How Crafty Insurers Deny Care

Criticism of Britain's government-run health system, known for its rationing, became red hot last month when patients and doctors got wind of government plans to say no to several new lifesaving drugs because of cost. In an op-ed in the Daily Mail,one of Britain's leading oncologists, Jonathan Waxman of Imperial College London, reflected public sentiment as he decried a "misguided and barbaric decision to ban four kidney cancer drugs" that double life expectancy--adding years of life for many patients. You may think this is just happening in Britain. Not so. Only here in the United States, it's the apparatchiks in private insurance companies, managing half of America's medical expenditures for the non-Medicare population in ways often hidden and arbitrary, who hold the broad authority to deny coverage--and therefore, care.

The public is generally unaware of the denials unless the human drama triggers media interest. There's the 17-year-old girl who died before her liver transplant was approved. Or the people in California whose insurers canceled their policies retroactively after they got sick. But these cases are the tip of an opaque iceberg. An estimated 10 to 15 percent of claims are denied for various reasons. Some of them are technical, such as not meeting filing deadlines or failing to get pretreatment authorizations. Denials that produce the most disputes are those where insurers judge the care to be unnecessary or unproven, pitting a proverbial sick David against a multibillion-dollar Goliath. What few Davids know is that insurance contracts grant companies the legal right to manage a patient's care, sight unseen, overruling physician decisions.Iffy and arbitrary. Some denials are reasonable, but many are iffy and seem downright arbitrary, with one insurer saying no to care that others with similar policies reimburse. An FDA-approved drug might be denied because it's used "off-label," even if it's recognized therapy in peer-reviewed medical reports. In cancer care, intravenous chemotherapy drugs given in a doctor's office may be covered, while equivalent, if not better, medicines taken orally are not. When insurance authorization is required for each scan or hospital stay for the same major illness, who's best to say what's medically necessary? Doctors and their staff will spend hours trying to get approvals, but patients should be warned that if the company denies the claim, payment is the patients' responsibility--with bill collectors ready at their door.

The problem is bound to grow as electronic medical records meet sophisticated data tools dubbed "denial engines," touted to reduce reimbursements by 3 to 10 percent. Bearing names like Ingenix Detection Software and Bloodhound Technologies' ClaimsGuard, they search patient records for signs that claims have strayed in any way outside company parameters. Weeding out fraud is one thing; serving up excuses to deny legitimate coverage is another.

More than ever, people must study the details of their health plans. Aetna, for example, offers on its website a list of all services it won't cover--and why. That's good for patients and doctors. Patients should also know that companies must have an internal appeals process. The appeal, however, is laborious and legalistic and lacks transparency. Insurers can drag it out; they can be vague about their decisions. Try asking just what data they used, and also about their decision makers. Who are they? What's their experience? Are they moonlighters, by chance, denying care from New Delhi? (A new trend is to outsource claims adjudication to India.)

But patients with the stamina to endure sometimes win. And even if they lose, completing the internal appeal makes them eligible for an independent external review, which is available in most states. Such review overturns about half of insurers' denial decisions and is final. Nancy Nielsen, president of the America Medical Association and a former chief medical officer of a nonprofit insurance plan, says, "If health insurers are making coverage decisions that are fair and compassionate, very few will be overturned by the state's external appeal process." The numbers speak for themselves--and should be considered by every insurance purchaser.Lack of transparency in the face of such mighty discretionary authority is drawing the attention of state attorneys general. New York's Andrew Cuomo has launched a nationwide investigation into schemes that low-ball reimbursement and stick patients with bills insurance companies should have paid. "All too often," Cuomo says, "insurers play a game of deny, delay, and deceive." His pursuit is in full throttle. And, with his bully pulpit and his power of subpoena, he will be able to pierce an opaque veil that patients can't.
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