I don't understand how this can't be standard operating procedure at an ER. Abdominal pain? Immediately go through a list of questions to determine whether it's an emergency or not. This is just as much in the interest of the hospital, which wants to keep the ER open for life-threatening emergencies, as it is for payors, as it is for patients.

Unfortunately, it doesn't seem like a hospital has had an incentive to do that in the past. They make less money by charging urgent care rates instead of emergency rates. They also have shifted liability onto themselves. When they get it wrong and tell someone to go to urgent care instead of the ER and the patient gets sicker or dies they now face increased risk of a lawsuit.

The health insurer in this case is actually changing the incentives for the better. Now the hospital risks not getting paid because they didn't triage up front. Unfortunately the patient is caught in the middle here and doesn't have any good option until a less expensive triage option is developed. Hopefully hospitals will respond to insurers denying ER visits to improve their triage as you've suggested.

While I think this is a good idea, I don't believe it would have worked in this case as the patient was highly symptomatic of a ruptured appendix and should have received Emergency Room attention none-the-less.