounts will be the UCR amount," the complaint said. "However, insurers have historically understated and prevented public verification of the UCR amounts."

ACEP’s complaint, which also includes the Departments of Labor and the Treasury, said it asked for a requirement in the rule for the UCR amount to be “transparent, verifiable data,” but HHS dismissed those concerns.

“The stakes are extremely high for the nation’s emergency physicians, including ACEP’s members, and the patients that they serve,” the complaint said. “As it stands now, the departments have ensured that ACEP’s members will be underpaid for out-of-network emergency services because insurers have proven by their past behavior that they will manipulate UCR amounts downward if given the chance.”

As its prime example of UCR manipulation, the complaint cited a 2009 investigation by the New York Attorney Genera into Ingenix, a subsidiary of UnitedHealth, which kept a database of UCR amounts to set out-of-network payments. The attorney general’s office concluded the company “intentionally skewed” rates, resulting in underpayments of 10 to 28 percent in the state.

ACEP’s lawsuit argued HHS failed to address these concerns or to craft a rule that set an objective standard for reasonable payments, so the court should invalidate the regulation, along with awarding an unspecified amount of damages to ACEP.