By Lauren Weber FEBRUARY 7,
2020
The
more than $34,000 in medical bills that contributed to Darla and Andy Markley’s
bankruptcy and loss of their home in Beloit, Wisconsin, grew out of what felt
like a broken promise.
Darla
Markley, 53, said her insurer had sent her a letter preapproving her to have a
battery of tests at the Mayo Clinic in neighboring Minnesota after she came
down with transverse myelitis, a rare, paralyzing illness that had kept her
hospitalized for over a month. But after the tests found she also had beriberi,
a vitamin deficiency, Anthem Blue Cross and Blue Shield judged that the tests
weren’t needed after all and refused to pay — although Markley said she and
Mayo had gotten approval.
While
Darla learned to walk again, the Markleys tried to pay off the bills. Even
after Mayo wrote off some of what they owed, her disability and Social Security
checks barely covered her insurance premiums. By 2014, five years after her
initial hospitalization, they had no choice but to declare bankruptcy.
Anthem
Blue Cross and Blue Shield spokesperson Leslie Porras said company “records do
not indicate that Ms. Markley had tests authorized that were later denied.”
Markley
said she never would have had the tests done if she had known insurance was not
going to pay for them. “I feel for anyone that finds themselves in that
predicament,” said Markley, a nurse who was pursuing her Ph.D. in education.
“You can go from an upstanding middle-class American citizen to completely
under the eight ball.”
The
billing quagmire into which the Markleys fell is often called “retrospective denial”
and is generating attention and anger from patients and providers, as insurers
require preapproval — sometimes called “prior authorization” — for a widening
array of procedures, drugs and tests. While prior authorization was
traditionally required only for expensive, elective or new procedures, such as
a hip replacement or bypass surgery, some insurers now require it for even the
renewal of some prescription drugs. Those preapprovals are frequently
time-limited.
While
doctors and hospitals chafe at the administrative burden, insurers contend the
review is necessary to ferret out waste in a system whose costs are exploding
and to ensure physicians are prescribing useful treatments.
But
patients face an even bigger problem: When insurers revoke their decision to
pay after the service is completed, patients are legally on the hook for the
bill.
Prior
authorizations may now include a line or two saying something like: “This is
not a guarantee of payment.” This loophole allows insurers to change their
minds after the fact — citing treatments as medically unnecessary upon further
review, blaming how billing departments charged for the work or claiming the
procedure was performed too long after approval was granted.
In other
cases, a patient will be told that no prior authorization is needed for a
certain intervention, only to hear afterward that the insurer wanted one in
this particular case. It then refuses to pay. Oftentimes, approval
conversations happen primarily between the insurer and the provider — leaving
the patient further in the dark when the bill appears.
The American
Medical Association drafted model legislation to
combat the problem for lawmakers to introduce, but the measure has not been
widely picked up.
Martha Gaines, director of the Center for
Patient Partnerships at the University of Wisconsin Law School, co-authored an article in the Journal of
the American Medical Association on the issue and sees firsthand the time and
money patients lose fighting such retrospective denials — for coverage they
thought they had.
“How broken
can you get?” she asked. “How much more laid bare can it be that our health
care insurance system is not about health, nor caring, but just for profit?”
The
Push-And-Pull Of Prior Authorizations
Many
physicians and health care providers consider the extra paperwork needed for
prior authorizations a growing scourge that requires them to expand their staff
to handle the back-and-forth with insurers. According to an American Medical Association survey
released in 2019, 88% of providers reported that the burden of prior
authorization has increased over the past five years, forcing them or their
staff to spend an average of two business days a week completing them.
The
process of prior authorization aims to establish medical necessity to prevent
“unnecessary, costly, or inappropriate medical treatments that can harm
patients,” according to Cathryn Donaldson, a spokesperson for the America’s
Health Insurance Plans industry group.
It’s
unknown how many patients get stuck with bills for prior approvals gone wrong.
But retrospective denials have become only more common as prior authorizations
have increased, said Dr. Debra Patt, an oncologist and chair of the
Texas Medical Association’s legislative council.
Her
practice has tripled the number of staff who deal with prior authorizations,
and she said she is currently trying to get the Texas Medical Association to
survey its members on the revocation topic after seeing its impact on her
patients, one of whom she said recently had chemotherapy payments denied.
Donaldson
said her insurance trade group realizes the process for prior authorizations
could be improved and is working with tech companies to help streamline it for
all involved. But she added that denials may be simple requests for more
information.
“A
denial usually occurs because the clinician may not have provided the
documentation needed to show that the treatment is necessary,” Donaldson said.
“Once that documentation is received, claims may then be approved.”
I wish people would
understand that they are one illness away from totally losing everything they
worked for. I lost it all in a day. DARLA
MARKLEY
As
insurers and providers argue over money, patients are often stuck in the
middle.
After
Rebecca Freeman’s insurer, Moda Health Plan, approved a genetic test for the
Portland, Oregon, woman’s now 5-year-old daughter in 2018 to rule out a serious
condition that could cause blindness, the insurer declined to pay after the
test was performed.
Moda
argued that the dates and billing codes didn’t match up with what was
authorized. It told Freeman’s lab company, PreventionGenetics, it wasn’t going
to pay, and, eventually, PreventionGenetics billed Freeman.
“Everyone
is pushing the blame on everyone else, and I’m left holding the bag — there’s
no recourse for the patient,” Freeman said. “Worst case for them is they pay
what they were supposed to. You don’t get anything for all your stress and
time.”
When
Kaiser Health News first asked about the case, Moda spokesperson Jonathan
Nicholas said it was still an active claim. “As soon as the lab provides us
with correct information, we anticipate prompt payment,” he said.
But
Freeman said Moda had denied five claims and appeals on the nearly $2,000 bill for
more than a year.
Within
days of KHN’s questions, Moda paid the bill.
The
Problem With Legalese
Pharmacist
Melita Pasagic of Fenton, Missouri, was told by her provider — who had called
UnitedHealthcare, her insurer — that her and her husband’s genetic tests needed
no prior authorization.
After
the tests were performed, though, UnitedHealthcare told Pasagic it had deemed
the tests medically unnecessary and would not pay for them. Later when she
called, she said, the insurer cited a coding discrepancy. Although Pasagic
spent hours on the phone appealing the decision, the insurer didn’t budge. The
genetic testing company sent the $5,000 bill to collections.
“How
can you deny anything post-service for medical necessity?” she said. “If it
didn’t require a pre-review, why does it have a post-review?”
Pasagic
said she plans to take UnitedHealthcare to court over it. The insurance company
said the testing was never covered in the first place.
“While
certain procedures, tests and drugs may not require prior authorization,
individuals should still confirm that the services are covered under their
benefit plans,” UnitedHealthcare spokesperson Maria Gordon Shydlo said.
Typically,
there’s no penalty for insurance companies that play games with prior
authorizations, Gaines said, calling denials and delays integral to their
business model.
The
National Association of Insurance Commissioners has formed a working group to
investigate the revocations following a presentation in December by Patt, of
the Texas Medical Association. The Minnesota and Pennsylvania departments of
insurance both said they had seen complaints regarding retrospective denials of
prior authorizations. But quick fixes are unlikely.
“There’s
no silver bullet for this issue, so we encourage consumers to remain vigilant,”
said Katie Dzurec, acting director for the Health Market Conduct Bureau in
Pennsylvania. “Ask questions, review documents and contact the insurance
department.”
Markley
hopes this doesn’t happen to more people.
“I wish
people would understand that they are one illness away from totally losing
everything they worked for,” Markley said. “I lost it all in a day.”
Lauren
Weber: LaurenW@kff.org, @LaurenWeberHP
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