What is a Prudent Lay Person?


A Prudent Lay Person (or Layperson, abbreviated PLP) is a standard for deciding if an Emergency Room visit is necessary and presenting condition(s) of the patient reasonably warrant immediate attention.

The standard defines an emergency as a condition that a prudent lay person, “who possesses an average knowledge of health and medicine” expects, may result in:

1. Serious medical harm, or:

2. Serious impairment of bodily function, or:

3: Serious dysfunction of any bodily organ.

Prudent Layperson standard laws were “spurred by incidents of patients with genuine acute illness who delayed care for fear of being stuck with the hospital bill, said John C. Nelson, MD, president-elect of the American Medical Association.” (Amednews.com)



In some states like Oregon, there is a profession called the Prudent Lay Reviewer or Prudent Person, created for the evaluation of Emergency Room claims based on the PLP standard. It is a health insurance occupation.

The Prudent Lay reviewer “possesses an average knowledge of health and medicine” fulfilling the Prudent Layperson standard (McGraw-Hill Concise Dictionary of Modern Medicine, 2002). Their average knowledge helps them to apply the Prudent Lay Standard to ER claims payment decisions.

The prudent lay profession is uncommon. Certain state(s) employ the prudent lay professional, but many still don’t.
No prudent layperson profession in some states.

Typically Emergency Room claims payment is based on a pairing of CPT codes (99281, 99282, 99283, 99284, 99285) and the Diagnosis code for the ER visit, using partially or fully automated adjudication software. These systems may not perform a comprehensive review of the ER claim based on the Prudent Lay standard, so claims over-payment results due to upcoding and mistakes on the part of the claim-submitting provider.


What does a Prudent Lay Person do?

A Prudent Lay Person (or ‘Prudent Lay Reviewer’) looks over Emergency Department chart notes to determine whether the emergency room visit was a “true medical emergency” requiring full reimbursement by the health insurance company. In almost all cases, the ER claim will be paid some amount.

The PLP reviewer can issue a lesser payment to a health care provider, such as a hospital or ER clinic, if the ER visit was not a true medical emergency (a mild “cough”, a “general health checkup”).

A greater amount can be issued based on the PLP reviewer’s decision, if it is indeed a true medical emergency warranting immediate attention in the Emergency Department (“motor vehicle accident”, “shortness of breath”, “chest pain”, “sudden allergic reaction”).

It is a profession which requires case by case evaluation of ER claims based on documentation of the Emergency Room visit. The documentation provided is used by the reviewer to make a determination on the amount paid on each ER claim.

About payment of ER claims: Health insurance companies are required to pay all ER claims. But in certain states, there is a lesser amount called Pay Triage, or some variation of the term, meaning, “the lesser amount”. This lesser amount may be paid by health insurance companies. There may be different rules in your state.

You can learn more about the term ‘Triage’ here: History of Triage on Wikipedia


How ER Claims are Reviewed by a Prudent Layperson Reviewer

The one element that weighs most heavily on a PLP reviewer’s decision is 1) documentation and 2) the perceived severity of the initial condition from the standpoint of the patient.

Last, the Prudent Layperson reviewer will often ask “Would I, possessing an average knowledge of health and medicine, go into the Emergency Room for this condition?”, in order to make a final ER claims payment decision.


Prudent Lay Review Decisions are based primarily on:

1) Chart notes: The most critical element in a prudent lay review decision is the detailed description of the Emergency Room event found in the History of Present Illness note, a standard description of prior conditions and the patient’s reason(s) for going to the Emergency Room. The initial presenting symptoms are the most important detail weighed by the PL reviewer within the HPI.

2) The initial symptoms and the patient’s perception of the severity of the emergency room visit, as well as their charted behavior.

3) The Prudent Layperson Reviewer’s own best judgement: “Would I, possessing an average knowledge of health and medicine, go into the Emergency Room for this condition?”

Note: Health insurance companies may employ different review structures, however, if the Prudent Lay standard is being used as the template for ER claims reviews, then initial presenting symptoms will be the primary element used on a claims payment determination, wherever the PLP reviewer positions exist.


What kind of decisions do Prudent Layperson Reviewers make?

Full payment of an Emergency Room claim
Partial or Lesser payment of an Emergency Room claim *
Request for additional chart notes from the provider on an Emergency Room claim
Denial of an Emergency Room claim for not meeting one or a set of state requirements, such as timely filing of claim *
* Different state rules: Not all states have the same guidelines and rules.


Why is the Prudent Lay Person Profession necessary?

In certain states, a health insurance company may employ a Prudent Layperson reviewer in order to review the medical necessity of ER visits and issue appropriate payment of ER claims, based on the PLP standard set by State and Federal government, as defined earlier in this article.

Do all states have a Prudent Layperson Reviewer Profession?
No. However, the Prudent Layperson standard itself is widespread and growing in popularity.

In states where the Prudent Lay Person standard is in effect, Emergency Room claims may be reviewed case by case. But this is not always so with health insurance companies.

You can learn all about Prudent Lay Person standard here on PrudentLay.


How do you become a Prudent Layperson?

To be a prudent person, you must possess an average knowledge and understanding of health and medicine. If you are in the medical profession, chances are you have an above average understanding and knowledge of health and medicine which makes you overqualified for a position such as this.

If you wish to apply for a Prudent Layperson position at a local health care company, you can look at websites like Monster.com or inquire on their hiring or contact page. For other positions, click here.

What happens when a Prudent Layperson exceeds average knowledge of health and medicine?
As soon as a person employed in the review of Emergency Room chart notes has exceeded the average understanding of health and medicine, it is time for them to change positions.

The purpose of the role is that the PLP exercise the same type of judgement (or at least close enough) to an average ER utilizer. When this individual no longer fits the definition, their decision making may become more lenient toward the symptoms, diagnoses, and hospital work-up as noted in the ER chart notes.

However, the PLP profession calls for an evaluation based not on diagnoses or the medical opinion of the physician, but on the initial presenting symptoms of the Emergency Room patient.


Does the Prudent Person Standard save the state money?

Think of this scenario:

Hospitals and clinics bill emergency room codes, called CPT codes 99281 through 99285. These codes are based on the severity of the visit, the 1 being the least urgent and the 5 being the most critical, near fatal event.

When a nurse, nurse practitioner, physician or even a medical assistant writes up the chart notes, they may inadvertently over emphasize the degree of symptoms. Perhaps intentionally they will do so at times.

The medical coding professional will then evaluate the chart notes and determine the severity CPT code. They may assign a level 5 urgency for an event that was actually a mere 2 event.

When the proprietary adjudication system (software that processes ER claims based on a variety of codes and the CPT code) runs a thousand claims through its decision making algorithms, it will not always make the best of decisions.

It may take that 99285 code with more valence than the note within the charts that state the patient was in no acute distress, laughing and enjoying themselves in the ER.

This is where the Prudent Layperson profession comes into play: it would eliminate a good deal of claims that are up-coded unnecessarily and that pay out far more money on a hospital visit than they should.


You may be interested in the following references:

Feature Image Attribution: Mendolus Shank (CC)

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What is the Prudent Man Rule?

This legal definition is for disambiguation purposes only, and is not related to the Prudent Layperson Standard in health care. However, as a courtesy, we provide this term here as it contains a common search phrase that people seek:

“Prudent Man Rule is an investment standard. It directs trustees “to observe how men of prudence, discretion and intelligence manage their own affairs, not in regard to speculation, but in regard to the permanent disposition of their funds, considering the probable income, as well as the probable safety of the capital to be invested”. [Harvard College v. Armory 9 Pick (26 Mass) 446, 461 (1830).]

In some states, the law requires that a fiduciary, such as a trustee, may invest the fund’s money only in a list of securities designated by the state,the legal list. In other states, the trustee may invest in a security if it is one that would be bought by a prudent person of discretion and intelligence, who is seeking a reasonable income and preservation of capital.”

SOURCE: Legal Definitions of Prudent Man, Prudent Man Rule