Egregious Insurance Policies (Thanks, Budd!)
A few weeks ago, there was a challenge on the SOAPM list to come up with the Top 10 Most Egregious Insurance Company Behaviors. Dr. Budd Shenkin compiled and edited the list which, in the draft you see below, I find quite impressive.
Of course, I'd love to hear of any additions you might have - no need to limit us to 10. I have a few that I might use as amendments. Enjoy.
Health Insurance Companies vs. Doctors
The Top Ten Outrages
From an idea of Jon Caine, MD
With the aid of unindicted co-conspirators from the SOAPM Listserve
Written by Budd N. Shenkin, MD, MAPA
September, 2010 - draft
The outrages perpetrated by health insurance companies against their policy-holders – people we physicians call, perhaps anachronistically, “patients” – were aired and to some extent repaired in the run-up to and passage of the Affordable Care Act (ACA) this past year. What went largely unremarked and unaddressed, however, are the outrages perpetrated by health insurance companies vis-à-vis the physicians they contract with to serve these selfsame patients. Here, for your wonder, perhaps your outrage, or if you are a health insurance company executive, your amusement, is a top-ten list of these outrages.
- Unequal anti-trust policy.
The biggest outrage, the ur-outrage from which all other outrages spring, is condoned and supported by the laws and enforcement of the government of the United States and the various states. Health insurance companies operate in largely monopolistic and oligopolistic environments in local areas. Physicians practice in much more atomized small group practices. The playing field is severely tilted – insurance companies can do without an individual physician practice, yet the physicians cannot do without the insurance companies. Governments have allowed anti-trust laws to accommodate insurance company consolidation, but have enforced the law on physicians, and will not allow them to negotiate as groups, even when members of IPA’s and other groups. The predictable result is that insurance companies continue to lower payment rates to physicians to the point of near extinction, and to commit outrages to decency such as those listed below. In reaction, physicians are now themselves conglomerating into corporate entities, not because this is a better way for them to serve their patients, but simply to protect themselves from the oligopolistic insurance industry. Coming soon to your community – Large Corporate Physician, your doc in the corporate box. The ACA could have given a anti-trust waiver to allow doctors in organizations such as IPA’s to bargain collectively with oligopolitic insurance companies.
- Payment for vaccines.
Vaccines are the greatest life-saving advances contributing to the health of the public since safe drinking water. Medical practices, amazingly, have overhead – a typical primary care group practice has an overhead rate of 65-70%. But many of our friendly health insurance companies have declared it their policy that “physicians should not make a profit on vaccines.” Therefore, when a physician administers a vaccine, a company with this policy will pay the physician only a few percentage points above the acquisition cost of the vaccine. How long would Macy’s survive if it sold a shirt for 5% above purchase price? The ACA could have required insurance companies to pay for vaccine cost plus overhead plus margin.
- Adherence to the Payment Code policy. There is a codebook called the CPT
codebook. Whenever a physician does something, there is an official code on how to describe the service, with a Relative Value assigned to this code. Physicians are required to adhere to this codebook; no deviations are allowed. Insurance companies, however, often deviate. There are codes, for instance, for administering a vision test, a hearing test, a urinalysis, etc., to a child. These are separate services recognized by the code book. But many companies “bundle” these separate services and simply declare that “these services are included in the payment for the visit.” Which they clearly aren’t, which is why they are listed separately and have their own codes. The ACA could have said, “Insurance companies need to recognize all CPT codes and pay according to their relative value.”
- Up To Date Codes.
In a related vein, when new services such as new vaccines appear and are approved, health insurance companies lag for months in inputting the codes “into the system.” This leaves the physician in the lurch, wanting to give the service to the patient, but not being able to get paid for it by the health insurance company. Amazingly enough, when time comes that they decide to delete a code, the health insurance companies can accomplish this immediately. The ACA could have fixed this by requiring the code addition to be timely.
- Double dealing in eligibility.
When a patient comes to the office, physicians need to know if the patient’s insurance is in force. The insurance companies, keepers of the data, have websites that the physicians can check. But this information is sometimes out of date. If a website says a patient has insurance in force and the physician accordingly serves the patient and sends the bill to the insurance company, but the information turns out to have been false, the health insurance company commonly reneges on its responsibility, and doesn’t pay the physician. The ACA could have compelled the heatlh insurance companies to honor their own information, and to pay the physician for service rendered in good faith.
- Payment for services on capricious criteria.
A prime principle of prevention is early detection of illness. An important way to do this is to screen all patients. For instance, pediatricians use scientifically-validated screening procedures to detect developmental delay, autism, hearing loss, or high cholesterol. But some health insurance companies pay for these screens only if the patient actually has the disorder in question! Talk about unclear on the concept. The ACA could have compelled the health insurance companies to pay for the screens when applied at the officially indicated age intervals.
Because thehealth insurance companies are constantly sending doctors payments, if they want to they can simply debit a current payment for a past problem they detect, with no form of mutual adjudication. From a fellow physician: “Last week I had a takeback from BCBS for a patient visit one year ago. The problem was not that the patient was no longer eligible, but they had never responded to the BCBS inquiry about other insurance coverage.“ That’s right, the insurance company sent an inquiry to the patient asking if they had additional health insurance coverage, the patient didn’t respond, so the insurance company retroactively voided their payment to the physician. The ACA could have mandated no takebacks without mutual adjudication.
- The Lapsed Coverage Waltz.
A colleague reports: “Patient's coverage lapses in error. They call the plan to get reinstated. The plan reinstates the patient from the date they called, not back to the erroneous termination date. Doctor still does not get paid.” The ACA
could have fixed this, too.
- The Myth of Timely Payments.
From another colleague: “State law mandates payment of "clean claims" within, say, 30 days. On day 28 they send an inquiry to the patient (with a copy to the doctor), requesting ‘information on any other health care coverage’ and the claim is pended until that information is received. Since it takes the patient some finite time to respond, if they bother to at all, the doctor is left waiting for payment.” Surely the ACA could have obviated this tactic as well.
- Show Us Your Documentation.
One of the most wasteful practices of the health insurance companies is excessive documentation demanded from the physician. Before paying for a service, the health insurance company can require the physician to send copies of the patient record. The number of such requests can amount to harassment. Some health insurance companies will require documentation for every single instance of a service, such as a screening for autism. In our own practice, with some companies and some codes we have now resorted to the extra work and expense of submitting such records expectantly. What a waste of effort. The ACA could have regulated the number of such requests.
- Rudeness and Mendacity.
As a bonus, for #11, let us mention my own personal favorite. Industries tend to attract certain personality types, and to take more malleable personalities and mold them to a common image. The capacity of health insurance company executives to misstate facts and demean inquisitors is legendary. Virtually all my colleagues who manage practices have been told that they are the only one in the state, region, or country to protest or be dissatisfied. I myself have been told that the American Academy of Pediatrics supports the position of the health insurance company on an issue, when I myself have been part of the committee that sets the policy. Whoever invented the word “chutzpah” couldn’t have had a strong enough imagination to envision its embodiment by the health insurance industry.
Colleagues have requested that our list go on, but in deference to David Letterman, we will stop at ten plus the bonus. We all know that the American health insurance system even after ACA, needs revision. In the grand scheme of things, this list of grievances might seem small potatoes, but to those of us in the system day after day, it is major. Since the Federal Government has shot its bolt with the ACA, which failed to address these issues, we most likely cannot expect any relief from this or any prospective Congress or Administration. Our best hope, then, would be the states. As practitioners, we can fight the good fight on our own, but realistically, only government has the capacity to curb such bad behavior.