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Prudent Layperson Standard

Main Points

  • Patients should not be forced to diagnose themselves. It’s dangerous.
  • Health insurance companies have a long history of devaluing emergency patients and using scare tactics to prevent people from seeking emergency care.
  • Anthem-Blue Cross Blue Shield’s policy warning its beneficiaries not to seek emergency care unless it’s an emergency violates the prudent layperson standard.
  • Insurance companies and employers are shifting health care costs onto patients and medical providers.
  • Patients are experiencing negative consequences because they are delaying emergency care out of fear of costs. 
  • The prudent layperson standard, which is currently included in federal law, must remain in any health care legislation that replaces the Affordable Care Act.

What is the Prudent Layperson Standard?

The Prudent Layperson Standard says that emergency patients who are seeking emergency care because they believe they are having medical emergencies will have those visits covered by insurance, regardless of their final diagnosis. It requires insurance coverage based on symptoms, not final diagnosis.

ACEP fought hard at both the national and state level for many years for legislation aimed at protecting emergency patients from retroactive denials of insurance coverage for emergency department visits for conditions that turned out not to be emergencies.  It also eliminated requirements for prior authorization before seeking emergency care.

In 1997, Congress enacted the Prudent Layperson Standard Medicare and Medicaid managed care plans.  The prudent layperson standard was extended to all federal employees in 1999.

Forty-seven states (all except for Mississippi, New Hampshire, and Wyoming) have codified the prudent layperson into state laws (with variations).

The Affordable Care Act also included language upholding the Prudent Layperson Standard.

Now that the Prudent Layperson Standard is law, are patients protected?

In 2017, insurers began warning patients in Georgia, Missouri, Kentucky and Virginia that if their ER visit ends with a diagnosis for something that isn’t an emergency, that visit will not be covered by insurance. 

Health insurance companies for years denied claims based on final diagnoses instead of symptoms. In other words, if chest pain brought you to the emergency department, but turned out to be indigestion, the insurance company wouldn’t pay. Emergency physicians successfully fought back against these policies but insurers are back to their old tricks again.

Why is the Prudent Layperson Standard so important?

Patients cannot be expected to know the difference between a symptom that is life-threatening and one that isn’t. There is a nearly 90 percent overlap in symptoms between emergencies and non-emergencies[i], and emergency physicians themselves often can’t tell what the diagnosis will be without running a patient through a full work-up.

Patients who are afraid their ER visit will not be covered by insurance will be more likely to delay care, which is very risky.  Nearly one in four Americans (registered voters) reported their medical conditions got worse because they didn’t go to the emergency department out of fear their health insurance companies wouldn’t cover the costs (Morning Consult 2016).[ii] 

Most patients lack the training to determine, for example, the difference between abdominal pain that is life-threatening and abdominal pain that isn’t. The decision to “ride it out” instead of seeking emergency care could lead to lifelong disability or even death.

What can patients do about this?

Everyone needs to find out what their health insurance policy covers and demand fair and reasonable coverage for emergency care.  Contact your state and federal legislators and demand that they ensure that the prudent layperson standard will not be violated.  Health plans must provide fair payment for emergency services or emergency patients will suffer.  

[ii] Morning Consult conducted a survey of 2,016 registered voters on September 8-10, 2016, on behalf of the American College of Emergency Physicians, using 2016 scientifically selected registered voters. There is a margin of error of ± 2 percent.