Emergency stabilization for a wounded COBRA.

• Author: Rosenstein, Daniel N.

Among the many problems in the realm of health care, few are as acute as the plight of the uninsured. Even when these individuals reach the doors of hospital emergency rooms, the lack of health insurance or of adequate health insurance results in the abrupt closing of those doors. Rectifying this problem has been, and continues to be, one of the great health care challenges facing the United States in this quarter of the twentieth century.(1)

In an attempt to resolve this dilemma, the federal government instituted various programs aimed at increasing access to health care, especially for those persons most likely to be under- or uninsured.(2) For reasons ranging from the dramatic increase in the cost of health care to spiraling unemployment to the aging of the population, these policies are, to date, of limited and decreasing value.

Congress, in an effort to rectify one aspect of the nation's health care crisis, passed legislation aimed at curbing the phenomenon known as patient-dumping.(3) In 1986, Congress enacted anti-dumping provisions as part of the Consolidated Omnibus Budget Reconciliation Act (COBRA).4 Patient-dumping, also known as "demarketing of services" or "management of patient mix,"(5) occurs when a hospital capable of providing appropriate care transfers or turns away, rather than treats, a person who arrives at a hospital's emergency department or with an emergency medical condition. It usually occurs because the incoming patient is indigent, lacking either adequate health insurance or the ability to pay for treatment.(6) Thus, private hospitals shift the burden of caring for these individuals to public hospitals,(7) which are not at liberty to ignore charity cases. Although hospital reluctance to treat indigents was the impetus to COBRA, the statute's scope is broad and applies equally to all persons, whether insured or uninsured(8)

This article demonstrates that, despite Congress's laudable efforts at ameliorating the dumping dilemma, COBRA has serious flaws which hamper both its implementation and effectiveness. The article sheds light on and suggests remedies for four basic flaws in COBRA's statutory scheme: (1) COBRA applies only in the limited instances of an emergency medical condition;(9) (2) the absence of clear and workable statutory definitions hinders the effective interpretation and implementation of the statute;(10) (3) the statute permits "appropriate" transfers,(11) enabling a hospital to dump an indigent patient upon compliance with certain prerequisite conditions; and (4) the statute fails to authorize reimbursement of hospitals for the expenses incurred in the treatment of under- or uninsured persons.(12) Unless these inadequacies are addressed, COBRA has no chance of fulfilling congressional expectations.

The Duty to Provide Health Care and the Federal Response

Emergency Treatment and Other Health Care at Common Law

An underlying factor in the patient-dumping crisis is the absence of a common law duty for hospitals to accept and care for all persons who present themselves for treatment.(13) Some courts, however, have carved exceptions, creating a duty on the part of the hospital under certain emergency circumstances,(14) such as imposing liability for the refusal to treat a person with an unmistakable emergency? Absent either judicial machinations or conduct by a hospital that creates an implied contract, hospitals generally are not required to render aid at all times or to all visitors.(16) In short, and at the heart of the matter, health care simply is not a fundamental or legal right,(17) and, absent a few exceptions,(18) the federal government has not created a national health care program that makes minimal health care and services for all citizens, including the indigent, a fundamental or legal right.

America's Health Care Woes

In 1946, as America returned to normalcy following World War II, the federal government turned its attention inward and began addressing concerns at home. In response to the "great need for additional hospital and health-center facilities,"(19) Congress enacted the Hospital Survey and Construction Act,(20) commonly known as Hill-Burton. Through Hill-Burton, Congress hoped to provide indigent persons with access to health care(21) by funding the construction of hospitals by the several states.(22) In exchange for federal funds, a Hill-Burton hospital agreed to provide (1) services to the persons living in that hospital's territory(23) and (2) free or below-cost care, for a period of twenty years, to those patients unable to pay.(24) Congress expected that Hill-Burton would guarantee that needy persons residing within a Hill-Burton hospital zone would receive emergency medical treatment without the fear of refusal or improper discharge.(25)

However, Hill-Burton fell short of meeting these lofty congressional expectations. Absence of a punitive damages provision, incomplete or ambiguous statutory definitions, lack of hospital incentives, the failure of state administrators to supervise Hill-Burton's administration, and patient ignorance about the entitlements provided by Hill-Burton combined to undermine the statute's effectiveness.(26) Furthermore, the failure of the Department of Health and Human Services (HHS) to enforce Hill-Burton magnified these shortcomings.(27)

Hill-Burton was not the federal government's only attempt to insure access to adequate health care. Medicare,(28) created in 1965 as part of Lyndon Johnson's Great Society, represented the next major federal initiative in the areas of health treatment and health care delivery for those most in need--poor persons and older persons.(29) Although Medicare's inadequacies alone did not cause and do not explain the current problem with patient-dumping, certain changes in Medicare's payment structure detrimentally affected that program.

When originally enacted, Medicare hospitals were funded through a cost-based reimbursement plan, which compensated hospitals for the cost of the care or treatment provided.(30) However, rising inflation and an increase in the number of nonpaying patients seen by many hospitals made the cost-based reimbursement system too costly.(31) In response, Congress shifted the financing structure of Medicare to a prospective payment system.(32)

Under this new system, each patient was placed in a diagnostic related group(33) (DRG) and the hospital received an advance payment based on the patient's DRG classification.(34) Instead of maximizing efficiency, the new DRG system encouraged hospitals, which are entitled to keep all unspent Medicare funds, to earn profits by cutting corners when providing reimbursable treatment. The fewer charity cases accepted by a hospital, the greater the hospital's profits because it could retain a larger portion of the DRG prospective payment(35) By contrast, if a patient's care cost more than the DRG allotment, the hospital bore the burden of excess.(36) As a result of this restructuring, hospital willingness to accept indigent patients decreased, and patient-dumping increased.(37)

The Medicaid program,(38) also a product of the 89th Congress, likewise suffered in the last decade. Medicaid, which utilizes federal and state funds to provide health care for the poor,(39) was victimized by state budget slashing and cost-cutting reorganization.(40) Efforts to reduce federal spending contributed to the Medicaid crisis as well.(41) Due to these cutbacks, Medicaid covered only 40% of the poor in 1985, as compared to 70% twenty years earlier(42) As a result, approximately thirty-six million Americans now have no form of health insurance;(43) many of these are under the age of eighteen.(44)

These changes and reductions in the Medicare and Medicaid insurance programs are underlying causes of the primary factor responsible for the current patient-dumping crisis: the epidemic proportion of the number of Americans without health insurance.(45) Hospitals have borne the brunt of this insurance catastrophe and spent billions to treat those in dire financial condition.(46)

The uninsured are not the only persons at the mercy of the health care system. The underinsured, those who have some but not enough health insurance, often find themselves unable to obtain or pay for necessary medical treatment.(47) In short, the state of American health care is such that roughly one in every four Americans is either uninsured or underinsured,(48) and thus a target of patient-dumping.

Rather than refining the Medicare and Medicaid systems or otherwise improving access to subsidized health care by making more funds available to either those in need or the hospitals that provide indigent care, Congress, as is its wont, reacted to the growing problem of patient-dumping by enacting new, and more cumbersome, legislation--legislation that, in the long run, is likely to be as ineffectual, poorly administered, and shortsighted as its precursors.

COBRA: Congress Responds to Dumping

42 U.S.C. [SECTION] 1395dd Emergency Medical Treatment and Active Labor Act

Enacted as part of the Consolidated Omnibus Budget Reconciliation Act of 1986, section 1395dd(49) of title 42 was designed to regulate, not prevent, hospital transfers of patients who either present themselves at hospital emergency rooms or arrive at hospitals with emergency conditions. In this regard, while the impetus behind COBRA was the plight of the under- or uninsured, who were often refused treatment in emergency rooms, the statute's regulations and sanctions are not limited to indigents(50) Furthermore, despite pretenses that the statute's purpose is the prevention of unwarranted and improper transfer of emergency patients, transfers effectuated within COBRA's guidelines remain permissible.(51)

Determining whether the statute applies requires a three-pronged analysis; the criteria of any prong can result in the applicability of COBRA.(52) First, under section 1395rid(a), any hospital with an emergency...